By Kim Kennedy

Does your business use interns? Are you thinking of hiring an intern or two in the near future? The economy is still struggling, and hiring more employees is a significant expense in payroll costs, as well as in other costs such as health insurance, and training. There are hordes of unemployed recent college graduates who have found the job market unfriendly, and are willing to spend time interning in order to bulk up their resumes. Although internships are typically unpaid, interns gain valuable skills and experience, which will make them more competitive candidates when they enter the job market again.

Sounds good, right?  Well, maybe. Firstly, remember that unless you are a non-profit, your intern is not a volunteer. If you run a for-profit business (even if you are not profitable), you may not utilize the services of volunteers under the Fair Labor Standards Act (“FLSA”).  So what is the difference between a volunteer and an intern, or an employee?

The FLSA states that to “employ” means to “suffer or permit to work.”  However, the Supreme Court in Walling v. Portland Terminal  Co., 330 U.S. 148, 152 (1947), observed that this definition “was obviously not intended to stamp all persons as employees who, without any express or implied compensation agreement, might work for their own advantage on the premises of another.” Based on Portland Terminal, the Wage and Hour Division (“WHD”) has developed six factors to evaluate whether a trainee, intern, extern, apprentice, graduate assistant, or similar individual is to be considered an employee.

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. The internship experience is for the benefit of the intern;
3. The intern does not displace regular employees, but works under close supervision of existing staff;
4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If any of these criteria do not apply, the individual is considered an employee, not an intern. The fourth factor states plainly, “The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded.” Maybe that intern does not sound like such a good deal anymore!

The worst result for your business would be if an “intern” who did not meet these criteria sued you for violations of wage and hour laws. Last fall, two unpaid interns who worked on the movie Black Swan filed a complaint against Fox Searchlight Pictures. The suit is awaiting a hearing at a federal court in New York. Two weeks ago, a former intern filed suit against Hearst Corp., Harper Bazaar’s parent company, for failing to pay minimum and overtime wages during her internship with that magazine. Her counsel has indicated that they intend to turn the case into a class-action lawsuit, representing other unpaid interns form Hearst Corp.’s many magazines.

In California, penalties for not paying someone can be ruinous – up to thirty days’ pay for each paycheck that should have been paid. If you usually pay twice a month, that effectively triples the amount the intern would have earned. There are also penalties for back payment of state and federal taxes, as well.

Make sure your relationships with employees, interns, independent contractors, and whoever else is involved with your business are well-defined to avoid this type of liability in the future.

Kim Kennedy is a paralegal with Bay Oak Law.

Just as your body needs annual wellness checkups, your business does, too. Much of the simple matters can be done by your office, without an lawyer – but if issues turn up, it may be time to check with counsel.

Corporate Status

❏ Corporate Status. Is your business in good standing with the state? In California, corporations, limited liability companies (LLCs) and limited liability partnerships (LLPs) should check here to verify that the business is in good standing. Make sure you choose the proper entity.
Why you should care: a corporation, LLC, or LLP not in good standing in the State of California cannot bring suit or defend itself in court, according to Cal. Corp. Code § 2205 and Cal. Rev. & Tax. Code § 23301. If your business is not in good standing, even if you never get sued or sue anyone, interest and penalties are mounting up. If the business is suspended, the time to fix it is now.
❏ Statements of Information must be filed by most corporations annually, according to California Corporations Code § 1502. Previously, the state sent the form; now, it only sends a postcard.
Why you should care: The lack of a form mailed to the business can lead some businesses to forget to make the annual statement – a costly mistake, as filing it late results in a $250 penalty – ten times the cost of the form. The good news is that the form is now online, and even simpler to fill out than before; the filing fee can be paid by credit card. Put an annual reminder in your calendar system for the beginning of the month before the business incorporated – if the corporation incorporated in June, select May 1st.

