Click-Throughs and Opt-Outs: Information About Contracting Online
Most of us are familiar with the idea of a contract; we make an agreement with a person to do something, i.e. perform work or buy a car. Sometimes this agreement is sealed with a handshake; other times the agreement is reduced to writing and signed by the parties.
But what about contracts online? When navigating through Web sites, you very rarely meet the person or company you are dealing with and certainly signatures are often not exchanged.
This does not mean, however, that contracts are not formed all the time by your online activities. When signing up for a Web site, very often you will be presented with a big long text box entitled “Licensing Agreement” or “Terms and Conditions. If printed out, it would likely be dozens of pages and yet you are expected to read through all of that before you can buy a Pez dispenser or sign up for a new Web site.
Though most people do not read through these forms, they can, in fact, be legally binding documents. If at the bottom of the form you have to select a box, entitled, for example, “Accept Licensing Agreement” and then click a “Next” button, this is referred to as a click-through.
Under federal and state law, this can be interpreted as the same as a signature on a contract, creating a legally binding agreement. For this reason, it is important to read through the main points of the agreement, particularly if it involves a major transaction.
Another system commonly used online is an “opt-out.” This means that the box for acceptance is already selected and that you have to unclick the button to show you are not agreeing. Some laws do limit when this is method is appropriate.
However, you often see click-throughs when downloading software to install additional add-ons and tools – and potentially spyware or malicious programs – and also when signing up for mailing lists or listservs.
Though the degree to which we now live online makes it easy to be cavalier about our activities and acceptance of these licensing agreements or terms and conditions, construes should be aware. Recent changes with the Facebook Web site, where the popular social networking company attempted to institute changes allowing them to use any photo posted on the Web site, caused a backlash from its users, which required them to change its policies. This would not have happened if some people were not reading the fine print. Of course, these issues are even more important in e-commerce and business to business transactions.
WSJ Law Blog – FCPA Roundup
A few months back, we wrote a post about the Foreign Corrupt Practices Act (FCPA). This Federal law is important for companies operating abroad. The FCPA makes it a criminal offense for a US company or individual to bribe a foreign official any where in the world. This extraterritoriality is relatively rare in US statute.
Now, the Wall Street Journal’s Law Blog has published a post entitled FCPA Roundup: Swiss Bank Accounts, Ferraris and “Foreign Officials. It includes news about FCPA prosecutions involving a Japanese company accused of bribery in Nigeria and a California company accused of bribing Mexican officials with a Ferrari (and other gifts).
FAQs about Ownership of Medical Corporations
Who in California can own a medical corporation?
As specified in the California Business and Professional Code, the following people may be the shareholders, officers, directors, or professional employees of a medical corporation:
- Licensed doctors of podiatric medicine;
- Licensed psychologists;
- Registered nurses;
- Licensed optometrists;
- Licensed marriage and family therapists;
- Licensed clinical social workers;
- Licensed physician assistants;
- Licensed chiropractors;
- Licensed acupuncturists;
- Naturopathic doctors.
The California Medical Board and California Codes state that an unlicensed person cannot own any shares of a medical corporation. At least 51% of the shares must be owned by a licensed physician and surgeon. The remaining 49% can be owned by the individuals specified above.
What is a Medical Practice?
Since no corporation but a Medical or Professional Corporation can run a medical practice, it is important to understand the definition and scope of that under the law. According to the California Business and Professional Code, section 2051, the practice of medicine is defined as the:
“use of drugs or devices in or upon human beings and to sever or penetrate the tissues of human beings and to use any and all methods in the treatment of diseases, injuries, deformities, and other physical and mental conditions.”
This is further supplemented by the various sections of the Business and Professions Code, and other California Laws, which delineate the scope of practice for each of the licensees listed above.
Are there any Federal Restrictions? What is the Stark Law?
What is often called the Stark law is comprised of three separate provisions that regulate physician self-referral to Medicare and Medicaid patients because of the possible conflict of interest. This often limits physicians’ ownership of health care companies, because they cannot refer from their own medical practice.
For example, Physicians may not refer patients to any medical facilities in which they have financial interest including ownership, investment, and a structured compensation arrangement. A physician’s self-referral could possibly encourage over-utilization of services which would increase health care costs. Self-referral could also cause a captive referral system which would limit competition from other providers.
Physicians are also banned from referring patients to immediate family members who include spouses, parents, grandparents, children, grandchildren, brothers, sisters, mothers-in-law, fathers-in-law, brothers-in-law, sisters-in-law, daughters-in-law, sons-in-law, and also adopted and step members of their families. Referring to an immediate family member would also be another conflict of interest. There is no stated regulation in the Stark law against referring to more distant relatives. The physician referring to the distant relative however, still may not have any financial interest or gain from the referral.
What is the History of the Stark Law?
- Stark I- Congress included provisions in the Omnibus Budget Act of 1989 (OBRA 1989) which barred self-referrals for clinical laboratory services under the Medicare program effective January 1, 1992. This provision also included a series of exceptions to the ban in order to accommodate legitimate business arrangements.
