1. If you are furnishing sensitive information to anyone other than a professional who has a duty to keep your information confidential (attorneys, certified public accountants and physicians are the principal examples), you should insist on having at least a simple confidentiality agreement in place. If your industry deals frequently in highly sensitive information, you should have a well-drafted form confidentiality agreement on file.
2. If you receive confidential information, remember that misuse of confidential information can ave very serious legal consequences. Trade secrets are protected by law and can lead to substantial civil damages awards and even criminal liability.
3. Typically, confidentiality agreements relate only to written (including digitally written) disclosures of information. However, occasionally confidentiality agreements are written to cover ‘ verbal” disclosures as well. If you disclose any confidential information verbally, you should follow this up with a letter describing the confidential information that has been provided. Preferably, you should neither provide nor receive confidential information verbally since this creates a ques ·on of proof.
4. Anything that you wish to be maintained as confidential should be marked “Confidential: When providing the confidential information, you should send a cover letter with an itemized list of e materials being provided. Keep a copy of your cover letter and the documents that you provided so that you can prove what information was provided and that it was marked as confidential.
5. Confidential information should be accessible 10 persons in your organization only on a need to know” basis. Make sure that persons receiving the confidential information understand that disclosure is grounds ‘or immediate termination.
6. All confidential information should be kept in a secure, locked location with a limited number of keys provided to only those persons having a need to know.
9. The confidentiality agreement should have provisions addressing information that is in the public domain, information that is already known to you, and information that comes to you from other, nonconfidential sources. If you receive information hat you were already aware of, you should promptly notify the other party that you ave already acquired this information from other sources.
Wal-Mart Stores, Inc. recently announced that it has agreed to pay between $352 million and $640 million to settle 63 wage and hour lawsuits filed against the retailer in 42 different states. The lawsuits accused Wal-Mart of cheating hourly workers by forcing them to work through breaks and not paying them for overtime.
The wage and hour violation settlement may set a new standard for other companies who have been failing to pay employees according to the requirements of federal labor laws.
In recent years, federal court wage and hour class action filings have surpassed employment discrimination class actions, with claims involving issues such as misclassifying employees as salaried or independent contractors. failing to pay for ‘off-the-clock” work or on-duty meal breaks, denied reimbursements and miscalculation of commissions and bonuses.
In times of financial stress, small business owners often feel that it is necessary to put more of their personal resources into their businesses to keep the businesses going. This action is risky business! Small businesses are often S corporations or limited liability companies, and in each case, the business is a separate legal entity from the owner. Small business owners must keep their personal fiances separate from their business finances. If it is in fact – after much deliberation and professional advice – necessary for the owner to infuse personal finances into the business, it is absolutely essential that this be done in the form of a business loan from the owner to the business. The transaction must be fully documented as such.
Make sure that all owner-loans to the business are properly documented as such. This should include bookkeeping entries for the loan and any repayments to the owner. Importantly, the loan should also be documented by a promissory note with a reasonable interest rate and repayment schedule. If possible, the business should give the owner a security interest in business property as collateral for the note.
Avoid blending the owner’s assets with the business assets. Preserve the distinction between the business entity and its owner. Otherwise, a business creditor might be able to “pierce the corporate veil” so as to reach the assets of its owner.
Review all promissory notes made by the business to financial instiu tions and other funding sources. Determine which creditors of the business have security interests in the business property. Determine which business debts have been guaranteed by the owner, and which, if any, have been also guaranteed by the owner’s spouse. If both the owner and spouse have given their personal guarantee, their personal assets, including their home, are at risk if the business can no longer make payments on the business note.
Summary: The owner of a failing business must make prudent decisions regarding the continued viability of the business. These decisions are best made with the advice and counsel of professional advisors.
Samuel H. Johnson is the founder and senior member of our firm. He served in the N.C. House of Representatives from 1965 to 1974. He also served as a UNC Trustee, Chairman of the N.C. Local Government Study Commission, the Advisory Budget Commission of the N.C. House, and as Special Counsel to Speaker of the House of Representatives and Lt. Governor, (1975-77). He was inducted into the N.C. Bar Associations’ General Practice Hall of Fame in 2004.
Jean Winborne Boyles, concentrates her practice in health law, corporate law, bankruptcy and creditors’ rights, commercial leasing, antitrust and state administrative law.