When Fair Competition Crosses The Line — The Tort Of Business Interference

You may have heard the phrase “it’s just business,” or something along those lines, to describe a situation in which a business loses a customer or a sale.  “It’s just business” implies a certain cold, even cutthroat mentality towards business relationships.  And in many respects, that’s the reality of our capitalist economic system.  But at the same time, there’s limits to what others, especially competitors, can do to your business.

For example, Iowa law recognizes that people and business have an obligation to not unlawfully interfere in the known business relationships of others.  The key word there is “unlawful.”  On the one hand, every time you lose business to a competitor, there’s a chance that the competitor “interfered” with your business by having better marketing, a better reputation, cheaper prices, or even actively soliciting your customers.  That’s life in the business world, and that’s not the unlawful interference that the law prohibits. *


*  Like everything else in the business and contracts dimensions,  these are general rules that can be widened or narrowed depending on innumerable factors, such as the relationship between you and the person who took your business, the relationship between you and the customer, and whether there’s some sort of contract between you and the interfering party, perhaps a noncompete or nonsolicitation agreement.  Business interference matters must be evaluated on a case-by-case basis.


Your actual and potential business is protected from unlawful interference.  To claim protection for potential or prospective business, as opposed to actual business, the potential business needs to be more than merely speculative.  You can’t claim that everyone on the planet, including the 99.9% of people who have never heard of you or your business, are potential business.  Rather, you have to prove a reasonably likely business relationship that will be of financial benefit to you.

People can’t interfere with something that they don’t know about.  You have to prove that the other party either knew of the actual or potential business or else had knowledge of facts that, with reasonable inquiry, would have led to disclosure of your actual or potential business relationship.

As I mentioned, not all interference is prohibited by law.  Only unlawful or “improper” interference is illegal.  Interference is improper if the other party’s interference is done with the purpose or the predominant purpose of financially harming or destroying your business.

If you can prove unlawful and improper business interference, you may be able to recover money damages to compensate you for the lost business, and even punitive damages in extreme cases.  But again, this needs to be more than speculative business.  And you have to eliminate other possible, legitimate causes for why you lost the business, especially if those alternative explanations have nothing to do with the other party’s potential interference.  Other causes can be the internal issues that I mentioned above, or they can be external factors, such as a poor market for what you’re selling.  For a hypothetical example, trying to sue for unlawful interference against the seller of combination high-speed digital copier/scanner/fax/coffee machines that yanks all the customers from your mimeograph machine business would likely be a nonstarter.

Interference with actual or potential business one just one example of several categories of “tortious interference” that the law recognizes.  There’s also interference with contract*, interference with employment relationships, interference with professional relationships, and several other less common types of interference claims.  Please feel free to call me if you have any concerns that some one has unlawfully and interfered with some aspect of your personal or business life or an employment or professional relationship that you’re involved in and I’ll be happy to see if I can give you a hand.


*    The legal theory used by Brown & Williamson Tobacco Company against CBS during the tobacco wars of the mid-1990’s when CBS tried to air an interview with a former Brown & Williamson scientist who had signed a nondisclosure agreement with Brown & Williamson.  That story and the underlying legal theory were made famous in 1999’s The Insider.  Al Pacino as CBS’s Lowell Bergman:  “Tortious interference?  That  sounds like a disease caught by a radio.”



How Is Your “Working Time” Under Overtime Law Affected When You Literally Live At Work?

“Working time” is an important concept in overtime cases.  “Working time” refers to the number of hours that an employee works.  If those hours exceed a certain minimum amount, the employee is entitled to overtime pay for the extra working time.

Some employees work at home or live on their employer’s premises on a permanent basis or for extended periods of time. Examples include an apartment complex maintenance person who lives in the apartment complex, a house parent in a group home,  a college student employed as a “resident assistant” who lives in the dormitory, or a hotel manager.   In that situation, not all of the time you spend at the worksite/home is considered “working time” for purposes of the overtime laws, although it would be nice to be paid for every hour of a 24/7 workweek.  Ordinarily, you’re not considered to be working, even while at the home/jobsite, if you have time to engage in normal private activities such as sleeping, eating, entertaining, and have other periods of complete freedom from all duties when he or she are able to leave your premises and use the time as he or she chooses.

