Mattress Giants v. Sleepoplis: The War On Getting You To Bed [e293]

January 2, 2018

With a seemingly endless amount of new mattress options becoming available, it is unsurprising that the market has become increasingly aggressive. As companies invest in more innovative solutions to get in front of customers, review sites, blogs and YouTube videos have moved to the forefront of how customers are deciding on their mattresses and how companies are attempting to battle for their business. With affiliate marketing becoming a colossal business for v/bloggers with the most coveted traffic, mattress companies are willing to pay influencers high affiliate commissions, but when relationships sour those same companies are just as glad to pay their attorneys.

Full Podcast Transcript

NASIR: Welcome to the podcast!

My name is Nasir Pasha.

MATT: And I’m Matt Staub. Two attorneys here with Pasha Law, practicing in California, Texas, New York, and Illinois.

NASIR: And this is where we talk about the business in the news and, also, add our legal twist to that business news.

MATT: This is going to come out after Thanksgiving, but I think this is a very appropriate story for Thanksgiving Day because it deals with actual sleeping, I guess, but it deals with mattresses.

NASIR: Do a lot of people buy mattresses on Black Friday or during Christmas holidays?

MATT: After the meal.

NASIR: I was thinking, like, the day after, you go out and buy a mattress.

One thing I didn’t realize is that this mattress industry is cutthroat. You wouldn’t think so, but it seems like, if you’re in the industry, whether you’re in retail or you’re in this now, these online mattress companies, this is where everything’s going now. You can literally buy your mattress online. You see it all over the internet – even on TV now they advertise for it. It’s pretty crazy.

MATT: Well, we’re going to be talking about the online aspect of it, as you say, but it makes sense if you’ve ever driven around and you see one company or one building business that sells mattresses and you’re likely to see a handful within a couple of minutes. I think the reason that is because, like you said, competition. Someone’s going to go to one store to look for a mattress. If they buy, that’s it. If not, there are going to be a bunch of competitors right there that can make the sale.

NASIR: The whole mattress thing, I’m sure you’ve bought a mattress before, I assume.

MATT: Never.

NASIR: Well, let me tell you what it’s like…

The whole mattress buying process, it’s never fun. I mean, not that shopping and stuff like that is ever fun. But it’s like they’re all the same. You’re making this kind of long-term investment where, if you make a mistake, even if they give you a guarantee return or whatever, you can try it out for 30 days, you’re not returning no mattress. Whatever you buy, you’re keeping. I can say that I’ve had pretty decent mattresses in my life. I would say that I kind of just get used to them – whether I like it or not.

MATT: All very good points. I’ve felt the same things. I don’t know about you, but the last one I purchased was actually online and it was through an ad on some podcast I had listened to. Like you said, it was try it out for a hundred days. If you don’t like it, we’ll come and pick it up. If you have to send it back, that’s not even feasible, really. I don’t know how you would even do that. But, yeah, it’s a big investment. They say, depending on how much sleep you get, I guess it would be anywhere from 25 percent to a third of your time of your life, potentially sleeping on a mattress.

NASIR: Yeah, that assumes that, when you’re sleeping, you’re sleeping on the mattress.

MATT: Exactly.

What we’re going to do is we’re going to kind of go through this. It’s a really interesting story that’s played out for a couple of years here dealing with online sales of mattresses which seems to be the growing trend. There’s a lot of different companies out there doing it – one of which is Casper which we’ll get into.

Take it back from the beginning here. There’s this website called Sleepopolis. It was started by an individual named Derek Hales back in 2014. Essentially, at the time, he was looking to purchase a mattress. I think he looked at a couple and he ended up buying one from a company online. He didn’t like it and sent it back and found another one.

Essentially, what you said earlier, there’s got to be a better way to go about this and get some more information and having to go through this whole process. He started this site, Sleepopolis, and it was pretty straightforward. It was a mattress review site. He would do whatever – lay on the mattress, get the specifics, et cetera, put a review on the site, put up videos on YouTube and that was it. It got some pretty high traffic, I think, right away. I think it was something like 25,000 views on the first video that he put up. Almost immediately, he saw something there and then started building out the site. Eventually, he said, “Well, I need to monetize this thing as well.”

The way he did it was through and what we’re going to get into in specific here was referred to as affiliate links or referral links. That is really what kicked off this whole issue that came up.

NASIR: Affiliate marketing is – I don’t want to say since the internet began because that’s definitely not true but there was a point where people realized that, when they’re talking about different products – whether it’s their blogs or they have any kind of websites that are about younger products or even, frankly, about anything. How you monetize it – besides just general advertisement – is, if you can get them to click onto another site and then they actually purchase something, then that target site will actually give you a percentage or some dollar flat fee amount for that sale.