Employees

❏ Wage Protection Act. When you hire new employees that are subject to the overtime rules, California now requires that employers give the new employees forms. Read here for more important information.
Why you should care: Eventually, there will be penalties associated with the failure to provide these documents to employees.
❏ Independent Contractors. Are the independent contractors the firm uses actually independent contractors, or are they employees?
Why you should care: there are new penalties for intentionally misclassifying independent contractors. Even without such penalties, paying back taxes for someone you thought was an independent contractor can devastate the business.

Employee Handbook

❏ Check your employee handbook. Does it cover important issues like:

❏ At-will employment?
❏ Getting an acknowledgment from the employee that your business handles confidential information for both itself and its customers, and the employee needs to protect that information both during and after employment with the company?
❏ Specifying that the information created by the employee belongs to the employer as part of a work-for-hire agreement, and the employee is not entitled to use that information after the employment ends?
❏ An ethics policy about dealing with customers and suppliers, that does not create conflicts of interest for your business or the employee?
❏ A policy on inspecting offices, lockers and common areas of the business for contraband?
❏ Payday and timekeeping requirements?
❏ Leave procedures, including sick leave, pregnancy leave, leaving to care for a family member, and military reserve leave?
❏ Allowable time off, such as jury duty, visiting children’s schools, and the like?
❏ Job evaluation procedures?
❏ An illness and injury prevention program?
❏ Appearance policies, including casual Fridays (if offered)?
❏ Harassment investigation procedures?
❏ Internet, email and telephone use procedures – including personal usage and ownership of email accounts, web pages, Twitter, Facebook, and other social media accounts [ http://www.bayoaklaw.com/who-gives-a-tweet-about-who-owns-a-tweet/ ]?
❏ Job termination procedures?

Why you should care: a good employee handbook protects the business by specifying procedures in advance. It reduces uncertainty and the potential for trouble down the line.

Insurance

❏ Make sure your insurance is up-to-date, including:

❏ Worker’s Compensation Insurance (required for all employees);
❏ Disability Insurance for officers not covered by worker’s compensation, and which can be broader in coverage than worker’s compensation;
❏ Health Insurance, with the great changes to the health care system occurring during the next few years, it may be a good time to shop around for a better policy;
❏ Life Insurance for Owners, so that should an owner die, his or her estate can be paid the value of the ownership interest without destroying the company’s future;
❏ General Business Liability Insurance – make sure that all locations are covered, as well as all assets in question. Is there enough coverage? Is there too much coverage? When a firm reduces size, sometimes it forgets to inform the insurer, and they end up paying for what the firm doesn’t need.
Why you should care: While many people pay lip service to insurance issues, there is an aspect of “out of sight, out of mind” to worrying about the issues insurance is designed to cover. Few can afford to over-insure these days, but under-insuring can be disastrous.

Contracts

❏ Sales Contracts. Make sure the following is in your customer contracts:

❏ Attorneys’ Fees: It is far more likely that a customer will breach their contract with you, than you fail to do the work – and if you fail to do jobs for clients, you are not going to be in business for very long, anyway. Thus, every contract or invoice that you provide your customers should have an attorneys’ fees clause, so that if the contract has to be enforced, the prevailing party will receive reasonable attorneys’ fees and costs.
❏ Jurisdiction. The contract is to be interpreted according to the law of your jurisdiction. You know, for better or for worse, your jurisdiction’s laws – you don’t always know the other jurisdiction’s laws.
❏ Integrated. The contract is “integrated” – meaning that the written contract is the complete contract. This prevents alleged oral modifications like “she said that we don’t have to pay until . . . “ from easily being incorporated into the contract (good attorneys might know how to get them in).

Assets

❏ Inventory. Has the business inventoried its physical assets? This is especially important for assets that can easily “walk away” like cell phones and laptops. All such assets should be marked with the name of your business and a landline telephone number. Programs are available to track mobile devices by GPS or other means. An inventory should be kept for insurance and tax purposes. Track, at the least, the model of the inventory, purchase date and purchase value.

