Alpharetta, Johns Creek, and Roswell ranked best places in Georgia for job seekers

The Best Places in Georgia for Job Seekers.

Nerdwallet has just ranked Alpharetta, Johns Creek, and Roswell among the best places in Georgia for job seekers, especially those seeking positions in technology, healthcare, and education.

Alpharetta, known as the Technology City of the South, and home to Comcast, Verizon, Hewlett-Packard, McKesson, Automatic Data Processing, Lexis Nexis, and many similar tech-sector engines for growth, is ideally placed to attract a major share of the 480,690 jobs Georgia is expected to add in the next 10 years.

Of course, this is why Briskin, Cross & Sanford is known as “A Law Firm at the Intersection of Business, Law, and Technology.”

Hat tip to Chamberlink.

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The inevitably unclear application of the inevitable disclosure doctrine

By now, word is out that Georgia non-compete or non-solicitation agreements are easier for employers to enforce as a result of new laws passed by the state legislature that apply to all contracts entered into after May 11, 2011.

On May 6, 2013, however, the Georgia Supreme Court took the opportunity to restrict the enforcement of non-competition agreements that the parties never actually entered.

What?  Run that past me again…

Michael Holton worked as the vice president and chief operating officer of Physician Oncology Services, LP (“Physician Oncology”) from August 2009 through October 2011. In November 2011, Holton accepted employment with a direct competitor of Physician Oncology. Perhaps not surprisingly, a lawsuit ensued, with Physician Oncology seeking to prevent Holton from working for this or any other competitor.

What is surprising, in addition to claims for breach of a non-competition agreement and misappropriation of trade secrets, is a claim made by Physician Oncology on an “inevitable disclosure” theory, claiming that Holton “would inevitably misappropriate, disclose, and misuse” Physician Oncology’s trade secrets and other confidential information.

The inevitable disclosure doctrine allows a plaintiff to prove a claim of trade secret misappropriation by showing that the defendant’s new employment will inevitably lead the defendant to rely on the plaintiff’s trade secrets. The danger of the inevitable disclosure doctrine, of course, is that it imposes a non-competition covenant where one otherwise does not exist. It may also extend the time of a covenant not to compete beyond the time identified by the actual non-competition covenant originally agreed between the parties as trade secrets and certain confidential information may be protected indefinitely whereas restrictive covenants usually have a time limit.

Georgia law unquestionably recognizes claims of both actual and threatened misappropriation of trade secrets, but does it recognize claims for the “inevitable disclosure” of trade secrets? The answer the Georgia Supreme Court provided is… not in all circumstances.

In Michael Holton’s case, the Court clearly established that Georgia does not allow independent claims under the inevitable disclosure doctrine that would allow a Georgia court to prevent an employee from working for another employer or from disclosing a trade secret. What the court did not address is whether the inevitable disclosure doctrine may be applied under Georgia law to support a claim for the threatened misappropriation of trade secrets.

In other words, for those seeking clarity, the good news is that the Georgia Supreme Court restricted the applicability of the inevitable disclosure doctrine in certain circumstances; the bad news is that the Georgia Supreme Court did not clearly state under what circumstances the doctrine does apply under Georgia law.

The inevitable result is that inevitable disclosure doctrine claims will likely continue to arise until the Georgia Supreme Court has the opportunity to revisit the matter and, hopefully, clear up the applicability this cause of action under Georgia law… or at least add a few more puzzle pieces to the overall picture.

Crowdfunding – SEC Proposes Rules on Title III of the Jobs Act

Yesterday, the SEC finally announced proposed rules for Title III of the Jobs Act.

As those of you who follow this blog or crowdfunding news in general know, the Jobs Act was enacted in April of 2012 and was supposed to be implemented by SEC rules within 270 days of the law’s enactment.  The SEC rules are critical to supply the nuts and bolts of how the Act will work in practice, and the SEC rules have the force of law.

For a number of reasons, however, the SEC failed to meet the 270 day deadline, and as 2013 has grown long in the tooth, proponents of crowdfunding have been wondering if it would ever become reality.  Well, now the wait is over…. or, at least, the end of the wait has begun.