And so, almost every major – I would say most – online retailers have some kind of affiliate program – whether it’s Amazon. In fact, Amazon was a big one. If you guys recall, people would blog, and they would have a little, “Hey, buy this to Amazon. I recommend this book,” or whatever. They would get a percentage – whether it’s a fixed fee or otherwise. And so, that really blew up to such an extent that online retailers realized that, in order to really do well on the web, you need to have an affiliate program and you can make a ton of sales. That’s exactly what happened in this case.

Sleepopolis blew up along with all these other online mattress reviewers, especially when it comes to the online mattress industry. It not only grew incredibly because of these affiliate marketing sites. They are actually dependent upon them. A lot of their sales were coming through these online review sites.

MATT: Real quick, just to contrast with the straight up advertisement would be a similar idea, I suppose, but in an ad, the business is paying, I would assume, an amount upfront to place whatever ad they want on the site as opposed to this where you can have these affiliate links in place. Basically, the business would have to pay the owner of the site if there’s a sale made, and they come through the channels, through their link, et cetera. There is a difference between the two and we’ll get into that on why that’s significant on the legal aspect.

NASIR: Actually, let me get into that for a second, just from a technical perspective so people understand. Again, people that are in business, this is very, very basic for them. But I just want to make sure that we’re all on the same page.

When advertisers pay, they can either pay by per click or per view. Per click, per view, it doesn’t matter whether there’s a scare or not. How it works technically, when you’re doing some kind of referral or affiliate program is when someone clicks on the link or maybe even if they go to your page, then a cookie – you know, I think everyone understands what a cookie is, a little file – goes on to your browser and, if later on, they ended up purchasing something, through the purchase checkout process, they detect that that cookie is on there and they’ll actually give credit to that online publisher.

MATT: Like you said, what he was doing here was started the reviews and then what he was doing initially was he put these affiliate links at the bottom of the reviews. What the rules are or what the law is you have to disclose the nature of these relationships which he did to some extent. We’ll get into whether it was sufficient or not under the law. But, just know in general, he would have reviews and at the bottom there would be these links that people click on direct to these different mattress sites and sales would be made and he would get a payment on the back end.

The interesting thing here is he was pretty successful doing it. I think he started out, he would get the deal he had in place was you’d get a $50.00 Amazon gift card for every mattress he sold which, if you look at the average price being $1,000, that’s five percent. That’s a pretty good deal. I think that’s relatively in line with what you would expect on this affiliate link setup that you have.

NASIR: Just think about how that changes the industry because, of course, most of us are used to going into a store and some mattress salesman selling you a mattress. Of course, a lot of those salesmen work on commission. Just think about how much work they have to do to get that sale.

I’m not saying that these people don’t require work because it requires a tremendous amount of work. But the idea is, once you have the website up, you have the content there and you have people going to it. It’s kind of just sitting back and seeing what works and what doesn’t. That five percent in volume seems pretty attractive. In fact, I think he ended up making at least… They don’t know exactly, but the understanding is that he’s made millions of dollars just on this affiliate marketing program.

MATT: Yeah, I think a conservative estimate was 1.6 to 2 million.

It’s exactly what you just said. Basically, building up or providing the content video, et cetera – that was the sale and it’s just on there and then his work is done. The sales process, he only has to do it once and then people get fed through it – through what we’ll call the purchasing funnel – and that’s how he ends up getting paid on the back end which, again, it’s great as long as you can get traffic to your site and people are making the purchase through the links. It’s kind of set it and forget it almost and that’s what makes these affiliate marketing plays so attractive, especially for websites that are basically solely content-based or review sites.

NASIR: Why are we talking this? I mean, this is kind of an interesting story.

We have this successful guy but, at a certain point, Casper wants to pull out of the affiliate marketing program and it’s at that point where things really start changing – not only in the industry but in legal battles as well.

There’s kind of a history and a trail to that because Casper and these other online mattress companies as well as other online reviewers, there’s been a lot of litigation in-between all of these competitors, between these review sites and a lot of emails have come out. You’ve seen how Casper and other online mattresses try to woo these reviewers in multiple ways. They’ll say, “Hey, look, I notice that you reviewed our mattress a little lower than our competitor. We would love to have you try it out again. Maybe we can fly you out to New York.” Basically, they don’t say it outright, but basically schmooze their way into getting a better review.

Of course, there’s a lot of implications to that because, like Matt said, when it comes to these affiliate marketing sites, especially if you’re actually reviewing their sites, the FTC has put up a bunch of different guidelines over the years and it’s become more and more clear that you have to disclose that relationship and how you disclose it becomes very important, of course.

MATT: What you said is really important because what Casper ended up doing was it went very hot and then completely cold. I will give the CEO credit. He saw the opportunity there and said, “Look, if we can just funnel these sales through this site, it’s much better than having to pay over avenues. It’s really a win-win for everyone.” So, he started pushing hard with Sleepopolis, particularly the owner, like you said, “What can we do to make this relationship better?” – offering to fly them out for the weekend to sleep on the mattress which is kind of weird but whatever; promising to increase the payouts from $50.00 to $60.00 which, $10.00, who cares? But he was selling a lot. That’s a pretty significant increase.