Why you should care: Cell phones and laptops have confidential business information, and those who lose them are often afraid to mention it. Marking these devices improves the chance they are returned. Keeping an inventory in a safe place can be good for insurance purposes.

❏ Marking Physical Assets. All substantial physical assets – especially those that can easily walk away –should be marked with a non-removable tag with the business name and phone number. Two places among many to buy such tags is here or here. (Bay Oak Law doesn’t endorse or vouch for these companies; their presence is illustrative).

❏ Marking Intangible Assets. It is easy to understand the importance of marking physical assets like computers, but it is also vital to mark as “Confidential” intangible assets like company information. Every balance sheet, every accounts receivable list, every customer list – every document that, if it falls into the hands of your competitors, could hurt or destroy your business, should be marked as “Confidential.” It is easy to add titles and footers to the firm’s regular forms that are regularly used, so that they get copied into future documents. Send a company-wide email quarterly, reminding everyone of the importance of keeping such information secret.

❏ Software. Does the business have licenses to use all of the software on all the computers in the office? Do you have the registration numbers for all the licenses in a safe place, so that should your office burn down, you do not have to buy more software?

Why you should care: If licenses are missing, it is cheaper to handle this now than after a software developer contacts you and demands thousands of dollars.

❏ Trademarks. On a rainy day when people are sitting around, go through your promotional materials, brochures, website, business cards and the like. Have you registered trademarks for your business name, all your logos, slogans and the like? A typical trademark registration costs less than $2500 – should anything have a trademark registration? Even if you decide not to, run a search on an internet search engine using any word mark that you are using – make sure that your firm is not infringing someone else’s mark – and make sure someone isn’t infringing yours. For each trademark, use the proper marking: “®” for registered marks, and “™” for unregistered marks. Tivo has a good webpage on how to use trademarks properly (hint: you can never “tivo” “Desperate Housewives” – or anything else.)

❏ Copyright. If you produce copyrighted works like books, films, video games or the like, you need to register your copyright. It is easy to do, and takes only a few minutes. Even if you do not, every brochure, white paper, or website you have should have “© 2012, [Name of Company]” on it. While the owner of a copyrighted work has rights as soon as it is published, it doesn’t hurt to remind people of that. Also, make sure that you always have the right to use the works of others on your works, like photographs.

It depends.

By:  Andrew K Jacobson

You’re a business owner, not a Kardashian. You’ve never tweeted in your life, even if that is all your teenager does. But now the resident young wise@$$ in your office has started tweeting about your business – and shockingly (to you), new clients are contacting you because of it. You don’t care – you’re just happy that the goofball is finally productive. But you may lose your good luck if your business doesn’t protect it.

The New York Times reports that this is just what is happening in the Northern California District Court, as a company seeks to recover the 17,000 followers of a twitter account originally called “@phonedog_noah.” PhoneDog “ is a highly interactive mobile news and reviews resource that attracts a community of more than 2.5 million unique visitors each month. . . . [I]t offers up serious editorial content and video reviews that users rely on to make important decisions about their next mobile purchases.” The South Carolina company features up-to-the-minute news about almost all mobile platforms in the US. PhoneDog hired current Oakland resident Noah Kravitz to be a freelancer in the mobile industry; he soon began appearing on behalf of PhoneDog in various media outlets discussing mobile phones, and operated a free Twitter account called “@PhoneDog_Noah.” The Twitter account soon had 17,000 followers. Kravitz left in October 2010, and soon demanded back pay and a percentage of PhoneDog’s revenue. He renamed the Twitter account “@noahkravitz” and excluded PhoneDog from possession of the account.

[Phone]Dog Bites Man. PhoneDog has attacked with a federal court complaint, claiming that Kravitz took PhoneDog’s secrets – apparently, the Twitter followers – and interfered with PhoneDog’s prospective economic advantage. PhoneDog alleges that there “are many details of PhoneDog’s relationships with . . . its Twitter followers . . . that are not generally known or readily accessible to the public or PhoneDog’s competitors.” (First Amended Complaint, ¶ 13). Kravitz has yet to present his side of the story in court, but one likely avenue of attack regarding the Twitter followers is that they are publicly known; as of the writing of this sentence, 24,382 people follow “@noahkravitz,” along with 969 lists.