On October 23, 2013, the SEC proposed rules for Title III of the Jobs Act – weighing in at a mere 585 pages long.  The public is permitted to comment on the rules for 90 days, and anyone can do so on the SEC’s website.  How long will this take?  Well, in a related matter, the SEC proposed rules this summer relating to Form D, and because the public interest was so great, the SEC has extended the comment period until November 4, 2013.  My guess is that the proposed rules on Title III will garner even more interest, perhaps signaling the likelihood that the comment period will be extended for Title III’s proposed rules as well.

By way of brief refresher, Title III of the Jobs Act permits small enterprises, under rules to be established, to raise capital from non-accredited investors (basically, people with less than $200,000 per year income and less than $1 million in net worth).  This is a significant change in the landscape of equity investment because, traditionally, a start-up enterprise selling equity shares would typically avoid registering its securities with the SEC (an expensive and time-consuming process) only by utilizing one of a number of “safe harbors.”  This generally means selling shares only or primarily to accredited investors – those higher-income individuals.  Of course, such a restrictive means of selling securities leaves ordinary Joes out of the investment game and prevents start-up enterprises from seeking funds from the public at large (the “crowd.”)

Skeptics have maintained that there is no way the SEC would permit start-ups to sell securities to non-accredited investors without a blanket of regulation so thick as essentially to smother the freedom from regulatory formalities that true crowdfunding is supposed to embrace.   On the other hand, the very purpose of many securities laws is to prevent issuers from taking advantage of investors, which can easily be the case if a seller, a little-known start-up perhaps, is permitted to sell to an unsophisticated investor without any required disclosures.

The skeptics may be correct, at least in part, as the newly proposed rules require the issuer of securities to jump through a few more hoops than proponents of unadulterated crowdfunding may like.  It is proposed that an issuer will be able to raise up to $1 million a year from the crowd (non-accredited investors), but that if it raises over $500,000, it must provide audited financial statements, which can be a small hurdle for startups with no accounting history.  The issuer must also disclose information regarding its officers and how the proceeds of sale will be used, and it must also release financial statements.  In addition, the issuer can only sell through a broker-dealer (a long recognized conduit for sale of securities) or a crowdfunding portal, a new breed that has its own requirements and regulations.

But perhaps a few more hoops is not so bad.  As a business attorney, I help small small businesses comply with a variety of regulations which offer far less gain for the business (if any) than crowdfunding seems to offer.  Although the proposed rules may be somewhat cumbersome, if they open a door to new possibilities that small businesses have been seeking for so long, the price of admission may well be worth it.

Finally, it should be emphasized that these rules are still only proposed rules.  You should certainly speak to a securities lawyer of your choice before offering shares to the crowd! We at Briskin, Cross & Sanford would be glad to assist you.

Hat tip to Reuters.

Astroturfing: New York cracks down on fake internet reviews

Astroturfing it is the practice of hiring internet reviewers to post fake positive reviews of your business on the internet using different usernames and IP addresses.

This practice has become increasingly prevalent because positive internet reviews are capable of increasing a company’s revenues by upwards of 10%.

Where expert reviews once drove revenue, purchaser behavior is increasingly driven by the experiences of fellow consumers (or people we think are fellow consumers).  Taken in the aggregate, consumer reviews can be much more predictive than, say, the review of one expert.  For example, I find reviews on www.redbox.com to be remarkably accurate.  As a result, I tend to rent those highly-rated movies and I also continue to use Redbox.  Without these reviews I might spend my money on different movies or different rental channels.  That’s the power that consumer reviews have.

To leverage this power, some companies have begun hiring professional online reviewers to post positive reviews under fake names using different IP addresses to avoid getting detected by filters that companies like Yelp use to weed out fake reviews.  One Craigslist ad solicited people to post reviews on Yelp, Google Maps, and CitySearch, “without getting flagged.”  These fake posters may be offshore in the Phillippines, Bangladesh, or Eastern Europe, or they may be employees of an SEO (search engine optimization) company right here in the US.