This is a smart piece, too – offering not only increasing the price that Sleepopolis was going to get but offering his readers, Sleepopolis’ readers, a discount through it as well. It looks attractive to the potential purchasers. They said, “Oh, I can get a discount through this.” That was a very savvy move, I thought, on the part of Casper.

So, they keep doing this, it really ups the ante. Then, Casper starts getting to the actual bad reviews of the mattresses themselves which I don’t know if we mentioned that or not and we probably should, but the big problem Casper had at the beginning was their mattresses weren’t getting great reviews in comparison to some of the other ones. That was their issue. That’s why they were really doing this push.

NASIR: Some would say – and I think Derek, the owner of Sleepopolis would say – it’s not necessarily bad reviews. It’s just that, in comparison, he even says, “It’s a good mattress.” But, when you compare prices and apples to apples, it’s like, in his opinion, he rates them lower than possibly the competitor.

This is what’s interesting. When Casper pulled out, that existed already – that kind of different reviews a little bit lesser a review of the competitor. But, when Casper pulled the plug o the affiliate program which I assume is going to be a significant amount of money, Sleepopolis also changed shortly thereafter how they present the reviews.

Most significantly, I don’t think they necessarily said anything different than what they already believed in but how thy highlighted it. For example, they added a little box on the Casper mattress review page and it said something like, “Thinking about buying a Casper? Do your homework.” It was kind of highlighted in such a way. “Check out these four mattresses companies that Sleepopolis loves.” The implication is, even if the opinion did not change, after they pulled the plug, now all of a sudden, the owner of the site has a financial incentive to steer their visitors to a different mattress. Of course, Casper did not like that, and they responded by suing not only Sleepopolis but a couple of other review sites as well.

MATT: To some extent, I get it. I mean, if the situation where, obviously, new mattresses come out and you would assume they’re going to be better technology to build it, put it in place. And so, the review or the rating of a Casper mattress, an older one, could go down or it could look worse in comparison. That probably makes sense. But, what you said, that was the problem that ultimately led to the lawsuit. It’s basically actively pushing the competitors of Casper on Sleepopolis’ site – of course, after the arrangement fizzled out. That was the big issue. That’s when Casper stepped in and sued for basically false advertising and deceptive practices. That’s really what got this thing rolling in terms of the back and forth. You mentioned a couple of other companies or a couple of other sites that got sued. They basically settled I think fairly quickly. We don’t really know the terms of that. But Sleepopolis stayed – no pun intended – stayed firm with their stance and tried to fight this thing out. That’s where we get into the real interesting legal battle between these two companies.

NASIR: As an FYI, these other companies that ended up settling, they actually ended up just removing the references to Casper all together which leads us to believe that may have been part of the actual settlement. So, Casper basically sued Sleepopolis and specifically the owner and the entity both in their individual capacity, basically saying, “Hey, you have deceptive practices because you didn’t disclose certain things.”

There’s even some factual statements that basically say in Sleepopolis that they’re not paid for the reviews. They do disclose the relationship, but it is interesting because, you know, the reason for this FTC regulation is to say, “Look, if I’m going to give you a review, I don’t want to present myself like I’m totally unbiased because I am getting paid for this, but that doesn’t necessarily mean it’s a dishonest review just so long as I disclose that.” That’s kind of the purpose of it.

And so, it almost seems as though Casper is saying that, because they started steering in a different direction, that was crossing the line and the argument is, “Well, if you disclose that there is a relationship, who cares if I’m starting to sell them? Yeah, I get paid for people that buy other mattresses beside Casper and I’m telling you the other mattresses are better than Casper. What’s wrong with that?” I think, on its face, there’s nothing so long as you follow the disclosure requirements by the letter of the law. That’s the issue Casper had. That’s the angle that they were trying to get at.

MATT: Yeah, and I think there’s some meat to that and a couple of statements that were made or a couple of the disclosures on Sleepopolis’ site that no reviewer content is paid for by any manufacturer or company. Basically, these are balanced reviews and things of that nature.

NASIR: Also, the actual disclosure of the affiliate relationships were buried in a remote corner of his site to such an extent that Sleepopolis actually changed that and adjusted that. I don’t actually have that version of the site previously, but it seems like there was an acknowledgement that, “Okay, something was wrong, and they fixed it.” So, there might have been something definitely there in that aspect.

MATT: Yeah, and I think there’s two big problems. Like you said, it’s the actual disclosure that’s required – the where and the how of that – and then the statements that were made also on the site about there’s no review or whatever is paid for which, I mean, I guess we’ll take that on its face, that could be true.

