Letters of Intent (LOI) are used on a regular basis to spell out basic terms of an agreement prior to actually entering into a full and complete agreement. Most often we see LOIs in relation to commercial lease agreements, commercial sales agreements, and other commercial transactions. LOIs can be binding or non-binding. If they are non-binding, you have no agreement you can enforce. If the LOI is binding, a court may be able to determine and rule that your Agreement to Agree is truly a contract.

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You have built your business through your creative processes, products or systems. In the development of your business, you have hired employees to implement or sell those processes, products or systems. One of the most devastating things to your business may be, not only the departure of one of your key employees, but that the employee takes those processes, products or systems with her when she goes to work for your primary competitor – or starts her own business based upon the foundation you have laid.

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Any amount of time listening to a radio, watching television or searching for business law websites will lead you to an advertisement for Legal Zoom. A cursory review of Legal Zoom’s website may be enough to tell you how it differs from a real lawyer who provides real legal advice. The disclaimer on the bottom of the website states:

Communications between you and LegalZoom are protected by our Privacy Policy but not by the attorney-client privilege or as work product. LegalZoom provides access to independent attorneys and self-help services at your specific direction. We are not a law firm or a substitute for an attorney or law firm. We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies

So the question becomes, when you are looking to start, grow or protect a business, would you utilize the services of a company that essentially disclaims any ability to provide you with legal services?  Further review of the Legal Zoom website will tell you that for $23.99 per month you can have access to a “real” attorney. For that fixed fee, you will get, “… unlimited 30-minute consultations on new business and personal legal matters for one low monthly rate.”  When I first started practicing law, I received the sage advice concerning legal fees, “You get what you pay for.”

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Ask any longtime business owner the secret to success, and he or she probably will tell you it’s dedication.

John Pinnington took that to heart.

He invested all of his money in the business he created in 2010, AA Printing Service. There was nothing left in the budget for his house. The power was shut off. So was the hot water.

That didn’t bother Pinnington.

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New areas of law develop quickly these days, presenting unique legal and business challenges. What are some of the most pressing issues with these novel and constantly evolving facets of the law? In this month’s discussion, we hear from four trailblazers about two distinct and cutting-edge areas: marijuana and drone law.​

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The Question of Non-Disclosure Agreements

If you are contemplating entering into a business relationship with someone, the first agreement you may encounter is a non-disclosure agreement (NDA). NDAs are used, among other times, when starting new businesses; acquiring new technology or other operational needs; and in the discussions to purchase or sell an existing businesses. Often times, one party to such a discussion will suggest that an NDA be executed and present the other party with a form agreement.

The following is a checklist for you to consider when either receiving or creating an NDA:

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When you formed your business, you may have contemplated what type of business entity to choose.  You likely considered sole proprietorship, partnership, corporation or limited liability company (LLC).  Each entity has certain advantages and some disadvantages. Generally, to protect yourself from personal liability, the two best alternatives are either a corporation or a limited liability company. 

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If you have a Nevada Limited Liability Company (“Nevada LLC”) and you have worked with me in the past, you know I believe it is vital for you to have an Operating Agreement. An Operating Agreement, although not legally required for a Nevada LLC, can set forth the rights and responsibilities of the Members of the Nevada LLC.  It can spell out how you add additional Members; how you sell Membership Interests; and in the case of a business divorce, it serves as a prenuptial agreement.

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According to a “Las Vegas Review-Journal” article in January 2016, if job creation stays at its current rate, Nevada’s small businesses should reach peak employment by late 2016. Managers within small businesses are looking to fill their ranks with new employees.

If your business is among those looking to grow, you must make sure that you start the process in a way that will enable you to hire qualified individuals without exposing your business to liability.  Employment litigation is one of the fastest growing areas of litigation that employers face. Employers may face legal exposure, not just from conduct after hiring an employee, but from conduct during the hiring process itself.

Which tools should you keep in your toolbox and how should you use them when you start the hiring process? As with all things business related, Gordon Law recommends you make, maintain and keep documentation associated with your hiring process.  At a minimum, we recommend that you maintain the following:

  1. An accurate job description for the position. You should be certain to include the essential job functions of the position along with identification of expectations and metrics for measurement of performance;
  2. Hiring processes and procedures. You should set forth how you seek prospective employees and what objective factors you are including in your identification of meritorious employees; and
  3. Keep all of the applications and/or resumes you receive.

Beyond your hiring tools, you should be certain that you are not violating any laws or regulations in your hiring and interview process. The best way to do this is to know about protected classifications and avoid discrimination. You should not ask questions, nor base hiring decisions, that relate to the following:

  1. Age
  2. Gender identification
  3. Disability
  4. Ethnic origin
  5. Marital status

You should also be aware of the new trend known as “Ban the Box.” Since 2009, 21 states have adopted a policy requiring the removal of the criminal conviction history question on job applications.  Although there is no such law in Nevada yet, it is anticipated that one will be under consideration in the 2017 Legislative Session.  Furthermore, the U.S. Equal Employment Opportunity Commission (EEOC) and the Obama Administration have proposed policies that direct both public and private employers to refrain from asking about criminal convictions. According to the National Employment Law Project, there are now more than 185 million people in the United States (over half the population) who live in a “ban the box” jurisdiction.

Once you have identified your new employee, make sure that your hiring decision is predicated on a legitimate, non-discriminatory basis. You should document the objective standards that caused you to offer employment to a particular candidate.  Furthermore, if there is more than one qualified candidate for the same position, you should document why you decided on Candidate A instead of Candidate B.

Gordon Law is here to assist you with any human resources questions or other areas of inquiry that affect your business.

In answering the question, let’s start with the definition of a document retention policy. Instead of using unnecessary legal terminology, consider the policy as simply a document management policy. In the course of your business, you will likely have pages and pages of documents either in hard copy or in electronic copy. A good document management policy will provide you with a guideline as to what you must, should or can keep, and give you the liberty to destroy what you do not need.

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