- Stark II- (OBRA 1993) expanded restriction to a range of additional health services and applied it to Medicare and Medicaid. This provision also contained some clarifications and modifications to the original law. The Social Security Amendments of 1994 also contained minor technical corrections to these provisions.
- Phase III- The final rule was published on September 5, 2007 and it became effective December 4, 2007. This contains two major changes which are the repeal of the prohibitions based on compensation arrangements and the reduction in the list of services subject to the ban.
Todd Gallinger Teaching Online CLE for CA Bar: “Avoiding Cultural Missteps”
On January 13, 2011 at 11 am PST, Todd Gallinger will present, with other, an online MCLE program for the State Bar of California entitled “Avoiding Cultural Missteps”. California attorneys participating, either live or via later download or stream, will be eligible for credits towards their Elimination of Bias in Legal Profession requirements.
This program will address avoiding cultural missteps when working with clients and lawyers in the Middle East, Asia, including China and India, and Europe. The speakers will address their experiences and describe how cross-cultural differences affect the practice of law and business relationships. Drawing on their experiences in international trade, in a Fortune 500 company, and with Sharia law, the speakers will illustrate some of the cultural differences practitioners may come across when working with international clients, partners, and opposing counsel. From this, participants will learn to recognize some potential cultural pitfalls. Todd Gallinger will talk about his experience working with the Middle East.
The Foreign Corrupt Practices Act, A Survey For US Businesses Doing Business Abroad
In an increasingly interconnected society, business dealings between United States companies and the global economic world have come a long way. But with such advances comes a need to keep oneself in check, and make sure that any and all business transactions are in accordance with the law. Specifically, it is important to familiarize ourselves with the Foreign Corrupt Practices Act of 1977, or “FCPA.”
The FCPA “prohibits US companies and companies whose securities are traded on US stock exchanges from paying or offering anything of value to foreign officials for the purpose of obtaining or retaining business.’ The FCPA applies to a broad scope of people, including the individual, firm, officer, director, employee, agent of the firm, and even any stockholder acting on behalf of the firm. The definition of “foreign official” is expansive as well, as it is not restricted to government representatives, but also includes any employees of foreign departments, agencies, or instrumentalities of the government.
Nontraditional investment ventures have further expanded the influence that foreign officials can exert on United States finances. Opportunities like the Sovereign Wealth Fund can directly involve foreign officials within the United States, thus heightening the potential for bribery to occur. What’s more – given the fact that foreign governments have also made investments in a wide scope of companies and organizations, this widens the sphere of influence that foreign officials hold, in that such companies have then become dubbed as instrumentalities of foreign government, and thus subject to FCPA regulations.
The cost of violating the FCPA is high, as for corporations who conduct bribes, the fine is $2 million, and the fine for individual officers and shareholders is $100,000 with imprisonment for up to five years. With the penalties so high, it is imperative that United States companies act within the bounds of the FCPA and refrain from illegal bribes so as to protect not only themselves, but the integrity and ethics of the global economy.
Two Gallinger Law Pro-Bono Clients Receive Non-Profit Approval
Gallinger Law is pleased to announce that two of its pro-bono clients, the California Latino Psychological Association and Get Inspired!, were approved by the Internal Revenue Service as 501(c)(3) non-profit organizations. This means that these organizations will be tax-exempt and that donors will be able to deduct their contributions to them. Gallinger Law accepted representation of both of these clients as part of our continuing work with the Public Law Center.
The California Latino Psychological Association (CLPA) is dedicated to advocating and serving the mental health needs of the Latino community. CLPA is invested in the clinical, research and academic issues related to Latino Psychology. The CLPA advocates for social justice on issues affecting the mental health of Latino communities; and the quality of education, training and work environments of Latino Psychologists.
Get Inspired! believes that the loss of arts programs in our schools has created a need for curricula that encourage imaginative thinking and that allows students to explore their creative talents.It runs programs designed to inspire creativity while allowing children to discover the world of science.
Gallinger Law Launches VisaInvestor.com
Gallinger Law is proud to announce the launch of VisaInvestor.com,the provider of fully integrated services to international investors and business people looking to relocate to the U.S. Though VisaInvestor.com, Gallinger Law can provide the legal and business support services necessary to make a transition to the US successful. VisaInvestor.com, through affiliates, can also assist clients in locating an appropriate business to purchase and/or placing an investment in a regional service center, if appropriate.
VisaInvestor.com is currently looking for international and U.S.-based affiliates, to team up in providing and marketing services to international investors. If you are a professional with strong connections to international businesses, this is a great opportunity to reach new clients and provide additional services to your existing clients. To take advantage, please contact us.
California State Security Exemptions
In California to be exempt from registering security transactions with the Department of Corporations, which follows the rules set by the SEC Regulation D as well as the California Corporations Code 25102 (f).
