Entrepreneur Basics: Legal and Financial Issues in Building a Startup Company Stock and Employment Issues for Startups December 13, 2007 David Frazee Partner 101 Jefferson Drive Menlo Park, California 94025 Telephone: (650) 838-4319 Facsimile: (650) 838-4519 Email: dfrazee@perkinscoie.com
Employment and Compensation Issues Welcome to California! Areas Covered: Wages and Hours Taxes Noncompetes Hiring and Firing, Discrimination, etc. Privacy Stock and Compensation
Wages and Hours Exempt v. non-exempt Overtime PTO and vacation Penalties The Department of Industrial Relations Deferral arrangements
Taxes Consultants, employees, leased personnel Withholding and reporting Liability for officers and directors The IRS and their California friends
Noncompetes Section 16600 What to do Prohibition on non-competes Exceptions Creativity Other states What to do Understand the real issue Focus on your trade secrets and IP
Hiring and Firing The Myth of California Firing "At will" and how to keep it that way When you cannot fire An illegal or retaliatory reason A discriminatory reason Discipline, document, communicate Severance Releases
Discrimination What is discrimination? Sexual harassment When is it illegal? The "prohibited list" Sexual harassment What is it? Does it matter who does it? Preventing discrimination Consistency, communication, documentation Investigating discrimination
Privacy Some things are statutory Most things are not Medical records, e.g. Most things are not What is the reasonable expectation of privacy? Company property The importance of policies
Other Topics Omitted FMLA Pregnancy Disability ADA and reasonable accommodation ERISA Immigration
Stock and Compensation Securities issues Exemptions Finders Fraud Tax issues Fun with capital gains and ordinary income 83(b) hell Fairness issues Vesting issues
Other Matters Not understanding why people become punitive Accepting a B-level team Great people can do it all Failure to fire; hard to do Best individual contributors are not best managers Treating friends differently Not rewarding performers International issues Pretending you are not going to be fired yourself