1. Is this contract not to compete enforceable?
2. Would you draft a noncompete agreement for me?

1. Enforceability of NonCompete Agreements

Whether the contract is called a “noncompete” or “do not compete” agreement, the intent is the same: the employer seeks to bind the employee from leaving employment and competing with the employer. Whether they are enforceable depends on a number of factors to be analyzed by an attorney. These factors are explained generally in these articles:

• Will Your Noncompete Clauses Stand Up in Court?
• Litigating Covenants Not to Compete

Before you ignore a noncompete agreement, you should consult with an attorney to analyze the contract. An attorney can give you a legal opinion regarding whether the noncompete is enforceable. The consequences of breeching a noncompete agreement may include a temporary restraining order preventing you from working in violation of the noncompete along with a lawsuit for monetary damages.
2. Drafting NonCompete Agreements

The laws involving noncompete agreements varies across the United States. A noncompete agreement that is enforceable in one state may not be enforceable in another. For this reason, understanding Minnesota law is important. Also, noncompete contract forms purchased on the internet may be inadequate for parties in Minnesota.

When I draft a noncompete agreement, the process involves carefully applying relevant Minnesota law to ensure the contract remains enforceable. Properly written noncompete agreements are routinely enforced by courts in Minnesota. However, mistakes can void the agreement. For this reason, you should consult with an attorney if you need a noncompete agreement drafted.

About the Author: Attorney Aaron Hall is licensed to practice law in Minnesota. His work is largely in the Twin Cities, Minneapolis and St. Paul, MN.

Step 1: Elect to be treated as a Corporation

A. Single Owner LLC:

If the LLC has only one owner, the IRS will automatically treat the LLC as if it were a sole proprietorship (a disregarded entity), unless an election is made for it to be treated as a corporation. An LLC may elect corporate tax treatment using IRS Form 8832 (Form 8832 Entity Classification Election).

B. LLC Owned by More than One Person:

If the LLC has two or more owners, the IRS will automatically treat the LLC as if it were a partnership unless an election is made for it to be treated as a corporation. An LLC may elect corporate tax treatment using IRS Form 8832 (Form 8832 Entity Classification Election).

Step 2: Elect to be treated as an S Corp

Assuming the LLC qualifies to be an S Corp, the LLC may elect S Corp tax treatment using IRS Form 2553 (Form 2553 Election by a Small Business Corporation).

ADDITIONAL NOTES

Electing to have your LLC taxed as an S Corporation involves a couple procedural changes in paying and filing your taxes.

Quarterly Filings for an LLC Taxed as an S Corp

Keep in mind that if your business is treated as an S Corp, it must pay estimated taxes. But this inconvenience is offset by the tax benefit of an S Corp (self-employment tax savings).

Income Taxes at the End of the Year

Also, an S Corp must file different income tax forms at the end of the year (Which Forms Must I File?).

Shareholder-employees will receive two tax documents from the S-Corporation at the end of the year: a W-2 wage statement (income as an employee) and a Schedule K-1 statement (income as an owner).

No Self-Employment Tax for an S Corp Owner-Employee

Shareholder-employees of an S-Corp (including an LLC taxed as an S Corp) do not pay Self-Employment Tax because their wages are reported on a W-2, with Social Security and Medicare taxes already withheld. By contrast, the owner of an LLC that is taxed as a partnership or sole proprietorship (not an S Corp) does pay Self-Employment Tax. Self-Employment Tax is figured at the end of the year on Schedule SE of IRS Form 1040.

What is RSS?

Websites are norally accessed with a web browser. RSS is a technology that allows a webpage (blog, etc.) to be accessed without a web browser. RSS can be accessed by many tools, including an RSS reader, which is software that allows you to view the RSS feeds of many websites at once.

Are RSS Feeds Copyrighted?

In the United States, the author of any written material generally owns a copyright on that material. Since RSS is merely a way to access that material, the material is still copyrighted. RSS doesn’t change anything. Whether you use an RSS tool or a web browser to access material, the material is still copyrighted.

In other words, laws apply to new technology just as they would to traditional materials (books, brochures, etc.).

Are Scrapers Violating Copyrights?

Scrapers are software tools that copy material off one website and post the material to a website owned by the person using the scraper.  When scrapers copy material without permission of the copyright owner, copyright infringement occurs.

What Can I Do if My Website is Illegally Copied?

I answered this question and some others on these posts:

• Copyright & Trademark for Blogs and Domain Names
• Can I Copy Another Blogger’s Text? 

