Category Archives: Employee Issues

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Just Because You Say It, Doesn't Make It So

Many companies in the technology industry pay workers as “independent contractors” or “1099 workers.” In theory, classifying individuals as independent contractors rather than employees can bestow significant economic benefits on a company. This option may be very attractive to a start-up who may be short on cash to pay salaries and fringe benefits. When independent … Continue reading this entry

Choosing the Right Path for Liquidity: Business and Personal Considerations

Choosing to sell is only the first of many complicated decisions founders make when considering an exit. Founders face countless challenges at this crucial turning point for their company. At the 2015 FOLEYTech Summit, Susan Pravda, Foley’s Boston Office Managing Partner, led panelists David Friend, Co-Founder and Executive Chairman of Carbonite, Inc.; Ron Gruner, Co-Founder … Continue reading this entry

Tips for Protecting Your Company Against Cyberattacks

Cybersecurity has become, as it should, an extremely important topic on company boards’ agendas. The main question on everyone’s mind is: “How can we eliminate this problem?” The answer, unfortunately, is that you can’t. Hackers are becoming more sophisticated, and their knowledge evolves with every new technology. As discussed by a panel of experts at … Continue reading this entry

Tips for Going Global: Plan Before You Expand

Companies enjoying success in the U.S. often seek global expansion to gain strategic benefits from accessing new markets—new revenue potential, talent acquisition and increased brand awareness. Before replicating your business for a new market and approaching global expansion as a default growth option, the development of a well-constructed business strategy is imperative. International business expansion … Continue reading this entry

Coming to America Part II: Legal & Cultural Challenges for Emerging Companies

In our last post “Coming to America Part I,” we discussed why emerging companies would choose enter the US market to do business. In this post, we will discuss the many interrelated legal and cultural factors non-US companies must consider in order to establish a successful US presence.… Continue reading this entry

Coming to America Part I: Legal & Cultural Challenges for Emerging Companies

As of late, many emerging companies have decided to enter the U.S. market. While international expansion is an important Ubusiness milestone, there are multiple legal and cultural considerations companies must reflect on. In this two part series, we will discuss why companies choose to come to the United States to do business and what companies … Continue reading this entry

Entrepreneurs: The New Wave of Immigrants

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In the last ten years, the number of US companies started by foreign-born entrepreneurs has skyrocketed. From Google, Facebook, LinkedIn, Zip Car and Tesla, foreign-born founders created some of the most successful US companies. Indeed, whereas before 2006 approximately 20% of venture-backed public companies were founded by immigrants, from 2006 to 2012, this percentage grew to … Continue reading this entry

Navigating Employment-Based Visas for Startups

Startups often seek to hire highly educated employees with degrees in STEM (science, technology, engineering and science) fields in order to compete with their established competitors. Post-graduate international students have emerged as the leading source of talent for startups as nearly 1/3 of all international students (or over 330,000 such students) are enrolled in STEM … Continue reading this entry

The Creeping Union Part II: Why You Should Start Planning Now

In our last post, we summarized the 2011 Specialty Healthcare decision and the potential for the NLRB to recognize an unduly burdensome number of smaller collective bargaining units. So far, cases interpreting Specialty Healthcare indicate that the NLRB’s expanded view has not resulted in a proliferation of arbitrary bargaining units. Two recent cases decided within … Continue reading this entry

The Creeping Union Part I: Could a “Micro-Union” Happen to You?

Is it ever too early for a startup business to consider the potential impact of unionized labor on future operations? According to a line of cases stemming from a groundbreaking 2011 National Labor Relations Board (NLRB) decision, the answer is “no.” In fact, as explained below, the early stages of a company’s life may be … Continue reading this entry

Beware of Promises

In the early stages of a new venture, things move quickly. An entrepreneur will talk with many different potential team members, some of whom aren’t a good fit, some of whom become co-founders and valued long-term partners, and some of whom may seem like a good fit but ultimately don’t come aboard or add value. These … Continue reading this entry

Do You Need a Pre-Nup … for Your Co-Founders?

When you pop the question, “Will you co-found with me?”, you are probably not already thinking about separation. However, not all partnerships will go the distance. Personalities will clash. Creative visions will differ. Personal circumstances will change. Often, a parting of ways is sudden and less than amicable. Without a pre-nup, the departure of a … Continue reading this entry

You Think You Own Your IP? Think Again!

If we asked you whether you own your intellectual property, your answer most likely would be a swift and unqualified “yes.” Not so fast… Did you invent your idea while at school or working for your prior employer? Has everyone ever involved with your idea signed an assignment of inventions agreement? It is not uncommon … Continue reading this entry

Giving Stock to Your Employees — How and How Much?

Equity grants can be an attractive alternative to cash when compensating employees, consultants, and service providers. Beware, though: if not structured properly, equity grants can cause some nasty consequences for the company and the recipient, including issues related to taxes and labor and employment laws. Deciding on the proper number of shares can also be … Continue reading this entry

When Should Vesting of Equity Grants Accelerate?

The importance of time-based vesting for equity and/or rights to acquire equity granted to founders and subsequent employees of venture-backed companies should not be understated. Equally important is what events should cause the agreed upon vesting schedule to accelerate. While the possible permutations for acceleration are endless, three primary flavors arise with great frequency: (i) … Continue reading this entry

What Marriage Equality Means for Your Employee Benefits

A frequent headline in the news as of late has been “Federal Judge in State X finds same-sex marriage ban unconstitutional” and then shortly thereafter “Hundreds of couples marry in State X” complete with a picture of a same-sex couple who have been together for decades overjoyed at the prospect of legal recognition for their … Continue reading this entry

Prepare to Attract Rock Stars From Day One: A Framework for Considering Equity Compensation in the C-Suite

As your company grows, you may reach a point when you want to bring in big talent, whether it be a new CFO, Director of Marketing, or someone to take your brand into a new space. Many of these so-called “rock stars” may be coming from big Fortune 500 companies with big salaries to match. … Continue reading this entry

Protecting Your Value: The Importance of the Employee NDA

Where is your company’s value? If you are a young start-up company, it’s probably in ideas. Any new invention, new way of attracting business, new way of streamlining a process, or anything else “new” starts with an idea. If value is located in an idea, how do you ensure that it is protected?  With a Nondisclosure, … Continue reading this entry

ISO v. NQSO: The Difference or Lack Thereof

Equity compensation in the form of stock options is a common means of compensating key contributors to a growing business, especially where the cash compensation that these individuals receive is below the market rate for the skills and experience that they bring to the table. These stock options come in two different flavors: Incentive Stock … Continue reading this entry

How Strong Is My Noncompete?: It's Worth Revisiting

Employers and executives often question the enforceability of noncompetition agreements. In most states, covenants not to compete and covenants of non-solicitation of other employees or customers are enforceable if they are drafted correctly. State law governs the enforceability of noncompetition agreements and, while California is notoriously unfavorable to such agreements, most states do allow them … Continue reading this entry

Giving Stock to Your Employees — How and How Much?

Equity grants can be an attractive alternative to cash when compensating employees, consultants, and service providers. However, if not structured properly, equity grants can cause some nasty consequences for the recipient. Additionally, deciding on the proper number of shares can be difficult. An issuance of stock can result in a tax liability for the recipient, … Continue reading this entry