But there was definitely some statements on the Sleepopolis site that a judge questioned that could potentially become an issue. Because, here’s the thing, it’s going to be hard on Casper’s end to prove that these are false statements in fact because a lot of it is opinion-based. But there were some statements on there that the judge looked at and said, “All right, these are factual statements that are listed on the Sleepopolis site that could end up being false or deceiving or misrepresented, and those could become a problem.

It’s really two separate issues, but they kind of blend together a little bit.

NASIR: This case is going on. Actually, Fast Company released this article and kind of went through this whole story for us in a really great way. I have to give him credit for that in great details. We’ll link it. It was published back in October. They reference this in-court discussion that Sleepopolis and Derek and their council was having some settlement discussions with Casper. But then, shortly thereafter, they make a motion to basically amend their answer to actually counterclaim against Casper.

Let me restate that. They’re in the middle of settlement negotiation, supposedly. And then, maybe something doesn’t happen right in the way that they wat her to go. In fact, they were discussing possibly Sleepopolis paying something to Casper. But, shortly thereafter, Sleepopolis fires back and actually sues Casper back. What do they allege? They allege some allegations regarding negative SEO and we’ve covered negative SEO way in the past – you know, as soon as it started to get in the picture and we talked about then what are the legal implications of negative SEO.

So, I guess what happened was that, during the same period of Casper pulling out of the affiliate program and these other lawsuits going around, they hired a reputation management firm and it wasn’t proven. But then, Derek, the owner of Sleepopolis, basically started seeing all these bad links to their site. As you guys know, not all inbound links are good for SEO purposes. If it appears spammy or you’re using some kind of black hat technique, then Google will actually penalize you and push the rank in your search results actually down.

In order for him to combat it, he had to do what’s called disavowing the links and basically telling Google, “Hey, these links, I have nothing to do with them, so don’t count these against me.” If you ask any SEO guys, when you get a negative SEO attack, it is a very difficult situation to deal with a lot of times, especially if it’s sophisticated. Not only that, if you’re not sophisticated enough – whether it’s your SEO guys or otherwise – it can be very hard to deal with, just from that level. Derek happened to be pretty good at SEO. Obviously, he got to where he was because of that, I think. So, he was technically savvy.

Because of these actions, he actually filed a suit and says he has two theories. One is that it’s a tortious interference of a prospective economic advantage which is a tort theory. Second is some kind of unfair business practice statute based in the state of New York.

We talked about this but, when we saw it, we were kind of excited to see this because this is the first time that we’ve actually seen a high-profile case go toe to toe with a company that are alleging negative SEO practices.

MATT: Of course, we’re not going to find out what happened.

Let me timeline this out a little bit. Actually, the initial complaint by Casper was filed April 29, 2016. Almost a year to the day, April 20, 2017, was when this counterclaim was filed. It looks like, in July of 2017, the Sleepopolis site has been sold. Who was it sold to? Jack Media LLC acquired Sleepopolis.com which, okay, whatever. Who cares? But Casper provided financial support to Jack Media to acquire the site. They acknowledge it and said, “We exert no influence and have no influence over their site other than we lent them money.” Basically, Casper gave these two guys that I think actually knew the owner of Sleepopolis, Casper loaned them money to buy the site. I guess we’ll let people draw their own conclusions on that one, but it’s just interesting how that played out.

NASIR: To me, it just sounds crazy – crazy is the wrong word – I mean, almost brilliant move in the sense that I wonder if Sleepopolis’ owner knew that these guys were affiliated by Casper because, frankly, if you think about it in their shoes, Sleepopolis is in the middle of a lawsuit. We have this negative SEO cross complaint that may or may not have any teeth. Frankly, again, this is kind of untested waters and the level of proof because how do you actually prove it? Some of the tech-savvy people listening, the SEO guys, you know, how do you prove that someone is buying bad links? Because, a lot of times, these black hat techniques and these bad links come from overseas. Tracing that, there’s not really a lot of connections. If you’re using another, if I hire a reputation firm and they hire another group of people or another vendor to do it, how I prove that on paper in front of a judge or jury is tough. And so, Derek’s in this kind of quagmire here and he finds an opportunity to sell – whether he was actively looking or what-have-you and he sells, and the lawsuit is settled. And so, it’s a win-win, it seems like, actually.

MATT: I was going to say exactly that. Let’s assume that all the statements he made were true and he wasn’t doing anything deceptive, you know, looks at the allegations against him, the claims against him, and says, “Those aren’t true. Also, I’m pretty sure this negative SEO was happening. This is all great for me,” but he’s approached by this other company or these guys and, regardless of whether he knew whether they were affiliated with Casper or Casper loaned them money or not, he has to look at that from a practical standpoint and say, “All right, I made some good money off of this. I can get out clean – get out of the lawsuit.” I assume he got out of the lawsuit. Yeah, they did reach a settlement and the suit was dropped. “I can really get out of all this clean, get paid, already made money on it. It’s probably just best if I take this route. It’s going to be easiest for everyone.”

