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You've been working at ABC Co. for some time now. You have gained experience and knowledge during your employment, but you've caught the entrepreneurial bug. You want to start your own business. During your employment you have developed solid relationships with ABC Co. clients. You're positive these clients would follow you if you left ABC Co.  Before you do anything ask yourself the following questions:

1.      Did you sign a non-compete with ABC Co.? Reasonable non-compete agreements are enforceable in Iowa. If you signed a non-compete agreement before or during your employment with ABC Co., it may be enforceable and you will want to abide by the terms of the agreement. If you have questions about the agreement, contact your attorney.

2.      Do you still work for ABC Co.? If you are currently employed with ABC Co. fight the urge to solicit ABC Co. clients and/or employees. According to Iowa law employees have a duty of loyalty to their employers. Soliciting clients and/or other employees while employed violates that duty. Even an innocent conversation with a client: "Hey, I'm thinking about starting my own business, what do you think?" may be considered solicitation. It may be difficult to not ask because clients are important to the success of your new venture. But don't do it.

3.      Are you cleaning out your old office/workspace? If you have terminated  your employment (or are just about to) and are in the process of cleaning out your workspace, including your computer refrain from taking with you ABC Co. information or materials that may be unique to ABC Co.. This information or material might be considered confidential or a trade secret. Leave it there.

4.      Have you terminated your employment with ABC Co.? Once your employment relationship with ABC Co. has been terminated you are free to compete  with ABC Co.(as long as there is no agreement otherwise). You are entitled to use general information concerning the business, including the names of clients retained in your memory. Good luck.

photo on flickr by bludgeone86

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The best time to make decisions regarding how to exit a business venture is at the beginning, especially if the business is to have more than one owner.  Why?  Because, although this my seem a little cynical, it is in all likelihood precisely the time when the soon-to-be business partners will be most closely aligned and focused on a common goal.  It is at this time, when leaving the business is the furthest thing from the partners minds, that objectivity can be achieved and a fair buy-sell agreement can be created that allows a partner out, without placing an undue burden on the remaining partner(s) and business.  At a bare minimum a carefully crafted buy-sell agreement will cover, (1) How the value of an owners interest in a business will be determined; (2) What, if any, internal or external events will trigger a buy-out; and (3) Is the sale of a departing owners interest restricted in anyway.

For information on different types of buy-sell agreements and their tax implications see Structuring Corporate Buy-Sell Agreements by David Joy, Jo Koehn  

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My husband and I are in the early process of purchasing a business. After some searching, a couple hints from a friend and a newspaper article in the Des Moines Register we stumbled on the Targeted Small Business program offered through the Iowa Department of Inspection and Appeals and the Iowa Department of Economic Development. The TSB program is for Iowa businesses that are at least 51% owned and managed by minorities and/or women or persons with disabilities. One purpose of the program is to provide financial assistance in the form of low interest loans and/or grants to new or existing businesses.

The process (as I am currently discovering) does take a little work. First, you must become a certified TSB through the Iowa Department of Inspection and Appeals. The application requires information concerning you and the current and/or future business. Because our business is not yet established my husband and I will apply to be conditionally certified. Once we are up and running we can become fully certified.

Once certified (conditionally or fully), you are eligible to apply for the TSB Financial Assistance Program. The financial assistance application is a bit more involved than the certification application. A complete business plan, including projected financials is required. Those who have little or no experience in developing a business plan or projecting profits and losses can contact the Department of Economic Development and be assigned an assistant who will guide you through the process.

If you are a minority, woman or person with disability thinking about starting your own business or expanding a current business, you should consider the Targeted Small Business Program.

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The Federal Family Support Act of 1988 requires each state to maintain uniform child support guidelines and criteria, and review the guidelines and criteria at least once every four years.  In Iowa, the Iowa Supreme Court holds this responsibility.  To facilitate this year's scheduled review, the Iowa Supreme Court established a committee to (1) analyze information about the number of deviations from the Iowa Guidelines, (2) study current data concerning child-raising costs and other economic measures, and compare Iowa's guidelines with child-rearing measures and the guidelines of other states, (3) review and consider the findings and recommendations of the Iowa Child Support Advisory Committee, and (4) consider other information deemed necessary or useful for a thorough review of the current Iowa guidelines.  Upon completion of its investigation the committee recommended the adoption of new child support guidelines.  The proposed guidelines place a greater emphasis on apportioning the cost of child rearing between both parents according to their respective incomes.  The proposed guidelines also provide for lower support orders for low-income, non-custodial parents, are more closely aligned with current economic data on child-rearing costs, and provide a better way for parents to share the cost of health insurance. 