If the identity of the followers is not a secret, can PhoneDog lay claim to the list itself, when the “list” is in the possession of Twitter and viewable by anyone? The simplest way of resolving this question is by including in the employee handbook a clear statement that all media created during the employment belongs to the employer – and that includes information like lists, followers, statements, videos, and any other media presentation. The First Amended Complaint, above, does not allege any such statement. PhoneDog can still allege that Kravitz “converted,” i.e., stole, the followers, because they were enticed to follow “@PhoneDog_Noah” with content that PhoneDog paid Kravitz to create, and such intellectual property is a work-for-hire that belongs to the company that paid for it.

How Much Are You Worth, Tweetee? PhoneDog’s complaint (¶ 19) values each Twitter follower at $2.50 a month – for 17,000 followers, that means they are worth $42,500 a month, more than $500,000 a year. PhoneDog cites “industry standards” for the valuation, but does not provide any further details of the value of the followers of a free service. A critical look at how to value social media can be found here. The media revolution of the last 20 years will continue well into the future, and new issues will arise that few will think about in advance. Small businesses can save themselves huge expenses in protecting their media outlets by updating their employee manuals so that it is clear from the outset of employment that these new media channels belong to the employer, not to the employee.

The litigation is still only in the earliest pleading stage, but PhoneDog must realize by now that by not closing the door (with explicit statements in a contract or in its employee manual), PhoneDog cost itself a lot of money. This case is likely one hound that won’t hunt.

by: Laura Koch

California has entered the new year with a new class of corporation—the ‟Benefit Corporation,” or ‟B Corporation.” Governor Brown signed AB361 in October 2011, making California the seventh state to allow corporations to elect an organizational structure that benefits both society and shareholders.

B Corporations are required to pursue the creation of positive impacts and simultaneously meet higher standards of accountability and transparency. Several corporations, including Patagonia, maker of outdoor gear, have already registered as B Corporations in California since the law went into effect on January 1.

Proponents claim that the new corporate structure creates critical changes in two areas. First, traditional corporations are required to operate in a way that maximizes profits for shareholders above all else, which discourages socially responsible decision making. In contrast, B Corporations are required to consider the impacts of their operational decisions on employees, the community, and the environment. Electing B Corporation status allows a company to operate in a socially responsible way, even if doing so is less profitable.

Second, the transparency required of B Corporations helps the public and investors to differentiate between companies with good social practices and those with slick marketing. California B Corporations must undergo yearly assessments using a third-party standard and publish an annual benefit report. The report, which is to be readily available on the company’s website, must describe its efforts to benefit the public and the extent of its success.

B Corporation status allows a company to stand out from those claiming an unsubstantiated commitment to increasing the public good. This is increasingly important to consumers, as well as a growing number of investors who are seeking socially responsible companies for their portfolios. B Lab, a nonprofit organization dedicated to using the power of business to solve social and environmental problems, has certified over 500 B Corporations nationwide. The fact that California, the state with the nation’s largest economy, now allows corporations to elect B Corporation as a legal status is a great way to start 2012.

If you are interested in setting up a new Benefit Corporation or converting an existing entity, contact Bay Oak Law.

by Andrew K Jacobson

Once again, the turn of the new year brings new laws into existence. The newspapers focus on cross-cultural clashes like the banning of new sources of shark fins or partial bans on checking job applicants’ and workers’ credit reports. California has also created new penalties if a company willfully misclassifies someone as an independent contractor. However, a new California law called the “Wage Theft Protection Act of 2011″ requires that employers give most new employees a form at the beginning of employment. The laudable intent is to give valuable transparency to employees about their wages and about worker’s compensation. However, the form released by the Labor Commissioner has a provision that is not required by the Labor Code and could lay the groundwork for lawsuits attacking at-will employment.

