Have you ever been about to sign a contract and stopped short when you noticed a particularly nasty term in the fine print? If you brought it up with the other party — an insurance company, a bank, a landlord — they probably did some hand-waving and told you not to worry about it.

“We never actually enforce that provision.”

“It’s just boilerplate.”

“That’s not our policy.”

Right?

Well, beware. According to Texas case law, you can’t rely on oral statements when you have a written contract that addresses the same point.

Take this case: 

Party A agreed to install an oil drill in exchange for some mineral rights from the owner, Party B. The parties heavily negotiated the contract, and one term involved whether or not the drill installer would have the right to resell the mineral rights he received. Initially, the contract said something like, Party A may not assign the mineral rights without the consent of Party B, which shall not be unreasonably withheld.” 

But then, Party B’s lawyers removed that last clause from the sentence, which turned into:

Party A may not assign the mineral rights without Party B’s consent, which shall not be unreasonably withheld.

Party A objected: How can you take that out? Doesn’t that mean you could just keep me from giving away those rights without any good reason? And isn’t that just as bad as saying I can’t assign at all? He wanted the contract changed back.

Party B was quick to reassure. No, no, no don’t worry! If you want to give away your rights, we won’t actually prevent you. We’ll give our consent. So party A signed the new draft.

Baaaaad decision. 

Later the owner prevented the drill installer from selling his mineral rights, the drill installer sued, and the court took the owner’s side. The way the court saw it, the terms of the deal were right there in black and white: you can’t assign without Party B’s consent. That’s what you agreed to. 

The moral of the story? Read your contracts.

Make sure all the terms of the agreement are in there. Push back until the draft says what you want it to say. Don’t take your business partner / vendor / service provider at their word. You just might come to regret it.

A buy-sell agreement is a way to plan for the transfer of shares or membership interests when an owner dies or leaves your company. 

It may seem odd to think about that kind of thing up front, when you and your co-founders are still laser-focused on your new business. But the reality is that at some point, a founder will likely decide to leave, and working out the terms of that departure early on is your best bet for a smooth transition.

When you hire a new employee, you’re required to enter their name and social security on a form W-2. But what if your new employee is from outside the United States and is still waiting on their social security number?

So You’ve Incorporated…
Now What?

Congratulations! You’ve recently filed your articles of incorporation and your attorney has told you that, yup, you now officially have a corporation. Great, you think. Now what?

First, Some Terminology

Founders. The people who started the company. This is not really a legal term, so it doesn’t tell you much about their current rights in the company – just that they got the ball rolling. Usually in the early phases of a startup, a founder will be an officer, such as the CEO, and be a member of the board of directors.

What laws does a business owner have to follow?

If you’re a business owner in Austin, Texas, you’ve got other things on your mind than the red tape in the way of your success. Where would you even begin?

Here’s a summary of some laws that might apply to you if you own a business. We’ve included some links (just click the text!) to help you reduce the time you spend researching. If you don’t want to take the time to sort through all of these laws to figure out what applies to you, then give our free tool a try.

Guest Post by: Alyssa Kutach, MSHRM, SHRM-CP

Have you ever been sitting at your desk at work, just stewing with anger because you and your co-worker got in a tiff over a work assignment? Workplace conflict is all too common in the workforce these days, but is seemingly passed over or swept under the rug as if the problems were not left there to fester. 

Workplace conflict is a “dispute” between two or more employees, co-workers or employers. Really anyone involved in a business setting that has a conflict. Conflict in the workplace often fosters insight and growth, yet is frequently perceived as a problem. Basically, workplace conflict can manifest in any situation in which an employee’s concerns or desires differ from those of another person in the same business setting. Unfortunately, most employers do not train their employees how to handle internal conflict, (i.e. why we have Employee Relations in HR, EEOC for Equal Employment and a Grievance process for those who have let it go too far), giving way for emotions such as anger. Anger causes conflicts to escalate and explode, which is why we usually associate conflict with anger. However, conflict is a natural fact of life, and whether you actively avoid, collaborate, compete, compromise or accommodate (conflict resolution styles) it or not, everyone will experience workplace conflict at some point in their life.