Whereas SEO companies once relied on building a better website, increasing the use of key terms, and generally trying to second-guess the search-engine algorithms to increase visitor traffic, increasingly such companies have begun offering “reputation management” as an add-on service.  The client-business benefits from having positive online reviews that increases revenue, the SEO benefits by earning extra income from the business, and the fake poster benefits by earning  $1 to $10 per post.  It’s no wonder that the practice is expanding.

The problem, however, is that fake posts dilute credibility and mislead consumers. 

Ok, so maybe the damages aren’t that bad, right?  You go for that tandori you read is so awesome and it turns out to be dry and flavorless.  Definitely a let-down, but should that be actionable?  Well here’s a bigger problem.  Fake reviews can provide a major revenue boost to companies, and arguably, that is money consumers might be spending at other competing businesses.  So the damage occurs not only by misleading consumers, but also by giving an unfair advantage to businesses who are willing to violate the law.

Although increasingly commonplace, astroturfing in fact constitutes a false and deceptive business practice under many states’ laws.  Recently, New York’s Attorney General, Eric Schneiderman announced an agreement reached with 19 companies to stop their astroturfing practices.  Several offenders were assessed penalties ranging from $2,500 to just under $100,000.  The legal basis for Schneiderman’s initiative is New York Executive Law § 63(12) and New York General Business Law §§ 349 and 350.  Under these laws, astroturfing is considered a fraudulent business practice and  false advertising punishable by injunction and fine.

Here in Georgia, the Uniform Deceptive Trade Practices Act, O.C.G.A. § 10-1-372, prohibits a business from representing that goods or services have sponsorship that they do not have.

The bottom line?  It might seem that everyone is doing it, but the question may be, for how long?  Most states have laws similar to those in New York and Georgia prohibiting false and deceptive business practices.  So you need to ask yourself… just because everyone else is doing it, should I?  If you have questions about competition and your growing business, contact the business attorneys at Briskin, Cross & Sanford.

Google’s terms more complex than Beowulf

I have commented before on Mark Anderson‘s common-sense observations and wry tone. Here, true to form, he notes the functional unreadability for many users of Google’s Terms and Conditions and suggests that they should be written more like Fifty Shades of Grey (well… that’s not quite what he says).

Of course, we know (possibly from guilty experience) that most readers don’t read the terms and conditions (“T&C”) or terms of service (“TOS”) before clicking the “download” or “accept” button anyway, although it is not clear whether we don’t read them because they are difficult or whether they have evolved to become difficult and obtuse because most people don’t bother to read them and therefore few sales are lost because the terms are inaccessible or unacceptably harsh.

One software vendor that offered a $1,000 reward to anyone who read the fine print in its license agreement and hid the offer in plain site in its terms of service did not receive a response claiming the prize for four months and more than three thousand downloads.  Another inserted a term providing that if a user did not register the downloaded evaluation copy of its software properly, “a leather-winged demon of the night will tear itself, shrieking blood and fury, from the endless caverns of the nether world, hurl itself into the darkness with a thirst for blood on its slavering fangs and search the very threads of time for the throbbing of your heartbeat.

For contract attorneys and IP lawyers drafting terms and conditions, end-user license agreements (“EULA”), and click-wrap agreements in general, especially those designed for use by ordinary online consumers, the most difficult part of the task is often to provide both maximum legal coverage and maximum clarity at the same time.

This should never be an excuse, of course, for not striving for that elusive blend of clarity and coverage. A clear contract will always be more enforceable, and the best business practice is rarely to “let the buyer beware” and blame the reader for not getting assistance if any of the terms he or she is invited to “click here to accept” are difficult to understand.

Of course another way to get readers to actually pay attention to the terms of service, is to have a celebrity perform a dramatic rendition of them.  Mr. Anderson has previously drawn our attention to the hilarious reading of Apple’s EULA by Richard Dryfus (click here to listen to the Dryfus reading, and be sure to click to listen to the “Effective until” segment).

If you are struggling with your own (or someone else’s) T&C, TOS, EULA or Click-Wrap Agreement–and you don’t have ready access to a celebrity like Richard Dryfus to read it for you–the contract and intellectual property attorneys at Briskin, Cross and Sanford will be more than happy to assist.