If you want to protect your material, or if you need to defend yourself in a copyright lawsuit, I would be glad to talk with you about your situation.

The rationale for such provisions may be based on the fact that (more…)

The strategy makes perfect sense from a business perspective. If someone is using Google to search for your competitor, get your advertisement displayed on the search engine results page. That’s what MTS Systems Corp. did when someone search for its competitor, Hysitron.

The problem is, according to Hysitron, use of Google Adwords in that way violated Hysitron’s trademark. MTS Systems disagreed, and tried to get the case dismissed on summary judgment. The Minnesota Federal District Court denied the motion on August 1, 2008, allowing the case to move forward.

The court discussed the legal issues in the case. (more…)

If the IRS is convinced that the IRS will probably not recover the amount owed, the IRS may make the taxpayer an offer to pay a reduced amount in a short period of time. This offer is called an “Offer in Compromise.”

An Offer in Compromise is subject to IRS regulations. Taxpayers who are evaluating an Offer in Compromise may be benefited by understanding these IRS regulations. Taxpayers may also benefit from knowing strategies for negotiating an Offer in Compromise.

A tax attorney can help taxpayers who are dealing with IRS debt or an Offer in Compromise. However, those with tax debt often cannot afford to hire a tax attorney. Fortunately, there are some good resources online for taxpayers who want to handle their Offer in Compromise without the assistance of a tax attorney.

Two articles provide some general help with an Offer in Compromise.

• Negotiating Offers In Compromise
• The IRS Offer in Compromise

If you decide that you would benefit from hiring a tax attorney, I would be glad to talk with you. Please call to schedule an appointment.

• free directory listing
• calls from new potential customers
• sometimes a free link to your website

Directory listings are especially valuable to small businesses that target a local geographic market, such as real estate agents, retail stores, accountants, attorneys, etc.

You can add a free business listing and a link to your website here:

• Google. This listing helps your search engine optimization (SEO) in Google, and causes your business to be listed near the top of searches for your business type in your city. Sign up now for a free local listing for your business: https://www.google.com/local/add/
• Superpages. SEOMOZ reports that Google looks at Superpages (among other sites) when Google considers what local businesses to display for searches. So by signing up for Superpages, you get a free directory listing, a link to your website, and some help in search engine rankings. Sign up now for a free local listing for your business: https://advertising.superpages.com/spportal/business-listing
• YellowPages. YellowPages doesn’t give you a free link to your website, but since YellowPages is such a popular site, you are likely to get new leads from people looking up business types in YellowPages. However, once you sign up, be prepared for a sales call from YellowPages trying to sell you upgrades to your listing. Sign up now for a free local listing for your business: http://store.yellowpages.com/post/.
• Best of the Web. BOTW gives you a free directory listing, a link to your website, and some help in search engine rankings. Sign up now for a free local listing for your business: http://local.botw.org/helpcenter/jumpstartproduct.aspx.

In response to this need, I have been spending evenings and weekends on a new effort to help small businesses: Minnesota Small Business. This organization helps small business owners network with each other, share ideas, and collaborate as they start and grow their businesses.

One goal of the Minnesota Small Business organization is to offer helpful guides to small business owners. Based on this, an important effort is underway to prepare advice for small business owners to help them through the various stages and decisions involved with growing a small business. This small business guide is developing into a comprehensive guide for small businesses, including legal, financial, planning, design, software, and other topics that small business owners frequently ask about.

If you are a small business owner and interested in learning more or willing to offer your expertise to other business owners, visit Minnesota Small Business.

Much has been written in blogs about the MinneDemo software that was demonstrated, so I’ll focus on the people.

MinneDemo People

I spoke with Justin Heideman who is doing some fascinating things at the Walker Art Center.

I met John Roberts, an attorney from New Counsel, which graciously provided hundreds of free drinks for everyone. John also has a fascinating legal practice with tech startups.

I didn’t meet him, but Roger Peters took a number of notes on his Tablet PC. I’m not sure if he will be publishing any of them online.

There was a long list of others who (more…)

They have nearly 50 employees and do some impressive work for franchisees, doctors, medical clinics, manufacturing companies, and more.

Andrew H. told me about the Firestorm networking group, which is built around a unique concept: the large group meets occasionally, but small groups meet more frequently for networking purposes. Looks like a great group.

They seem like a highly-competent and fun group of professionals, and I look forward to getting to know them better.