The Wage Theft Protection Act of 2011 is modeled after a similar bill in New York State. Governor Jerry Brown signed the bill into law on October 9, 2011, and it became effective on January 1, 2012. New California Labor Code § 2810.5 requires a non-governmental employer to provide a form to every new employee subject to the overtime rules, in the language commonly used at work, with the following information:
1. Rates of pay (whether by hour, shift, day, week, etc.), including overtime rates;
2. Any allowances claimed as part of the minimum wage;
3. The employer’s regular designated payday;
4. The employer’s name (including dba’s);
5. The employer’s physical address for the main office or principal place of business, including any mailing address;
6. The employer’s telephone number; and
7. Information about the employer’s worker’s compensation insurance carrier.
The Legislature directed the Labor Commissioner to “prepare a template that complies” with the above requirements, and the Labor Commissioner did so. However, the form includes a provision that the Legislature did not require, requesting that the employer identify the “agreement” as being written or oral.

At-Will Employment. Few employees subject to the overtime rules have written contracts – but that does not mean that their agreements are “oral.” Rather, the employment is “at-will” – either the employer or the employee can end the employment without notice or cause; see Cal. Lab. Code § 2922: ”An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.”

The trouble with marking the box for an “oral” agreement is that then there is the question of what the terms of the oral agreement are – and those terms could include no termination unless for good cause. See, e.g., Foley v Interactive Data Corp., 47 Cal. 3d 654, 677 (1988): “Labor Code section 2922 establishes a presumption of at-will employment if the parties have made no express oral or written agreement specifying the length of employment or the grounds for termination. This presumption may, however, be overcome by evidence that. . . the parties agreed that the employer’s power to terminate would be limited in some way, e.g., by a requirement that termination be based only on ‘good cause.’”

The possibility of oral limits on at-will employment eviscerates employers’ diligent attempts to keep employment at-will. At the very least, the employer is opening itself to the threat of litigation in the event of a termination that requires an expensive severance; the employer could also end up on the losing end of a lawsuit.

The Legislature did not require this information, and it is unclear why the Labor Commissioner added it. The form needs to be modified to make it clear that the employment is at-will – not oral, not written. The “Wage Theft Protection Act” should not be allowed to be used to destroy the presumption of “at-will”" employment; otherwise, a better title would be the “Wage Theft Guarantee Act.”

By: Andrew K Jacobson

One of the things that good lawyers do is plan for future possibilities – even when the client, a psychic and astrologer, can (supposedly) see the future. My mentor, Dan Minutillo, repeatedly drilled into me the need to “double-think” – to ask the “what if” questions, even if the client assures us that everything will be hunky-dory forever.

Walter Mercado “was” a psychic and astrologer in Puerto Rico. (Don’t worry; Mercado is still around; see the last paragraph for why the past tense is used.)

On August 4, 1995, Mercado and Bart [Enterprises] signed the Agreement, under which Bart would develop and distribute materials and products related to Mercado’s psychic and astrological services. As part of the Agreement, Mercado granted Bart several rights “during the Term and throughout the Territory” of the Agreement. The Agreement defines “Territory” as the universe. . . . . It defines “Term” to mean “in perpetuity,” subject to a termination provision which, inter alia, allows Mercado to terminate the Agreement after fifteen days’ written notice if Bart fails to pay Mercado any agreed compensation within sixty days of the due date.

Mercado-Salinas v. Bart Enters. Int’l Ltd., (1st Cir. 12/20/2011,  free subscription required).

Mercado gave Bart an irrevocable assignment in copyrights to certain preexisting materials, and to develop new materials using Mercado’s name. Mercado also irrevocably assigned all rights to the common law trademark “Walter Mercado” to Bart – meaning someone else permanently took over – the rights to his name. For all this, Mercado received $25,000 a month in base salary, along with $5,000 a month in clothing allowance, and $2,000 a month for up to 25 three-minute segments per month.