Because it’s difficult to determine the exact hours worked under these circumstances, any reasonable agreement between you and your employer regarding working time that takes into consideration all of the applicable facts will be accepted.  In this regard, you may wish to review waiting time, meal periods, and sleep time. The agreement must indicate the number of hours you’ll work and the hours you may use for personal activities.  The agreement should consider all relevant factors, including any restrictions or limitations on the use of your personal time and the expected interruptions to eating and sleeping periods. Whether your’re really free to use personal time as you wish will depend on what actually happens, regardless of the provisions of the written agreement. Such an agreement should normally be in writing in order to avoid any possible misunderstanding of the terms and conditions of your employee’s employment.

An exact record of hours worked is not required if you’re living on your employer’s premises or working at home. You may keep a time record showing the schedule adopted in the agreement and indicate that your work time generally was the same as the agreement or schedule.  If you and your employer realize that there is a great difference between the hours you agreed to work and the hours needed to do the job, a new agreement must be reached which reflects the actual hours you’re employee is required to work.

I can help you with any overtime law  questions that you might have.  Please feel free to contact me for a free initial consultation about employment law or labor law.

Big Lots Lamp Recall

The U.S. Consumer Products Safety Commission and Big Lots have announced a recall of floor lamps sold at Big Lots:

Name of Product: Five-Light Floor Lamps

Units: About 43,700

Importer: Big Lots, of Columbus, Ohio

Hazard: The wiring for the lamp’s light sockets can become exposed, posing a risk of electric shock to consumers. In addition, use of the recommended standard 40 watt light bulbs can generate excessive heat, which can melt the double plastic shades over the bulbs.

Incidents/Injuries: The firm has received four reports of melting lamp shades. No injuries have been reported.

Description: This recall involves Classic Quarters Five Light Floor Lamps. The lamps stand about five feet tall and have a gunmetal or chrome colored metal pole and five adjustable lights mounted on flexible metal tubes at the top. Dark plastic or multi-colored double plastic shades cover each of the five lights. Recalled lamps use standard incandescent or CFL bulbs and have labels marked with the model number “G-1843-5” affixed to the underside of the lamp base. These lamps can be further identified by SKU numbers 612007239, 612007829 or 612008982 at the beginning of the instructions. Lamps that use candelabra bulbs are not subject to this recall and can be identified by labels marked with the model number “G-1844-5B” and SKU numbers 612009036 or 612009037 in the instructions.

Sold exclusively at: Big Lots stores nationwide from April 2010 through November 2011 for between $30 and $50.

Manufactured in: China

Remedy: Consumers should immediately stop using the lamps and return them to a Big Lots store for a full refund.

Please feel free to contact me if you have a personal injury or wrongful death or products liability matter concerning a space heater that you would like to discuss.  I’ll be happy to see if I can give you a hand.

Employment Rights Of “Ministerial” Employees

This week the United States Supreme Court issued an important decision regarding the employment rights of ministers.  The case, Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, concerned application of the “ministerial exception” to many employment laws.  The Supreme Court had not previously recognized the exception and did so for the first time in Hosanna-Tabor.

As I’ve discussed throughout this website and blog, certain employment discrimination laws authorize employees who have been wrongfully terminated to sue their employers for reinstatement and damages. The question presented by the “ministerial exception” is whether the First Amendment’s religious clauses bar such an action when the employer is a religious group and the employee is one of the group’s ministers.

Under the ministerial exception, the First Amendment prevents the government from interfering with the decision of a religious group to fire one of its ministers.  The exception applies only to suits by or on behalf of ministers themselves.  The purpose of the exception is not to safeguard a church’s decision to fire a minister only when it is made for a religious reason. The exception instead ensures that the authority to select and control who will minister for a church will be the church’s alone.  Thus, church ministers forfeit many state and federal employment rights when they assume the ministry.

