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Daytona Beach, Florida

The Daytona Law Blog

Tips on creating a business partnership

Many people in Florida have dreams of owning their own businesses. In some cases, this may be achieved by working with another person and establishing a partnership. However, it is important that entrepreneurs proceed with caution before signing up to partner with another person as there may be serious legal and financial ramifications if a partnership does not work out as intended or hoped. 

According to Inc. magazine, there are some things that partners should have in common and some things they should not. Values, a work ethic and expectations for the business and each other should be shared for maximum synergy between partners. Skills, knowledge and even industry contacts may be best if not shared so that each person can bring something unique to the business and provide strength in different areas.

Detailing the Deceptive and Unfair Trade Practices Act

Most in Daytona Beach may anticipate that the business world will be cutthroat and competitive. Yet simply because you and your company are in a state of constant competition with your competitors does not mean that you (and them) are not required to follow ethical practice guidelines. Some might hear the term "unfair competition" and roll their eyes, believing it to only be an accusation made by companies that are falling behind in their markets. Yet several business representatives often come to us here at Smith Bigman Brock asking for specific examples of unfair competitive practices. 

Finding an answer to such a question requires a knowledge of Florida's Deceptive and Unfair Trade Practices Act. Here, it adopts the same standards set forth by the Federal Trade Commission Act. This legislation defines unfair trade practices to be: 

  • Any that harm (or are likely to harm) consumers
  • Any that cannot be reasonably avoided by consumers
  • Any whose benefits are not outweighed by the countervailing benefits to both consumers and competitors

Company alleges client lured away its co-founder

A company's most valuable asset is its workforce. Its employees may be the reason behind its reputation and brand loyalty, which ultimately allows it to compete in its market. For this reason, it may not be surprising to hear that a local business in Daytona Beach is willing to go so far as to litigate in order to ensure that its employees are not poached away by competitors (or in answer to unfair and/or unethical recruiting practices). 

An application development firm recently filed a lawsuit in North Carolina over this very issue. It was approached last year by another company looking for assistance in developing an app as well as creating a website. A stipulation was added to the contract the two companies entered into that the client company would not attempt to hire away any of the firm's employees for at least two years. One of the firm's co-founders was deeply involved in the project, eventually going so far as to leave the firm for a new position with the client company. The firm's lawsuit states that the client company's solicitation of its co-founder was in violation of that agreement. It also alleges that the co-founder and the client company colluded in deceiving the firm that payment for its services would be forthcoming, when in reality the client's aim was to recruit the co-founder to its side in order to finish the project in-house. 

Evaluating whether non-compete agreements are enforceable

Of all of the assets that businesses in Daytona Beach value, chief among them has to be their employees. This is why if you do happen to lose an employee, your greatest fear may be that they will either immediately go to a competitor and share some of your valuable trade secrets, or try and poach some of your other employees. Many clients come to our team here at Smith Bigman Brock convinced that a non-compete agreement will prevent this, yet that depends on the nature of the agreement. If its deemed to be too restrictive, the court may actually rule that it is non-enforceable. 

That actually represents a step up in the legal treatment that such agreements have received historically in Florida. Per the Florida Bar Journal, non-compete agreements were often ruled void for decades due to them being perceived to be restraints on trade under common law. In 1996, however, the state enacted legislation meant to specifically address non-compete agreements. This new standard (found in Section 542.335 of Florida's state statutes) says that non-compete agreements can be enforced provided that their terms are proven to be reasonable relative to time, area and line of business. What this means is that as long as your non-compete agreement is not so restrictive that a departing employee will not reasonably be able to immediately find work, the court may very well validate it. 

Can a client terminate a contract "for convenience?"

Much of the stability of your business in Daytona Beach comes from the confidence in knowing that your clients cannot simply walk away from your contractual agreements. If they do want to cancel a contract, they typically need to have cause to do so. Yet are there exceptions to this rule? 

There may be times when a contracted partner is allowed to terminate an agreement for convenience. Basically, the concept of "termination of convenience" allows a contracted entity to end is contract if it believes it to be in its best interest. Per the Congressional Research Service, government entities are automatically granted this privilege. Some of the reasons that a government agency may cite when terminating an agreement with you for its convenience may include: 

  • It now being able to provide the goods and services needed in-house
  • A breakdown or deterioration in your business relationship
  • If questions of propriety surrounding your being awarded the contract arise
  • When you refuse to renegotiate the terms of your agreement

What are the most common lawsuits against businesses?

In our litigious society, every business must remain wary of lawsuits. No company wants to face a time-consuming, expensive, image-damaging lawsuit. While every business’s level of risk varies, litigation remains a constant threat for most companies.

It is wise for business owners and their attorneys to be aware of some of the most common types of lawsuits against businesses. This way, they can take proper precautions to reduce their risk of litigation.

Handling lawsuits involving staff members

As a business owner, you may have to head to court over any number of issues. From trade secret theft to other matters which may involve competitors, business partners or customers, business litigation has many causes. However, some lawsuits are the result of an issue involving a staff member or a group of employees. It is extremely important for businesses to handle these cases with special care since the outcome of the suit could have a ripple effect felt throughout the company. In Daytona Beach and across Florida, the way in which a business owner handles a lawsuit involving staff members could even affect the future of the company.

Employee lawsuits may be centered around sexual harassment allegations or they may involve discrimination over religious beliefs, gender or a disability. Some workers may claim that they were subjected to wage violations, such as denied overtime, and there are all sorts of other reasons why workers may decide to take the company they work for (or their former employer) to court. The outcome of a lawsuit involving staff members can not only bring financial consequences for a company, but they can also affect the behavior of other employees and a business' reputation.

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