NASIR: Yeah. Again, this is where we don’t know the details, but I wonder if it was actually part of the settlement and the process. It’s hard to tell.

I said it was a win-win. Referencing The Office, I don’t know if it was a win-win because we, the consumers, may not have necessarily won here because, if you go to Sleepopolis.com now, it looks like a very genericized website. It almost seems a little too fair. They’re not directing anything. It’s almost a lack of opinion. It’s like there’s very subtle difference between it.

Sometimes, when it comes to opinions, especially people that are reviewers, when you ask Siskel and Ebert – I think one of them is late, I can’t remember.

MATT: Yeah, definitely – one.

NASIR: I apologize to them and his family, I can’t remember which, but the point is, when you go to them for a review, you’re not looking for this very objective criteria of what’s good and bad. You want opinion. Either you hate it or you love it or some kind of a little more adjectives than that. That’s not what this mattress review site provides anymore.

MATT: Well, I think there are a couple of telling things about the site now. We didn’t even mention this at the beginning but the one mattress he really liked was this brand, Leesa. In the sidebar, there is a couple on there for Leesa with a yellow box. Now, that’s gone, after the sale, after the acquisition. Instead, it’s a box with a coupon for Casper. You tell me. That’s one thing.

The other thing I noticed when I was trying to find the compliant, the owner of Sleepopolis had been documenting this whole legal battle and blogging about it on his site. I found another website that had picked up the story and had linked to the Sleepopolis site. It said, “Oh, here’s the copy where you can get the complaint.” Surprise, surprise! I click on it. Now, it just goes to regular Sleepopolis site. They’ve wiped it clean of all the documentation of this lawsuit that the former owner of Sleepopolis was doing.

It seems pretty clear how this all played out. I’d agree with you, it’s still pretty good but not great win-win-lose – consumers being the loser.

NASIR: I know Casper but I’m still assuming that Derek won somehow.

MATT: Oh, yeah.

NASIR: But I could be wrong because it seems like all these other mattress review sites are owned by mattress companies now, too.

MATT: Yeah.

NASIR: That’s what I’ve heard at least. Again, it seems like a pretty cutthroat industry.

MATT: We assume – and we talked about this earlier – he made a couple of million before we assume he sold it. Casper is probably willing to loan a decent amount of money. He made millions – multimillion dollars – by reviewing mattresses. I would classify that as a win. He was a pretty young guy, too, I think. He still has plenty of time to do other things.

NASIR: I really wish that negative SEO lawsuit would go through. In fact, if anyone has potential negative SEO lawsuit and they have a way to prove the actual acts of the bad links being put up by your competitor, give us a call because we’re definitely interested in that.

MATT: Yeah, it would be interesting to see and just to have a judge listen to that. But then, if that was presented to a jury, I can’t even imagine the glossed over eyes it would see.

Real quick, on the affiliate marketing side of things, what’s the law behind it? We talked a little bit about this. Basically, we mentioned this with the ads with influencers previously. It’s a similar idea. If there is the affiliate relationship, you do have to disclose it. What do you have to disclose? You have to disclose that it exists and there’s different opinions on what’s sufficient and what’s not, and then where does it need to be disclosed. Basically, the bottom line is, the closer the disclosure is to the actual recommendation, the actual affiliated link, affiliated company, the better. You can’t have it on your About Us page and probably not even on your Terms and Conditions or the General Info.

NASIR: With the disclaimers, it should really be on the same page, just to be safe.

MATT: If there’s a couple of paragraphs and then there’s a link – certainly if there’s a link – you can disclose it right there. But, yeah, it’s that clear and conspicuous language that we’ve seen before. You do have to make the disclosure if there’s any form of pay that’s getting pushed across. Just disclosing that it’s an affiliate link is probably not enough because I don’t think, really, the average consumer might not even know what that is.

We talked about this before as well, but this does differ from an ad. Again, we like to give a more clear definition of this. You know how the law works. If it’s clear that something’s on the site, if it’s a paid ad, if it’s clear to the visitor of the site, then you don’t need to make additional disclosures. But, if it’s not clear, then you might need to make those additional disclosures.

Probably the word of advice here is, when in doubt, just make the disclosure.

To me, it wouldn’t really steer the way I felt about something necessarily, unless it was very blatant that it was biased. But, you know, be on the side of caution.

NASIR: I’ve seen this carry out itself in multiple ways and we probably need to revisit, on a case-by-case basis, some of the new guidelines that have come out. But I’ve seen everything from even saying, “Hey, here’s my affiliate link.” Most people know what that means. It’s like, “I get paid a percentage or I get some kind of referral fee if you click on this, so please use this.” Everyone’s familiar – most people, again – with refer-a-friend where you buy something and you refer something and you get $10.00 off, they get $10.00 off or whatever. And so, there’s ways to do it to be very clear and not do it in a way that may annoy your readers or annoy who you’re recommending these products to. Again, it gets very specific. And so, what I would do is, if you have one of these affiliate links or sites and you’re more interested in figuring out how to present it, just give us a call or give an attorney a call in your jurisdiction that’s familiar with these rules and we can talk about it.