There are certain requirements that a company must meet in order to qualify for exemption from registration. First sales of the company’s securities cannot be made to more than 35 persons, including persons not in this state. These purchasers of the securities must also have a preexisting personal or business relationship with an officer, partner, director, manager, or controlling person of your company. If the purchaser does not have a preexisting relationship then they must be reasonably assumed to have the capacity to protect their own interests with the transaction. Second your company cannot advertise or solicit their securities to the public and when bought a individual must be purchasing the security for themselves or a trust as they cannot resell it.
In California, Corporations Code 21502 (n) also offers corporations exemption from registering transactions, however to qualify under this section the corporation must only sell its securities within California. If your company does this then it must meet the same requirements for exemption as seen as in Code 25102 (f) above to be considered for exemption within this code as well.
Security registration requirements are extremely complex, and any company seeking to raise money from investors is urged to seek the advice of qualified legal counsel.
Federal Security Exemptions for Small Businesses
If you have recently created a company you may be required to register with the Securities and Exchange Commission (SEC) if you are going to be selling stock of your company. However, the SEC allows for certain companies to be exempt from registering, provided that they meet the requirement of one of the three following rules of exemption. If the company meets the requirements for one of these rules and wishes to be considered exempt from registering with the SEC, they still must complete the SEC Form D. This form is simply a way for the company to formally claim their exemption from registering and is reviewed by the SEC.
The first rule or Rule 504 as it is technically referred states that registration is not required for companies that sell less than $1,000,000 worth of securities per year. This rule also does not allow for companies to advertise or solicit their securities to the public and for the most part also only allows for the sale of restricted securities, meaning the sale is done privately between affiliate and user. It also means that the buyer of the security may not resell it publicly either. A company can at times sell unrestricted securities if they properly register their offering in the state they wish to sell in (not with the SEC) and follows those specific state requirements.
The second rule or Rule 505 is a bit more stringent in what it takes to be qualified to not register. First a company can only offer and sell up to $5,000,000 worth of securities per year and it can only sell these to accredited investors and up to 35 random people. All information disclosed to accredited investor, must also be disclosed to a non-accredited investor as well under this rule. Again like in the rule before you cannot explicitly advertise and solicit for the sale of securities and they must be only restricted securities. Secondly purchasers of the restricted securities must be informed they need to register their purchases with the SEC and cannot resell them for six months. If your company meets all of these requirements then it can qualify for exemption.
The final and third rule or Rule 505 to that allows for companies that fall under this rule can raise unlimited amounts of money, so long as they meet the requirements of Section 4(2) of the Securities Act. This means the company cannot explicitly advertise and solicit for the sale of securities, may sell an unlimited amount of securities to accredited investors and up to 35 random other people, all information given to accredited investors must also be disclosed to non-accredited investors and purchasers of the companies restricted securities must register them and not resell them within one year.
Business owners thinking about raising money should contact a qualified attorney in their jurisdiction. In addition to federal regulations, they likely must be concerned with state level “blue sky” regulations as well. An post about California’s security regulations exemptions for small business will be forthcoming next week.
Employee Handbook: What It Should Contain
As a written set of rules and expectations and a detailed account of a company’s policies and procedures, an employee handbook is a necessary communicative tool between the employer and employees. A well-written employee handbook is the key ingredient for a healthy business, and should be clear and consistent.
Although there is no fixed format, most employee handbooks generally include similar company policies such as employment, standards of conduct, wage and salary, benefits and services, and federal acts. Welcoming statements, oriental procedures, disclaimers, forms of acknowledgment, and definitions are also incorporated into the handbooks as well.
Common employment policies outlined in employee handbooks are:
o Non-discrimination/ Non-disclosure/confidentiality
o Office hours/lunch/break periods
o Personnel files/data changes
o Performance review
o Employment termination (This includes the “at-will” provision, in which the employer has the right to terminate an employee at any time, and an employee has the right to quit at any time)
o Safety/health related issues/employees requiring medical attention
o Supplies; Expenditures; Obligating the company
o Expense reimbursement
o Visitors in the Workplace
o Immigration Law Compliance
Standards of conduct policies detailed in handbooks generally include:
o Attendance
o Absence without notice
o Harassment, including sexual harassment
o Use of company property—telephone, email, internet etc
o Substance abuse
o Smoking/tobacco products
Wage and salary policies:
o Promotions
o Timekeeping
o Overtime
o Payday
Benefits and Services:
o Insurance
o COBRA
o Social Security/Medicare
o Vacation/Holidays
o Jury Duty/Military Leave
o Family/Maternity/Sick leave
o Training and Professional development
Note that these policies are just general suggestions, and that each company has the freedom to draft its own handbook according to its own unique policies and procedures.
A well-drafted employee handbook is able to explain these policies concisely and clearly, as length is not always an indication of quality. The purpose of the employee handbook is to inform employers and employees of the company’s expectations, therefore the manual should be comprehensible.
