Business Beware: You Can’t Take Deceptive Steps to Manipulate the Collection or Publishing of Negative Reviews on Your Website

Businesses are to avoid potentially deceptive conduct that would confuse consumers under Section 5 of the Federal Trade Commission Act, and the FTC is now focusing very heavily on deceptive customer reviews and endorsements. Deceptive conduct includes any conduct which treats positive and negative reviews unequally, thus misleading consumers of useful information and inflating the product’s star rating.

In one of its first cases, the FTC pursued Fashion Nova, LLC, a fast fashion retailer that attempted to conceal negative reviews. According to the complaint, “Fashion Nova used a third- party online product review management interface to post four- and five-star reviews and hold off on lower star reviews [estimated in the hundreds of thousands] for the company’s approval.” Fashion Nova never approved or posted the lower star reviews. In its settlement with the FTC, Fashion Nova is prohibited from suppressing customer reviews of its products and is required to pay $4.2 million to settle the FTC’s allegations.

What does this mean for businesses that use or consult regarding consumer reviews? Continue reading »

Essential Points to Follow When Entering Into or Renewing Your Lease

In spite of the uncertainties caused by the pandemic, your lease remains critical to your business. Commercial leases are complex transactions and should be undertaken with great care.

Following these basic points will make the lease renewal or new lease go smoothly. Continue reading »

Illinois Enacts New Restrictions for Considering Criminal History in Employment Decisions and Equal Pay Requirements

Employment law changes regarding human rights and equal pay have arrived in Illinois.  On March 23, 2021, Governor J.B. Pritzker signed into law S.B. 1480, which makes significant amendments to both the Illinois Human Rights Act (IHRA) and the Illinois Equal Pay Act (IEPA), effective immediately.

Criminal Conviction Record and Employment

S.B. 1480 amends the IHRA with more limitations on how an employer may use an employee’s or applicant’s criminal conviction record when making employment decisions. It is now a civil rights violation for any employer to use a criminal conviction record as a basis to refuse to hire, terminate, or take any other adverse employment action against the applicant or employee with two exceptions:

1. There is a “substantial relationship” between one or more of the previous criminal offenses and the employment sought or held; or
2. By granting or continuing employment, an “unreasonable risk” would exist “to property or to the safety or welfare of specific individuals or the general public.”^[1]

To determine whether a substantial relationship exists, an employer should consider whether the employment position “offers an opportunity for the same or a similar offense to occur and whether the circumstances leading to the conduct for which the person was convicted will recur in the employment position.”^[2]

The new law also requires an employer to consider the following relevant factors when making this determination: Continue reading »

Salaries Speak Louder than Words: Equal Pay Day 2021

Equal Pay Day 2021 is March 24, symbolizing how far into the year women must work to earn what men earned in the previous year. Thankfully, this date is not static and falls earlier each year with this year falling 19 days earlier than just five years ago. While we celebrate this achievement, we have a long way to go to completely close the pay gap between men and women.

The Equal Pay Act has prohibited sex-based wage discrimination for over 50 years. Under the Act, an employer may justify wage disparities only based on one of four exceptions:

• Seniority;
• Merit;
• Measurement of earnings by quantity or quality of production; or
• A differential based on “any factor other than sex.”

The last “catch-all” exception was the focus of Rizo v. Yovino.Aileen Rizo, an experienced middle and high school math teacher, was hired as a math consultant by the Fresno County Office of Education (“Fresno”). Continue reading »

What is The Best Franchise Model For You?

Today, approximately 35 percent of franchises are owned solely or co-owned by women and that percentage is steadily increasing. Women’s superior relationship skills shine in service businesses and women gravitate toward more female oriented franchise models such as hair salons, weight loss centers, flower shops, cosmetic companies, etc. Driven by the desire to start a small business in order to create more flexibility and control over their time and to be their own boss, the franchising model is an exciting lure. Caution, however, speed bumps abound. Your entrepreneurial zeal should be tempered with a reality knowledge check which includes due diligence performed by you, number crunching services performed by your accountant and perspective and legal advice provided by your attorney.

What to Expect from Franchise System

Although the franchise model is no guarantee, the model may increase your chance of staying in business. The Small Business Administration, however, has consistently found that franchises have the same success rates as independent small businesses. Businesses fail for many reasons, some of which the franchise model cannot fix.  A good franchisor should eliminate, control, or manage many of the common mistakes a starting small business makes.  At the minimum for the initial investment and recurring costs of royalty and marketing monthly fees, a franchisee should receive brand recognition (trademarks, advertising and promotion), quality control, site selection and opening support, continuing training and operational guidance, stability, and value for the investment.

Continue reading »

How the Washington Attorney General Is Changing Franchise Agreements Nationwide and What It May Mean For You

The state of Washington has a reputation as a worker-friendly state with some of the highest minimum wages in the country. So it’s no surprise that Washington Attorney General Robert Ferguson has been aggressively pursuing large corporate franchisors that include no-poach clauses in their franchise agreements. What is surprising is that he’s affecting franchise agreements across the U.S.  (A “no-poach clause” is language in the franchise agreement that prevents a franchisee from hiring current and former employees of another franchisee or its franchisor.)

Businesses are always trying to gain competitive advantages by pushing the boundaries of regulations that promote fair competition. For example, many workers have non-compete clauses in their take-it-or-leave-it employment agreements. These clauses prevent a  competitive labor market which creates a wage-fixing affect and triggers anti-trust laws. As a result, many courts have determined that non-compete clauses for employees without knowledge of trade secrets and with little ability to sway customers to follow them are unenforceable. Courts have refused to enforce non-competes for yoga instructors, camp counselors, and fast food employees.

Many franchisors include “no-poach” clauses in their franchise agreements. The terms restrict franchisees from poaching each other’s employees by allowing the franchisor to terminate the franchise of any franchisee who hires a worker employed by another franchisee or its franchisor. No-poach agreements and non-compete agreements both discourage employees from leaving their current employer. Continue reading »