MATT: Or your greater wish – get involved in some big negative SEO.

NASIR: I would love it. You know, we really need to look more. I’ve been searching for those kinds of lawsuits, but nothing that’s really caught my attention that’s kind of worthwhile.

I think there’s a lot of ways to combat negative SEO as well. That’s typically the better way to handle it. But I’m sure there’s going to be an instance where it makes sense to financially go after your competitor because of it.

MATT: It’s got to be proving some amount of damage or what the amount of damage is is going to be difficult. I don’t know. We’ll tackle that at another time. This is strictly mattress talk for this episode.

NASIR: Very good.

Well, I think that’s our episode. Thanks for joining us, everyone.

I’m trying to think of a pun related to this. Puns usually just come off the cuff, right?

MATT: Yeah, you can’t force it. I already had the “firm” mattress one, so I think we’re okay. We filled our quota for this episode.

NASIR: Great.

All right, thanks for joining us!

;

Legally Sound | Smart Business

By

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

Get Business Legal Updates

Please provide your full name.
Please provide a valid email address.
We respect your privacy, and we will never share your information. Unsubscribe at any time.
Legally Sound Smart Business cover art

Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
Apple Podcast badge
Google Podcast badge
Spotify Podcast badge

Latest Episodes

July 14, 2021

Through a five-round championship bout, Matt travels to Texas from California to determine which state is better for business. Will it be a knockout with a clear winner or will it go to the scorecards?

June 16, 2021

Covered in this episode of Legally Sound Smart Business are some typical business mistakes blunders small businesses often make and how to avoid them. Blunder #1: Copying and pasting agreements It may sound like a good idea at the time, but this blunder comes with hidden pitfalls. Having an attorney draft terms that are specific…

February 4, 2021

How you terminate an employee can make the difference between a graceful transition to avoidable negative outcomes like a dramatic exit or even a lawsuit. We gathered a panel of experts and asked them – is there a “right way” to fire an employee? We would like to thank our guests for this episode: Amr…

December 2, 2020

The COVID-19 pandemic has turned nearly every aspect of life on its head, and that certainly holds true for the business world. In this episode, Matt and Nasir explain how the early days of the pandemic felt like the Wild West and how the shifting legal playing field left a lot open to interpretation and…

November 16, 2020

After plenty of ups and downs, our buyer has finally closed on the purchase of their business. While we’re marking this down in the ‘wins’ column, it never hurts to review the game tape. In this final episode, our hosts, Matt Staub and Nasir Pasha, return to the deal almost a year later to reflect…

September 15, 2020

The ink is drying on the signature line and things are looking great for our buyer. After so much hard work, the finish line is in sight and the cheering within ear shot.   Though the landlord is still serving friction, things seem safe to move forward and for now, our buyer will be keeping…

July 31, 2020

Though things are coming along well, the journey would not be interesting if it was purely smooth sailing. After our buyer opens escrow, they are forced to push the closing date back when suddenly a letter from an attorney was received claiming the business, we are buying has a trade mark on the name!  Now…

June 12, 2020

With frustration at an all-time high and professionalism at an all-time low, our friend the Buyer has “had it” with the Seller and quite frankly their lack of knowledge. At present our Buyer is rightfully concerned that the latest misstep from our loose-lipped Seller will threaten not only the entire operation of the businesses but…

May 11, 2020

As we go deeper into the buying process, we start to uncover more challenges from our seller and encounter some of the wrenches they are tossing our way. When we last left off in episode three our team was knee deep in due diligence for our buyer, had already penned and signed the Letter of…

April 4, 2020

One word–interloper! When a new mysterious broker enters the transaction and starts to kick up dust, Nasir and Matt take the reins. The seller signed off on the letter of intent (see episode 2), yet this “business broker” serves only friction and challenges by refusing to send financials, whilst demanding more of a firm commitment…

April 4, 2020

Just as most stories and deals start out, everyone is optimistic, idealistic and full of hope for clear skies. It’s a perfect outlook with a perfect setup for the ups and downs yet to come. Peek further behind the curtain and into the first steps of buying a business: the letter of intent. After the…

April 4, 2020

When a savvy buyer hears opportunity knocking to purchase a prime positioned business, she decides not to go it alone and taps in the professionals to help navigate what could potentially be a fruitful acquisition. “Behind the Buy” is a truly rare and exclusive peak into the actual process, dangers, pitfalls and achievements, that can…

August 7, 2019

GrubHub is subject to two “matters of controversy” that have likely become common knowledge to business owners: “fake” orders and unfriendly microsites.

