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The Legal Issues Surrounding Rebranding Your Business [e87]

The guys end the week discussing another well known company making critical labor law violations.  The two then answer, “We are going through a rebranding process, what should we look for on the legal side?”

For a more in depth analysis of today’s question, check out Nasir’s blog post.

Transcript:

NASIR: Welcome to Legally Sound Smart Business. This is Nasir Pasha.
MATT: This is Matt Staub.
NASIR: And welcome to the business law podcast where we cover business legal news and also answer some of your business legal questions that you, the listener, can send in to ask@legallysoundsmartbusiness.com.
MATT: After the two debacles earlier in the week, you finally got a good intro.
NASIR: I know.
MATT: Good job.
NASIR: I’ve been practicing.
MATT: Yeah.
NASIR: It took me three times.
MATT: I hope so. Once it gets to the end of the week, I hope you’ll be a lot better.
NASIR: Sorry. Next time, you do it.
MATT: Well, this isn’t like our last episode which dealt with football but we’re going to talk about…
NASIR: Tesla.
MATT: SpaceX.
NASIR: Oh, we’ve talked about SpaceX.
MATT: We’ve talked about him before – Elon Musk. I think last we spoke about him was when he opened up his patents to anyone who wants to infringe upon them.
NASIR: Yeah.
MATT: Or I guess it wouldn’t be infringement if it’s asked for but…
NASIR: Please, infringe on my patents. No, yeah, Elon Musk is definitely a…
MATT: Innovator.
NASIR: Innovator but also, like, they like to change things and do things differently.
MATT: Disruptor.
NASIR: Disruptor – that’s the word.
MATT: He might rethink that patent strategy after these recent labor lawsuits.
NASIR: Yeah.
MATT: So, he sued SpaceX, one of his companies here – the private space launch provider, for those of you who don’t know which many people can afford, I think. It’s being sued by former employees. You know, the typical employee lawsuits – weren’t allowed to take breaks, weren’t paid overtime, company failed to give them enough time before a round of lay-offs. This was in California?
NASIR: Yeah, we haven’t dealt with it a lot because, when you do lay-off a number of people, there are some extra processes that you have to go through as far as notification and things like that – everything from how you handle the actual benefits package to that effect. Also, California law, I think, requires 60 days’ notice if you’re laying off more than 50 employees up to a certain amount. It’s not something we deal with a lot, obviously, but that was a big issue. I know we covered LinkedIn, was it last Friday? About their labor law violations but I just want to reiterate, once again, a huge company. Well, SpaceX is probably not as big. I mean, they’re kind of new but I know they have a lot of money into it but the point is that a company that should know, obviously they know enough about patent law – at least Elon Musk knows enough about patent law to applying on that. They make these labor law mistakes all the time and, though many of you guys may not be laying off more than 50 people in one day, when it comes to allowing them to take breaks, paying overtime, these things are very common to every business.
MATT: Yeah, and they said they laid off 200 to 400 workers last month which I just looked up. At the end of last year, they had about 3,800 employees.
NASIR: That’s a good size.
MATT: It’s actually a pretty decent chunk but, yeah, like you said, 60 days before lay-offs that involve 50 to 499 employees in California. Should have done that and I guess that’s the moral of the story, right? We talk with smaller businesses all the time. They can definitely make these mistakes but these other companies too that are making the same mistakes, I don’t know if they think they’re immune to it or what the deal is.
NASIR: I think it’s just ignorance of the law. You know, picking on the CEO of the company, obviously, these kinds of mistakes are made my middle management. For example, look at this, these employees are accusing them for saying that they rounded time entries to reflect total hours than were actually worked – fewer total hours. Basically, they were rounding down. Usually, if you’re rounding, you would round up when it comes to employee hours. Second is that they would have them miss meal breaks and rest periods. Everyone knows about meal breaks and, in California, you have to take them unless they’re waived. But rest periods too, a lot of the times, it’s something very easily forgotten about, especially for a company like this. When you have this going on a company-wide basis, it multiplies over and over again per employee per violation per multiple instances. It’s just not a fun thing to go through.
MATT: Yeah, that’s how it is. Everyone thinks they can get away with it, I guess. I mean, even especially for someone that’s this well-known. Like, you’re not going to be able to pull this off and deeper pockets and it’s just never a good idea in any setting.
NASIR: Let’s be fair. Let’s get the employer’s perspective. The lawyer, James Hawkins, he said – let’s see – no comment. SpaceX also declined to comment on the matter. I just wanted to be fair, just to kind of give that perspective of things.
MATT: Yeah, seems to be the standard. People can look forward to it next Friday when we talk about another company that’s making the exact same mistakes.
NASIR: Yeah, exactly.
[MUSIC]
NASIR: All right. Well, let’s get to the question of the day.
MATT: “We are going through a rebranding process. What should we look for on the legal side?”
I like questions like this where, you know, it’s not like the one about tips where it was a yes or no. This is kind of an open-ended legal question, I suppose.
