If you don”™t retain a laywer, how do you know what you don”™t know?
The analogy is just too obvious. Imagine, knowing what you now know, advising a student to begin their yoga journey without the assistance of a teacher. And yet, there appears to be a basic reluctance among entrepreneurs to hiring professional advisors, at least at the early stages of their yoga business. However, any successful entrepreneur knows that assembling a business team, consisting of at least an experienced business lawyer and an accountant, from day one (and maybe even before day one) is essential. Why? Simply because (i) you just don”™t know what you don”™t know, (ii) what you don”™t know can kill you, as they say, and (iii) what you don”™t know, a professional generally does.
Here are just a few things regarding your yoga business that you might not know, but that I can assure you a good lawyer does:
1) Personal Liability.
Unless you take certain legal steps, such as forming a corporation or limited liability company to own and operate your business, you will be personally liable for all of the debts and obligations of your yoga business. This means that a creditor, if successful in his or her claim against you (and this includes a student who might be injured in your class or at your studio) can, in a worst case, force you to sell some of your personal assets to make payment of the amount of his or her claim.
2) Your Tradename.
The fact that someone has failed to register their tradename with the United States Patent and Trademark Office does not mean that they do not own that tradename, or that you can use it. If you are using a tradename that someone else is already using, whether or not registered, generally that someone will own that tradename and can stop you from using it.
3) Your Domain Name.
Furthermore, the fact that you might be able to secure a domain name does not mean that you have the automatic right to use it. If your domain name contains the trademark of another person, that person may be able to claim ownership rights to your domain name and force you to select a new one, notwithstanding that you have spent significant time, energy and money promoting your business and that particular domain name.
4) Waiver and Release Forms.
If your student waiver and release form does not contain certain legally required language and/or is not set forth in a certain format, it might not be enforceable. In such a case, a student injured in your class or at your studio may have the right to sue you for damages suffered as a result of such injury.
5) Independent Contractors.
The mere fact that you might call someone an ”˜independent contractor”™ does not an independent contractor make. Rather, there is a long list of considerations that go into the classification of a worker as an employee or contractor, such as where the worker performs the services and who controls the actual outcome or results of the services being performed. Failure to properly classify a worker can have serious legal and tax-related consequences.
6) Non-Compete Agreements.
Non-compete agreements are generally unenforceable, even if in writing. This means that under some circumstances one of your employees may be able to open up a studio next door and openly compete with you.
7) Customer Lists and Other Trade Secrets.
An employee may be legally entitled to use your student lists and other business-related information for their personal gain. However, if you employ certain steps to maintain the secrecy of such information, such information may be subject to legal protection and, in such event, any attempt by an employee to use such information for their own advantage may possibly be legally enjoined.
8) Sexual Harassment.
An employer may be liable in a sexual harassment situation if, for example, the employer is aware of harassment by one of its employees of another employee or student and fails to take appropriate action to correct the situation. However, a legally compliant, written sexual harassment policy for all employees is the first line of defense, and often an effective one, against a sexual harassment claim by an employee or student.
9) Employee Matters.
The existence of a well-written employee manual, consistent with governing labor law, is critical to defending a lawsuit by an employee in many situations and may even go so far as to preclude any such lawsuit. For example, a clearly written statement in an employee manual that the employment relationship is ”˜at-will”™ is good evidence that an employee has no contractual right to continued employment and accordingly, can be legally terminated at any time.
Many lawyers have been known to refuse to take on a case for wrongful termination in light of any such statement in a manual, provided, of course, that the manual is legally compliant and the employee has acknowledged receipt and review of such manual.
An experienced business lawyer will be able to assist you with each of the matters mentioned above and innumerable others that will arise as your business matures. Your attorney, as your teacher, is there to both anticipate problems and provide answers. If cost is an issue, consider such cost against the attendant risk and the accompanying sleepless nights. In my experience, it is significantly less expensive to set up your business properly and consult with your attorney regularly than to find yourself in litigation. u
The information presented in this article is intended as an overview. Readers should always consult with legal counsel regarding their particular legal issues.