May 28, 2019

In this podcast episode, Matt and Nasir breakdown the legal issues of the subscription industry’s business on the internet. Resources A good 50-state survey for data breach notifications as of July 2018. California Auto-Renewal Law (July 2018) Privacy Policies Law by State Why Users of Ashley Madison May Not Sue for Data Breach [e210] Ultimate…

March 12, 2019

In recording this episode’s topic on the business buying process, Matt’s metaphor, in comparing the process to getting married probably went too far, but they do resemble one another. Listen to the episode for legal advice on buying a business.

December 3, 2018

Nasir and Matt return to discuss the different options available to companies looking to raise funds through general solicitation and crowdfunding. They discuss the rules associated with the various offerings under SEC regulations and state laws, as well as more informal arrangements. The two also discuss the intriguing story about a couple who raised over…

July 24, 2018

Flight Sim Labs, a software add-on creator for flight simulators, stepped into a PR disaster and possibly some substantial legal issues when it allegedly included a Trojan horse of sorts as malware to combat pirating of its $100 Airbus A320 software. The hidden test.exe file triggered anti-virus software for good reason as it was actually…

April 17, 2018

Attorneys Matt Staub and Nasir Pasha examine Mark Zuckerberg’s congressional hearings about the state of Facebook. The two also discuss Cambridge Analytica and the series of events that led to the congressional hearings, the former and current versions of Facebook’s Terms of Service, and how businesses should be handling data privacy. Full Podcast Transcript NASIR:…

March 10, 2018

The Trump presidency has led to a major increase in ICE immigration enforcement. It’s critical for business owners to both comply with and know their rights when it comes to an ICE audit or raid. Nasir, Matt, and Pasha Law attorney Karen McConville discuss how businesses can prepare for potential ICE action and how to…

February 5, 2018

New years always bring new laws. Effective January 1, 2018, California has made general contractors jointly liable for the unpaid wages, fringe benefits, and other benefit payments of a subcontractor. Nasir and Matt discuss who the new law applies to and how this affects all tiers in the general contractor-subcontractor relationship. Click here to learn…

January 2, 2018

With a seemingly endless amount of new mattress options becoming available, it is unsurprising that the market has become increasingly aggressive. As companies invest in more innovative solutions to get in front of customers, review sites, blogs and YouTube videos have moved to the forefront of how customers are deciding on their mattresses and how…

December 7, 2017

In recent months explosive amounts of high profile allegations of sexual harassment, assault, and varying acts of inappropriate behavior have transcended every sector of our professional world. With a deluge from Hollywood and politics, and the private workforce, accusations have inundated our feeds and mass media. This harassment watershed has not only been felt within…

November 16, 2017

If you are not familiar with the EB-5 program started in 1990 to give green cards to certain qualified investors in the United States, then you may not have been alone a few years ago. Currently, the EB-5 program has since exploded since its inception and now hits its quotas consistently each year. The program…

October 10, 2017

Government requests come in multiple forms. They can come in as requests for client information or even in the form of investigating your company or your employees. Requests for Client Information General Rule to Follow Without understanding the nuances of criminal and constitutional law and having to cite Supreme Court cases, any government requests for…

August 24, 2017

Nasir and Matt suit up to talk about everything pertaining to employee dress codes. They discuss the Federal laws that govern many rules for employers, as well as state specific nuances in California and other states. The two also emphasize the difficulty in identifyingreligious expression in dress and appearance, how gender-related dress codes have evolved…

June 28, 2017

Nasir and Matt discuss the life cycle of a negative online review. They talk about how businesses should properly respond, how to determine if the review is defamatory, the options available to seek removal of the review, how to identify anonymous reviewers, whether businesses can require clients to agree not to write negative reviews, and…

June 7, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Mattbreak down social media marketing withguests Tyler Sickmeyer and Kyle Weberof Fidelitas Development. They first discuss contests and promotionsand talk about where social media promotions can go wrong,when businesses are actually running an illegal lottery, and the importance of a soundterms and conditions. Next, they…

April 3, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Matt go in depth with the subscription box business. They discuss where subscription box companies have gone wrong(4:30), the importance of a specifically tailored terms and conditions(6:30), how to structure return policies (11:45), product liability concerns (14:45),the offensive and defensive side of intellectual property (19:00),…

February 1, 2017

Nasir and Matt discuss the suit against Apple that resultedfrom a car crashed caused by the use of FaceTime while driving. They also discuss howforeseeable use of apps can increase liability for companies. Full Podcast Transcript NASIR: Hi and welcome to Legally Sound Smart Business! I’m Nasir Pasha. MATT: And I’m Matt Staub. Two attorneys…

January 5, 2017

The guys kick in the new year by first discussing Cinnabon’s portrayal of Carrie Fisher as Princess Leia soon after her death, as well as other gaffes involving Prince and David Bowie. They alsotalk about right of publicity claims companies could be held liable for based on using someone’s name or likeness for commercial gain.