The ministerial exception is not limited to the head of a religious congregation.  Nor is there a rigid formula for deciding when an employee qualifies as a minister.  Instead, courts must consider all the circumstances of the person’s employment in deciding whether that person qualifies as a ministerial employee.  Such considerations might be the employee’s formal title given by the church, the substance reflected in that title, the employee’s own use of that title, and the religious functions the employee performed for the church.  The employee’s title, by itself, does not automatically ensure coverage under the ministerial exception, but the fact that an employee has been ordained or commissioned as a minister is relevant, as is the fact that significant religious training and a recognized religious mission underlie the description of the employee’s position.  Moreover, the amount of time an employee spends on particular activities is relevant in assessing that employee’s status, but that factor cannot be considered in isolation, without regard to the nature of the religious functions performed and the other considerations discussed above.

The Supreme Court declined to decide whether the ministerial exception was limited to employment matters, or whether the exception extended to other, more general types of legal claims that are not necessarily traditional “employment” suits.  So it is possible that a minister will have other legal rights against the minister’s employer that are outside the scope of and not affected by the ministerial exception.

Please feel free to give me a call if you have an employment law matter that you’d like to discuss.  I’ll be happy to see if I can give you a hand.

Ford Vehicle Recall

Ford has announced a major recall of some of its vehicles:

“The affected vehicles are the 2001 and 2002 Ford Escape compact SUV, and the 2004 and 2005 Ford Freestar and Mercury Monterey minivans.  The Escape, of which there are an estimated 245,000 on the road, has a reservoir cap on its brake master cylinder that can leak brake fluid, which could lead to smoking or even a fire, according to the recall notice from the National Highway Traffic Safety Administration.

The minivans, of which there are 205,000 on the road, have a torque converter output shaft that can fail, which can cause the vehicle to lose power, increasing the risk of a crash.

Ford (F, Fortune 500) spokesman Daniel Pierce said the company is aware of two minor accidents attributed to the minivan recall, with minor injuries reported in one and no injury in the other. Pierce said he’s not aware of any accident or injury involved in the Escape recall, only reports of property damage.”

Source:  http://money.cnn.com/2012/01/11/autos/ford_recall/

Please feel free to contact me if you have a personal injury or wrongful death or products liability matter concerning a vehicle that you would like to discuss.  I’ll be happy to see if I can give you a hand.

Triple Eight Bicycle Helmet Recall

The U.S. Consumer Products Safety Commission has announced a recall of bicycle helmets manufactured by Triple Eight Distribution.

Name of Product: Bicycle helmets for children and youth

Units: About 30,400

Importer: Triple Eight Distribution, Inc., of Port Washington, N.Y.

Hazard: Product testing demonstrated that these helmets do not comply with CPSC safety standards for impact resistance. Consumers could suffer impact head injuries in a fall.

Incidents/Injuries: None reported

Description: The recalled items are multi-purpose helmets also sold for use as bicycle helmets. Little Tricky helmets are marketed for children and youth, and feature a large Little Tricky logo on both sides of the helmet. They come in one size and in black, white, pink and green. Triple Eight S/M EPS Liner helmets feature a hard black inner EPS foam liner and come in black, white, bone, blue and army green. Sector 9 S/M EPS Liner helmets feature the same EPS liner and come in gray, white, black, blue and green. Both the Triple Eight and Sector 9 helmets have an interior label indicating the size “S/M” for small/medium and a manufacture date indicated as month/year (ex. APR/2011). Only Triple Eight and Sector 9 size “S/M” EPS Liner helmets are affected.

Sold at: Bicycle and sports stores and other retailers nationwide and online from August 2006 through November 2011 for about $40.

Manufactured in: China

Remedy: Consumers should stop using the product immediately and contact Triple Eight for a full refund.

Consumer Contact: For additional information, contact Triple Eight toll free at (888) 548-8518 between 9 a.m. and 5 p.m. ET Monday through Friday or visit the firm’s website at http://www.triple8.com

Please feel free to contact me if you have a personal injury or wrongful death or products liability matter concerning a space heater that you would like to discuss.  I’ll be happy to see if I can give you a hand.