NASIR: Our firm has gone through rebranding and our clients have gone through it and, obviously, there’s a lot of marketing issues and even kind of logistical issues of going through that. For example, when we went through it, we actually changed our legal entity name because there were legal reasons that we were going through a rebranding. But I think one of the first things that I tell clients to do is to do a trademark search. If you’re going through getting a new brand, you’re going to be putting money into this brand, then I would want to make sure that you’re able to own the intellectual property rights to that name, specifically the trademark.
MATT: It’s not just that, too. I mean, we talked about this just last week. For your branding, you’ve got to make sure that, I assume they’re talking about what their name’s going to be.
NASIR: Yeah.
MATT: Maybe not.
NASIR: I assume.
MATT: If they are, you’ve got to make sure it’s available when you register for it but I think, like you said just now, the trademark, the intellectual property side is going to be the most important. I mean, that’s where you get your value in your brand – through a trademark. And so, you have to make sure that it’s available if you really want to build a brand that’s going to be the big money right there.
NASIR: I’m trying to think of other issues. Even this story that we covered or our blog post, we focused on the intellectual property issues. Even the copyright for your logo. But there are some other issues that people may not be familiar with. For example, when you hire somebody to design a logo, just as if you’ve hired a photographer and so forth, you’ve got to make sure that you own the copyright free and clear that that person that designed it is not going to hold it hostage if you make modifications or resell it or what-have-you. You want to make sure you have that and I also discussed how you may have some legal changes for your rebranding. You can change the name of your entity. I think this is a very common question that people don’t realize. You can keep the same Tax ID and just change the name of your entity by going through the filing at the Secretary of State. If you’re filed in multiple states, it’s a hassle in rebranding and so forth. A lot of times, bank accounts still require you to actually open up a new bank account even though it’s the same Tax ID. It depends on the bank.
MATT: Right. You made a very good point. You would think it’s just common sense and it’s going to be included but, if you pay someone to create a logo for you in this rebranding process, you want to make sure that you own that free and clear and there’s not anything in there that they’re going to say they have some sort of right to because then you’ll run into a pretty unfortunate situation at that point.
NASIR: Most reputable designers will sign everything to you once you pay for it or whatever. But, a lot of times, these issues come up because, maybe at first, that graphic designer doesn’t really understand the copyright law very well and so they don’t have any of that language of the assignment and neither does the company that’s hiring them. Maybe later on, there’s a dispute and that designer is like, “Well, you can’t use it because you haven’t paid me all the money. You still owe me this,” or whatever.
MATT: It shouldn’t be an issue. Any reputable firm that’s going to be doing this is going to provide for that and I would think, even if they tried to be deceptive about it, you know, it’d come back to haunt them, too. But, yeah, just something to look out for. It’s just another consideration.
NASIR: Yeah.
MATT: We’re just trying to answer their question. You don’t need to get upset about it, audience.
NASIR: Listeners.
MATT: Listener – the one person listening.
NASIR: I think we covered this, right? “Audience” implies that they’re…
MATT: When I said “audience” just then, it didn’t seem right.
NASIR: It didn’t seem right. It seemed morally wrong to say that.
MATT: Morally wrong, ah, yeah.
NASIR: Well, that’s what you were referring to.
MATT: My morals are compromised.
NASIR: So, I think we covered everything but rebranding in general is fun, I think. Don’t forget to get your domain name. I mean, I think that’s pretty obvious, especially a dot-pizza domain name which still hasn’t come out yet. We’re still waiting for that.
MATT: Yeah.
NASIR: You should be good.
MATT: Simple as that.
NASIR: Well, have a good week, everyone – or weekend. Don’t forget to leave a positive review on iTunes. You do that by going to… I don’t know. I did it by going to itunes.com but can you do that within the actual software too or on your phone? Do you know?
MATT: You know, that’s a good question. I don’t think you can. I think I tried to do it and I couldn’t and I think this is a holiday weekend too, right?
NASIR: Yeah, I think you’re right. I know it takes a little extra effort but it really helps us out a little bit so, if you do have a second, please do so right now.
MATT: You have an extra day off of work. I mean, it’s a full day, full 24 hours – or I guess full 8 hours – of time you wouldn’t have had. You can leave one review. It takes one minute at most.
NASIR: Yeah, it takes 8 hours to do. Just do it really quickly.
MATT: Block out your 8 hours you would have worked to leave reviews.
NASIR: All right. Thanks everyone.
MATT: Keep it sound and keep it smart.

Nasir Pasha & Matt Staub

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The Podcast Where Nasir Pasha and Matthew Staub cover business in the news with their legal twist and answer business legal questions that you the listener can send it to ask@legallysoundsmartbusiness.com.

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