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Innovative Legal Strategies

Howard County MD Business Law Blog

Sony loses motion to dismiss lawsuit over employee data breach

On June 15, a federal judge refused to agree to a request by Sony Pictures Entertainment Inc. to dismiss a lawsuit that some of its former employees had filed over a computer hack related to the release of "The Interview" in 2014. Maryland moviegoers and entertainment buffs probably remember the comedy being released in November after a huge controversy involving North Korea.

In "The Interview," Seth Rogen plays the part of an ordinary-guy-turned-spy whom the CIA sends to North Korea, along with his friend, to assassinate Kim Jong Un. The country was unhappy with the film, and U.S. officials blamed its hackers for the cyber attack on Sony because of the anger that was stirred. The hack made Sony initially cancel releasing the film because it destroyed company data and exposed Hollywood secrets.

Prioritizing talent recruitment

Investing in the right employees is crucial for the success of any business in Maryland. When a company hires the wrong employees, the results can be wasted time, money and resources. On the other hand, the acquisition of skilled employees can help a company to operate smoothly and realize its goals for future growth.

Because recruiting the right talent is so important, the chief executive officer of a company should also take on the role of chief human resources officer in order to decide what new business projects to invest in as well as how to recruit the top talent to see those projects through. Instead of viewing hiring as an administrative duty, hiring should be seen as a key business strategy.

Analysis methods for writing an organized business plan

Many prospective Maryland entrepreneurs take a rather haphazard approach to writing their business plans, often to their detriment. Using analysis tools can help business owners write better plans that are more likely able to provide a blueprint for the company to be successful.

The three types of analysis that should be used are represented by the acronyms PEST, SWOT and 7S. PEST stands for political factors, economic factors, social factors and technological factors. To further break down the analysis for each of these categories, business owners should address the five Ws, or who, what, where, when and why, for each. PEST is a macro-level analysis examining the overall landscape in which the business will be operating.

Continuity planning for Maryland businesses

Many Maryland entrepreneurs prepare an initial business plan when they are launching a new enterprise. In order to help them stay on track and to be and remain successful, it is important for them to regularly revisit their forecasts. They should also complete a continuity plan which goes beyond planning for emergency preparedness and IT recovery, but rather addresses how emergency situations will be handled in more detail.

A good continuity plan should address how well the company will be able to operate during an emergency as well as how it will recover from one. Business owners should have procedures in place and provide training to employees about how they can respond in the event an emergency happens. They should make certain that all data is regularly backed up and stored at an off-site location.

Forming a limited liability company

Some entrepreneurs in Maryland can benefit from structuring their businesses as limited liability companies. A limited liability company is a hybrid between a partnership and a corporation because it provides tax efficiencies for its owners without functioning as a separate entity. Owners of LLCs can be individuals, groups of two or more people or other businesses.

When a corporation is created, the corporation is taxed as an entity that is separate from its owners. On the other hand, profits and losses of a limited liability company are passed through to its owners who report them to the IRS on their personal federal tax returns. Because an LLC is not considered a separate taxable entity, LLCs are classified as corporations, partnerships or sole proprietorships on tax forms.

HP sued by MicroTech over software transactions

Maryland investors may have heard about a legal dispute that has developed between Hewlett-Packard and Autonomy. HP acquired the British software company in 2011 for approximately $11 billion, but the value of the company has subsequently been written down amid allegations of impropriety. HP filed a $5 billion lawsuit against Autonomy in the British High Court in April 2015. The lawsuit claims that the Autonomy's founders misrepresented transactions in order to make the company appear more profitable.

The legal dispute escalated on May 18 when MicroTech filed a breach of contract lawsuit against HP in California, seeking damages of $16.5 million. The company claims that it paid Autonomy $11 million in 2010 and $7 million in 2011 but never received the software keys necessary to complete the transactions with their end users. An attorney representing the Virginia-based company said that MicroTech wants HP Autonomy to either provide the software as agreed or refund the money.

Conducting annual business planning in Maryland

Many entrepreneurs only take the time to draft a business plan when they are preparing to start their company or seek funding. Going through the process of business planning on an annual basis may actually be a better idea, however.

Conducting annual business planning can help business owners to better identify problems and future threats to their business, helping the owners develop strategies for correcting them before they can cause damage. In doing the business planning, people should engage in an analysis of the business's strengths, weaknesses, potential opportunities and potential threats, then writing goals and estimating costs.

Damages available after a breach of contract in Maryland

When one party fails to live up to the terms of a contract, that party is said to have breached the contract. When a contract is breached, the non-breaching party has several remedies at its disposal. One option is to cancel the contract and another is to ask for restitution. If the contract is cancelled, neither party has any further obligation to the other. If the non-breaching party decides to seek restitution, the breaching party would have to pay to put the other party back to the position it was in prior to the breach.

There are several different types of damages that may be awarded to the non-breaching party. For instance, nominal damages are awarded when breach occurs but there is no evidence that a monetary loss occurred. Compensatory and liquidated damages aim to put the non-breaching party in roughly the same position that they were in before the breach occurred. In the event of a severe breach, punitive damages may be awarded on top of any other damages sought in court.

Workers prioritize jobs over filing sexual harassment suits

Despite discrimination laws prohibiting workplace sexual harassment, it remains a widespread problem in Maryland and across the country. The employment and education vice president at the National Women's Law Center testified in January to the Equal Employment Opportunity Commission that a majority of such cases are never reported because the victims are more worried about possible retaliation or losing their jobs if they file complaints.

One out of every four female workers is a sexual harassment victim, and the problem is pervasive in a range of jobs, o ften within male-dominated industries. One workplace discrimination attorney says that many employees are afraid of reprisal if they complain, such as whether they could find another job, particularly if their jobs are in certain industries.

Dealing with workplace harassment and discrimination

Maryland employers that are designing policies around harassment and discrimination may wish to inform employees about the best way to report such behavior. For example, employees should know that it is crucial to document any harassment or discrimination in as much detail as possible. This may include gathering material such as emails and voicemail. Individuals should be encouraged to turn over all the evidence they have despite discomfort about bringing witnesses into the case.

Although gathering evidence to back the claims is important, individuals should not delay reporting the harassment. Doing so might appear to minimize the incidents. Furthermore, witnesses may leave the company and records may disappear as email is deleted off the server.