For more information regarding the current child support guidelines see Iowa Code Sections 598.1(9) and 598.21B (www.legis.state.ia.us/Code.html) or contact the Child Support Specialized Customer Service Unit at: 1-888-229-9223 (toll free) or 1-515-242-5530.

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In 2007, a group of Iowa attorneys, professors and students founded the Innocence Project of Iowa. The Project is designed to prevent and remedy wrongful convictions in the state through education, advocacy and litigation. With the creation of the Project, Iowa joins many other state and regional innocence projects that make up the national Innocence Network. There are currently at least 38 university based innocence projects in the United States.   The first Innocence Project was founded at the Cardozo School of Law in 1992.  Since that time, more than 200 people have been exonerated in the United States, including 15 individuals on death row. 

The Innocence Project of Iowa has no paid staff and relies completely on volunteers. Case intakes and initial screenings are completed by the paralegal program at Iowa Lakes Community College, and additional support is provided by students at Drake Law School and the University of Iowa College of Law. Utilizing the services of volunteer attorneys, the Project then provides pro bono representation to inmates with viable claims of actual innocence. An emphasis is placed on cases where DNA evidence is available. To date, the Project has identified two cases to pursue. Hopefully, the efforts of the Innocence Project of Iowa will increase the chances that more Iowa inmates will be exonerated for crimes they did not commit.  

 For more information about the Innocence Project of Iowa, go to www.iowainnocence.org

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I was home Tuesday morning waiting for a repairman when I caught the "Today" show on NBC. One of the speakers was a prominent divorce attorney discussing the state of divorce these days, especially given the economy. The other issue was use of electronic evidence during a divorce especially when child custody is an issue.

The conclusion was that the economy has a temporary affect on the divorce rate. Tough economic times tend to make people stick together. Isn't it always easier to support one household on two incomes rather than two households on two incomes? The divorce rate is likely to emerge from stagnation once the market begins doing better.

As for electronic evidence, the program focused on the Christie Brinkley divorce trial. As you may know, Brinkley's attorneys are using her husband's past behavior, which includes visits to pornographic websites, to argue he is an unfit custodian.

While using such evidence is not new, it still often goes unnoticed . . . . or unrecognized by those engaging in such behavior.

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Iowa Department of Health recently clarified the regulations affecting smoking in vehicles.  Under Iowa’s Smoke free Air Act, smoking is allowed in vehicles that are for the sole use of the driver and are not used by more than one person in the course of employment either as a driver or passenger. Last week I asked the Iowa Department of Health three questions regarding the law:    

1.) Can an employer allow nonsmoking employees to be passengers in these vehicles as long as no one is allowed to smoke?

2.) Can an employer allow nonsmoking drivers to drive these vehicles with or without passengers?

3.) Can an employer allow a driver and passengers to smoke in these vehicles as long as all present in the vehicle are smokers?”

The Department answered:

“As you mention in your question, the law stipulates that smoking is not regulated in a vehicle if that vehicle is for "the sole use of the driver" to which it is assigned and is not used by any other "driver or passenger." This means that any work vehicle in which passengers are allowed at any time must be smokefree at all times and must have a "no-smoking" sign posted. If the vehicle is driven at any time by anyone other than the driver to which it is assigned, the vehicle must be smoke free at all times.”

So, under Iowa’s law, a vehicle that is assigned to a driver who smokes must be designated as “No Smoking” for its remaining life as a company vehicle if the driver ever allows a passenger to ride with him/her. If the vehicle is driven by any person other than the designated smoking driver it must be smokefree “at all times”. It’s no wonder that the employers I’ve dealt with have decided to ban smoking in their company-owned vehicles altogether.

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It's been said before: Wage and hour claims are the newest trend in the employment law area. Recently Wal-Mart got hit with a $6.5 million judgment for violating Minnesota wage and hour laws. The judgment could increase to $2 billion depending on the penalties imposed. Apparently Wal-Mart required employees to work off the clock and denied rest and meal breaks to employees. The 151 page opinion can be found here.

What can you do to prevent a wage and hour claim? Start by classifying your employees correctly. Employees are either exempt or non-exempt. The most common types of exempt employees are executive, administrative and professional. Non-exempt employees must be paid overtime.

Keep accurate records of the hours worked by non-exempt employees. Using punch-in and punch-out clocks may be the most accurate, but at the very least have employees write their hours on a time sheet for each pay period. Iowa law requires employers to keep these records for three years.

Make policies clear to employees and managers. If breaks are given to employees, make it clear to employees that they should or must take the breaks. Make sure managers understand this as well. It seems Wal-Mart's policy was to give workers meal and rest breaks, however, managers either directly or indirectly required employees to work during meal and rest breaks with no pay.

For more information on the wage and hour law check out the DOL website

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