IP Draughts

beowulfIP Draughts spluttered over his porridge this morning, while reading an item in his newspaper.  According to researchers at the University of Nottingham, if you want to understand Google’s internet user agreement you need a higher level of literacy than you need to understand Beowulf, the Anglo-Saxon poem that was written about 1000 years ago.  Non-firewalled news report here.

The research team has developed some software that will rate the readability of website text. Called Literatin, it has been developed to work best with Google Chrome.  There is an amusing irony here: you have to accept the Google terms before you can use the software!  It seems that there is also a version that uses Firefox.  See here to download either version.  IP Draughts wonders whether it uses any of the same methodology as the Bla-Bla Meter, which we reported on here.

Ms Ewa Luger (@ew_luger)…

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The end of the unpaid internship?

Unpaid internships: many of us done them. In fact, the unpaid internship seems increasingly to be a rite of passage in many industries (law included!).

But what happens when unpaid internships intersect with the national Fair Labor Standards Act, which governs minimum wage and overtime requirements?  The results may not be good for the business.

Just ask Fox Searchlight Pictures. A New York federal judge recently found that Fox Searchlight Pictures violated minimum wage and overtime laws by failing to pay two interns who worked on the 2010 movie “Black Swan.” According to the judge, Fox Searchlight Pictures should have paid the interns because they did the same non-industry related tasks as regular, paid employees, such as organizing filing cabinets, tracking purchase orders, making copies, drafting cover letters, and running errands.

In reaching his decision, the judge followed the United States Department of Labor’s six-part test for determining whether an internship can be unpaid. Under the test, the internship must be similar to training given in an educational environment, created for the benefit of the intern, and should not replace the work of regular employees. Further, the intern should work under close supervision of existing employees, and the employer should not receive any immediate benefit from the intern.

How many internships that you know can truly pass that test?

The district court’s ruling against Fox Searchlight is not necessarily the end of the unpaid internship, but It should clearly serve as a warning to businesses everywhere to run its unpaid internship program past its legal counsel. Companies with questions should feel free to call an employment lawyer at Briskin, Cross & Sanford for more information.

Pinterest wins $7.2M in legal battle with cybersquatter

Chinese cybersquatter Qian Jin, in one of the most brazen cybersquatting cases to come to court in months if not years, has been ordered by the US District Court for the Northern District of California to pay Pinterest $7.2 million in damages and legal fees and turn over to Pinterest the domains (e.g. pintesrest.com, pinterests.com, etc.) he had set up to divert inadvertent searchers to his own slew of money-making websites.  Hat tip to Dara Kerr of CNET: Pinterest wins $7.2M in legal battle with cybersquatter | Internet & Media – CNET News.

Alleging Cyberpiracy, Trademark Infringement, Dilution, and a series of California state law claims, the complaint charges that Pinterest was not Jin’s only target: the serial cybersquatter registered “domains that appear to infringe upon the marks of popular companies, especially online companies, across the globe, including Google, Facebook, Twitter, Etsy, Eventbrite, Foursquare, Hotmail, Hulu, Lotus, Spotify, Blekko, Dwolla, Volunia, Skillshare, Jumio, Scribd, Zazzle, and Zynga.” (read the full complaint here).

Not only did Qian Jin register domains that were clearly intended to cause confusion with and dilute a wide variety of famous brands, he even tried to register Twitter, Foursquare, Instagram, Quora, and Pinterest  as trademarks in China… did he think that this would stop other Chinese cyberpirates from moving in on his territory?

Action in the case was suspended for some time while Pinterest achieved service on Jin in China, which it eventually managed to do in January, 2013. Qian Jin (perhaps not surprisingly) failed to file an answer in the case, and the Court finally awarded a default judgment to Pinterest, pulling the plug on Jin’s operation for good.

While the Court’s order may help Pinterest gain control of the infringing domains, Pinterest’s chances of collecting a single Yuan of the $7.2 million judgment from Qian Jin are probably as remote as, well, China.  For our purposes, however, the judgment is not just a shot across the bows of would-be domain squatters, cyberpirates, and trademark infringers across the globe but a salutary warning to small-time hucksters and wannabe cyberpirates trying to shake down local businesses in exactly the same way.