“Finally, the Agreement provides that ‘all grants granted or assigned by this agreement shall be irrevocable under all or any circumstances, and shall not be subject to rescission, termination or injunction. In the case of breach of this agreement by Bart, Mercado’s sole remedy shall be limited to an action at law for damages.’”

Id.

Mercado even helped Bart register the “Walter Mercado” trademark by filing affidavits authorizing Bart to use and register the trademarks, both in the United States and in Mexico.

All went well for the first decade of the agreement, but beginning in 2006, Mercado stopped providing new material or appearing at scheduled appearances. In turn, Bart stopped compensating him. Despite the irrevocability of his agreement with Bart, Mercado tried to terminate the agreement, and the courthouse fight soon commenced, both in Florida, and later in Puerto Rico. Mercado was enjoined from using the “Walter Mercado” trademark, id. at 279, and could not terminate the agreement, because his own breach caused Bart to withhold payment. The 1st Circuit Court of Appeal upheld the injunction, finding that by failing to meet his own contractual obligations, Mercado was barred from asserting that Bart breached the Agreement between them: a “party’s breach effectively suspends the nonbreaching party’s duty to tender performance.”

Where Mercado’s psychic powers and his counsel failed him is in not recognizing that in the future he might not want to be obligated under the Agreement anymore, and he might want to control his own identity. While the $25,000 a month stipend (and $5,000 clothing allowance!) was no doubt tempting, surrendering control over your name as a trademark to someone else is ripe for disaster. Some more doublethinking should have been done.

The amazing Mercado managed to bounce back quickly. A mere six days after the district court enjoined him from using his name, he transformed into Shanti Ananda. Betcha saw that one coming.

By Laura Koch

Three years after granting review, the California Supreme Court finally held oral arguments last week in Brinker Restaurant Corp. v. Superior Court. I attended the oral arguments in San Francisco because of the importance of this decision to small business owners like our clients. Two important issues that have been awaiting resolution are whether under California law there is a duty to enforce the taking of meal breaks, and how breaks must be timed.

Fired for Working Through Lunch?

Eight years ago, employees of Brinker Restaurant Corporation, which operates Chili’s restaurants, sued the company for depriving them of required meal and rest breaks.
The main issue in Brinker is the interpretation of California Labor Code § 512, which requires an employer to provide a 30-minute meal break for a work period of more than five hours.

The employees, challenging a holding by the Fourth District Court of Appeal, take the position that the term ‟provide” imposes an affirmative duty on employers to ensure that employees take meal periods. During oral arguments on November 8, 2011, the plaintiffs’ attorney acknowledged under grilling by the justices that under the plaintiffs’ interpretation, an employee could be subject to an employer’s progressive discipline policy for not taking a required break. The plaintiffs’ attorney equated this situation with unauthorized overtime, where the employee gets paid but is also subject to discipline.

Several justices appeared dissatisfied, questioning whether the plaintiffs’ interpretation is the most protective of workers. Justice Joyce Kennard also challenged the practical ability of an employer with hundreds or thousands of employees to ensure that they are all taking required meal breaks. When the plaintiffs’ attorney responded that employers have many workable options for scheduling and ensuring the taking of meal breaks, Justice Goodwin Liu jumped in with a concern that this could be ‟kind of coercive.”

Pointing out that the hallmark of a meal period is the employer’s suspension of control over the employee, Justice Liu appeared troubled by the idea that a worker who chose to work through breaks because of loving his or her job could be subject to discipline, or even fired. Justices Carol Corrigan and Marvin Baxter expressed similar concerns. The attorney  attempted to direct the justices to the textual support for the plaintiffs’ interpretation and to analogize to other situations where employers exercise control over hours worked; however, the justices were more focused on the pitfalls of enforcement of breaks.