When you set out to hire someone, it makes sense that you gather as much information about them as possible. Not just professional qualifications, but personal information like their interests and passions, may influence your subjective decision about whether they’ll be a good fit for your company. After all, hiring and training require a lot of your company’s resources, so you have every right to do your due diligence and increase the odds that you new hire will (1) be able to do the job, and (2) stick around for long enough to make the onboarding costs worthwhile.

However, you can get into some sticky situations when you start perusing a potential hire’s social media accounts. Scrolling through someone’s Facebook or YouTube channel may give you more insight into their personality, but it could also give you some information you’re better off not having. 

After college and before law school, my first job was as a mid-level manager at a company with a crazy high rate of turnover. It was the organizational culture, there; employees were in and out the door constantly because of high performance expectations. This meant that as a brand new, 22-year-old manager I was involved in firing people within six months of my tenure at the company.

As you can imagine, it was not a fun job. As you can also imagine, it taught me a couple things about the number-one worst aspect of being an employer: letting people go. First, there’s no great way to do it. There’s just no way to come out of it best friends and with everything water under the bridge — at least not right away. Second, on the other hand, most people do understand that you’re just doing your job.

If you’re an owner or nonprofit director right now, and you’re thinking about laying people off, you’re not alone. Maybe it’s your first time going through it, or maybe you just haven’t done it in a while. Here are some general guidelines — legal and practical — to help you navigate this downer of a situation.

Yes, Employees Do Have (Some) Privacy Rights

When it comes to privacy at work, employees really don’t have much. The protections available under federal and state law generally don’t apply in the private workplace. That’s in part because there are good reasons for companies to monitor work-related communications. For instance, customer service: you may want to make sure that customers are having quality phone experiences with your sales representatives. Or liability: reviewing employee emails may help you spot and address criminal activity or workplace bullying sooner rather than later.

Still, employers don’t have a free pass to listen in on any and every conversation at work. Here are some high-level guidelines for what is and isn’t allowed in Texas.

Invasion of Privacy Claims

When you listen in on employee phone calls, monitor their email, or search their workspace, you risk what’s called an “intrusion on seclusion” lawsuit. Basically, the employee could sue you for intruding on their private affairs if (1) you as the employer purposefully intruded, and (2) the intrusion would be ”highly offensive” to a reasonable person.

Obviously this isn’t the clearest guidance in the world. Whether or not the intrusion is offensive depends a lot on the context.

For a good business reason, you can probably:

• monitor work email on a work computer
• monitor work phone calls on a company phone

It’s less clear whether you can:

• monitor personal email on a work computer
• monitor work calls on a personal phone
• look at your employees’ social media accounts (from a liability standpoint, it’s much safer not to)

You definitely can’t:

• listen to personal calls on a work or personal phone (note: If you’re monitoring a company phone line to prevent personal calls at work, you need to stop listening right away once you know the call is personal.)
• monitor personal email on a personal computer

If you’re looking to do something in that middle, gray area, you should consult an attorney. And no matter what you’re looking to do, clearly communicate to your employees where they do and do not have an expectation of privacy — and then stick to that promise.

The Bottom Line

If the situation or conversation is clearly personal, and there’s no good business reason for you as the employer to know about it, give your team their privacy. 

On the other hand, if you have a good business reason for monitoring certain communications, and the average person would sort of expect the company to keep an eye on those communications, you’re probably good to listen in. 

No matter what, just make sure you let employees know up front that those communications may be monitored, preferably in a policy that is distributed and signed by everyone on your team. That — and limiting any monitoring activities to the bare minimum required to achieve your purpose — is your best defense against invasion of privacy law suits. Not to mention your better bet for a happy, healthy workplace. 

Stay tuned for another post on a tricky privacy issue: social media and hiring practices.