DIY Lawsuit? – Legal Protections for Small Businesses, DIY Culture, and the Maker Movement

With the surge of ingenious and fun small businesses in hip American cities from San Francisco to Brooklyn, I’m concerned that these fantastic little companies may see their growth and success threatened by a failure to tend to the fundamental legal details. The potential legal and financial ramifications of such failures may be ruinous and affect far more than the mere destruction of the business itself. A dreadful lawsuit, for example, could leave a well-meaning and artistic business owner who otherwise failed to account for unforeseen legal pitfalls facing the grief of bankruptcy or lifelong liability debts levied by a court of law after a lawsuit brought by a powerful competitor or an employer or other business associate represented by a contingency lawyer. Often, these inventive and gutsy business owners have spent so much time building their company’s goodwill and creative genius but have utterly failed to consult with an honest and intelligent business attorney to help them prepare contracts, brochures, and corporate formation documents, safeguard intellectual property, advise them of legal prevention techniques, and train and educate their employees about their legal rights and responsibilities. There is much that a great business lawyer can do for the solo DIY business owner or Maker, and it may be the single biggest mistake you make to not spend the time and money upfront to protect yourself as well as possible in this extremely litigious California marketplace.

In the San Francisco Bay Area, I think of the new cafe owner in Nob Hill, the soulful organic and sustainable landscape designer and builder in Berkeley, the DIY craftswoman selling wonderful lines of felt and waxed canvas backpacks in the Mission, the graphic designer turned jewelry maker who sells her space-age 3D Dutch-printed earrings online and at major crafts events in Potrero and Fort Mason, the young women who are operating private nanny or daycare businesses out of their homes in Glen Park or in Santa Cruz, the knitters and sewers creating fashion trends in Temescal and Hayes Valley, the local farmers providing eggs, meat, and vegetables at Farmer’s Markets every week from Aptos to San Rafael, the underground organic and gourmet chefs hosting hush-hush paid dinners out of fancy or hip homes throughout the Bay Area and particularly in San Francisco, Oakland, and Santa Cruz, the professional ballet, yoga, and pilates teachers working out of clients’ homes or in local community dance spaces, the Massage Therapists, the Marriage and Family Therapists, and the Acupuncture and Acupressure professionals that bring healing to people’s homes in Campbell, San Jose, Palo Alto, Berkeley, and San Rafael, and the myriad artists and musicians who line the streets of downtown Santa Cruz, Oakland, Berkeley, and San Francisco during the monthly Art Walks and Art Murmurs.

When I ask my friends involved in such lines of work about the legal protections they are taking to safeguard their intellectual property and other legal interests, I often hear that they simply haven’t considered the subject at all, thus leaving them exposed to all sorts of potential legal problems that might utterly ruin their businesses and their future financial security and which might perhaps be easily prevented with the aid of a few important precautionary steps.  Here are a few good suggestions:

  1. Make a Hand-Tailored, Legal, Written Contract with Your Business Partners, Associates, Employees, Distributors, Purveyors, Exhibitors, Producers, Artists, and Anybody Else Upon Whose Work Your Business Relies.

  2. Make Sure You Provide Your Employees with a Brochure and Regular Presentations Advising Them of their Rights and Responsibilities, Various Laws that Affect their Work, Your Expectations of Them, and How To Maintain a Safe and Legal Work Environment that is Free from Harassment, Discrimination, or other Interpersonal Problems.

  3. Make Sure You Have Taken the Formal Steps to Safeguard Your Intellectual Property, including any Patents, Trademarks, Trade Secrets, and Copyrights; and Make Sure You Are Not Violating Anybody Else’s Intellectual Property.

  4. Make Sure that Your Products, Merchandise, Business Practices, and Physical Business Space are Safe to Consumers and Employees.

  5. Make Sure that You Are Fair, Honest, and Upfront in All Your Advertising and Your Business Dealings.

For example, I think of the artists and musicians who display their talent in a local cafe or gallery. Has the artist created any sort of contract with the gallery or cafe owner about liability for any damages to their $1000+ artwork while it’s exhibited there for a month? Or has the cafe or gallery owner made a contract with his or her employees regarding their legal duties to each other? Are the employees advised as to the law regarding sexual harassment of other employees or of customers? What about the organic and sustainable landscaper – has he made sure that all drivers working for him are licensed, insured, and safe drivers? Or the home-based daycare business owner – has she amply vetted and trained her coworkers, has she baby-proofed her home, does she have sufficient protections and clear agreements in her contracts with her clients, and of course, is she sufficiently licensed and insured? Or the home cleaner – has he/she taken sufficient efforts to protect him/herself from any safety or legal concerns vis-a-vis the home owner?

I truly believe that the single best piece of advice that any lawyer can give is that an ounce of prevention is worth a pound of cure. It is well worth your time and money to consult with an attorney and to hire an attorney to prepare the legal foundations of your business, including crucial contracts and other legal brochures and papers that you can use to try as best as you can to protect yourself in your dealings with various individuals and companies. That way, if you are sued or otherwise involved in any sort of legal problem, you may find yourself in a safer and stronger position that you may have otherwise been. With this type of attention to your financial and legal well being, you can help your creative business thrive. It is these very tactics that larger and more successful businesses have employed for decades in the United States, and it is crucial to take lessons from their success so as to be able to promote the more sustainable, creative, and local business models that we would all like to see develop from the DIY Culture and Maker Movement.

Business LawAli Shahrestani