According to the plaintiffs’ attorney, unless employers are held accountable for ensuring breaks, many of the most vulnerable workers in our state will not get meal periods, despite the importance of these breaks to the health and welfare of workers. Although the justices did not respond to this argument at the time, the written opinion needs to address this issue directly. (more…)

Wikileaks is back in the news, as it has released another large cache of documents from the US Government. Wilileaks believes that government and corporate actions should be completely transparent, so that everyone can view and judge actions. That is a process argument – everyone needs to see how the sausage gets made.  But if the point is to let justice prevail, Wikileaks needs to recognize the right to private counsel.

Most of an attorney’s function is behind the throne, out of the view of the public. We do so not because we are hiding things, but because we need to offer options, play devil’s advocate, be yelled at. We need to give our principals – our clients – candid information and room to figure things out. We have a strong attorney-client privilege because that private space is needed to look at options. Many ideas are frequently awful, but we – clients and attorneys alike – cannot be sure until we have the space to play out the options and consequences. We don’t get to the right answer until we check a lot of wrong ones. However, if our opposition learns of our thought processes, they can take countermeasures, thereby disturbing the objective of getting to the best solution.

Transparency is great in the abstract: people collaborate together, with everyone having tools to contribute to the best solution. That model falls apart, though, when there is a force hostile to the best interests of the group.

There is also the problem of the parasites, sucking up the resources and knowledge without contributing to the whole. Secrecy is important to many businesses, from formulas to manufacturing processes, or just the identity of its customers. Competitors that could lift that information freely without contributing to their own means that it sucks the life out of the harder-working, more successful enterprise. Why tinker to improve a process when you can just take that which someone else has done? Why struggle finding the right market for your product, if someone else has done it, and you can just suck the benefit out of them? The long-term trend would be to reward the parasites and discourage the harder workers. Why innovate when you can just copy? For Wikileaks, it has rewarded the governments that have strong secrecy protections, by allowing them access to private communications of the United States, and punished those governments, like that of the United States, that have been a force for transparency, however awkward that march has been.

The true import of Wikileaks so far seems to be the banality of most of the secrets to most world citizens. Why, for example, keep secret that Australia was being scrutinized because its air safety standards was lacking? The secrecy isn’t a matter of evil, but a matter of respect: rather than humiliate a friend, you draw the friend aside and mention that there is an issue that needs to be fixed. The friend appreciates – and expects – the opportunity to fix things before it becomes a public humiliation. Even with seven billion humans and 150+ countries on this planet, “burning” someone is public is still as negative as if we were to do so in front of the tribes of our ancestors. Wikileaks is based on the assumption that we are all in a game in which we meet everyone just once, so we can avoid the consequences that would happen the next time if we burn them this time. Karma – or however you term it – guarantees that what goes around comes around.

When the Internet burst into popularity in the mid-1990s, the rush to get popular names resembled the Oklahoma land run of 1889 – but for far more fertile cyberspace locations. Cybersquatting became rampant, as parasites tried to trade on the reputations established by others.

Cybersquatting on the Internet is far less of a problem now, but now businesses and individuals face a new problem – Twittersquatting. Two years ago, Former Oakland A’s manager (and current St. Louis skipper) Tony La Russa sued Twitter over a parody Twitter account purportedly by him. The account was quickly shut down and the dispute settled, but apparently precedent has been set. Twitter squatting has been born and is set to fly.

During the Deepwater Horizon oil spill in 2010, an inspired Twitter squatter sent out tweets purportedly from BP’s public relations department. In June 2011, a secondary life insurance company called Coventry First has sued to find the identities of whoever started the @coventryfirst Twitter account, which pretends to note Coventry First’s distress when there are no plane crashes that “increase shareholder value.”

While the above examples have been mostly humorous, twits using your business’s name could destroy your company’s reputation before you even know about it. Twitter does have an anti-squatting policy, but every business should participate in the Twitter land rush by claiming its own name. Besides being a potential marketing device, claiming your business’s name prevents it from being claimed by someone else. It’s free and took me less than 30 seconds to do.