December 22, 2016

Nasir and Matt discuss the recent incidentat a Victoria’s Secret store where the store manager kicked out all black women after one black woman was caught shoplifting. They then each present dueling steps businesses should take when employees are accused of harassment.

December 8, 2016

Nasir and Matt return to talk about the different types of clients that may have outstanding invoices and how businesses can convert unpaid bills to getting paid.

November 10, 2016

After a long break, Nasir and Matt are back to discuss a Milwaukee frozen custard stand that is now revising it’s English only policy for employees. The guys also discuss how similar policies could be grounds for discrimination and what employers can do to revise their policies.

October 6, 2016

The guys discuss the new California law that allows actors to request the removal of their date of birth and birthdays on their IMDB page and why they think the law won’t last. They also discuss how age discrimination claims arise for business owner.

September 29, 2016

Nasir and Matt discuss the racial discrimination claims surroundingAirbnb and how it’s handled the situation. They also discuss some practical tips for businesses experiencing similar issues.

September 8, 2016

Nasir and Matt discuss whyAmazon seller accounts are getting suspended and banned without notice and how business owners can rectify this situation through a Corrective Action Plan.

August 25, 2016

Nasir and Matt talk about the accusations surroundingfashion giant Zararipping off the designs of independent artists like Tuesday Bassen and howsmaller companies can battle the industry giants.

August 18, 2016

Nasir and Matt discuss Brave Software’s ad replacing technology that has caught the eye of almost every national newspaper and has a potential copyright infringement claim looming. They also welcome digital marketing expert Matt Michaelree to speak on the specifics of what Brave is attempting to do and whether it has the answers moving forward.

July 28, 2016

Nasir and Matt discuss the sexual harassment lawsuit filed by Gretchen Carlson against Fox CEO Roger Ailes. They also talk aboutthe importance of sexual harassment training and properly handling such allegations in the office.

July 15, 2016

Nasir and Matt talk about the changes at Starbucks that have led to many disgruntled employees and customers.

June 23, 2016

Nasir and Matt discuss the criminal charges facing FedExinvolving the alleged transportation of illegal drugs. They also talk about how business owners should address working with customers that may be breaking the law.

June 15, 2016

The guys return after a long break to discuss why Yahoo is auctioning off over 3,000 patents and how this decision will affect the longevity of the company.

May 25, 2016

Nasir and Matt discuss the increase in the salary thresholdfor exempt employees and how employerscan try to avoid paying overtime as a result.

May 18, 2016

Nasir and Matt discuss the Baltimore law that makes it very difficult to operate food trucks in the city. They also discuss all the legal restrictions tohaving a food truck.

May 11, 2016

Matt listens to Nasir recap the developing battle in his hometown of Vandalia, Ohio over whether a Dunkin Donuts can move into a location in close proximity to a local favorite donut shop. They then discusswhether the issue is more legal or personal.

May 9, 2016

The guys kick off the week by discussing a Nevada employee who is claiming she was fired for not supporting the Scientology beliefs of her employer.

April 27, 2016

The guys discuss the massive floods in Houston,how employers responded, and why one meteorologist became a local hero. They also discuss the steps businesses should take in preparing for storms outside the workplace.

April 20, 2016

The guys discuss the boycott of Amazon over the products of an unnamed presidential candidate. They also talkabout how a business should handle a boycott and whether it’s possible to exit one unscathed.

April 13, 2016

Click here to read HubSpot’s response on this topic. Nasir and Matt discuss the trend in startups to compensate programmers and other early employees with stock options and how the company culture at HubSpot isn’t what it seems.

April 6, 2016

Nasir and Matt discuss various lawsuits against social media platforms in which users are accused of artificially inflating their social currency.

We represent businesses.
That’s all we do.

Oh, and we love it.

We love our work. We love reviewing that lease for your new location. We thrive on closing that acquisition that nearly fell through. We’re fulfilled when we structure a business to grow, raise capital, and be legally protected.

We focus on developing close relationships with our clients by being like business partners. A partner who provides essential, personalized, proactive legal support.

We do all of this without utilizing the traditional billable hour model. You pay for the value we bring, not the time spent on calls, emails, and meetings.

Our team is made up of attorneys and staff that share these values and we are retained by clients who want the same.

Pasha Law PC operates in the states of California, Illinois, New York, and Texas.

Meet Our Team

Fractional General Counsel Services

Pasha Law Select offers the expertise of a high-end general counsel legal team for every aspect of your business at a fixed monthly rate. Pasha Law Select is deliberately designed to allow our legal team to be proactive, to anticipate, and to be comprehensive in serving our clients. To be great lawyers, we need to know our clients. We can’t know our clients unless we represent a select number of clients in the long-term. This is Pasha Law Select.

Learn More