Business Law FAQs

As a small business owner, legal questions likely arise all the time in all aspects of your business, but you may not have your own in-house counsel to deal with these matters for you. Below are answers to a handful of frequently asked questions collected by the attorneys at the Hancock Law Firm that may answer some of the questions you have. If you have other questions or need help with business entity formation, a breach of contract dispute or other business law matter, call the Hancock Law Firm at (601) 853-2223 to speak with a knowledgeable and experienced business lawyer.

Q. Is a covenant not to compete enforceable in Mississippi?

A. A noncompete agreement that limits the ability of a former employee to go into direct competition with a former employer may be enforceable if it is reasonable and well-written. First of all, the agreement must protect a legitimate business interest of the employer, such as good will. Also, there must be some consideration in exchange for the employee’s assent to the agreement, although initial or continued employment is usually sufficient. Courts may also look to whether the agreement creates a hardship for the former employee, and courts may also examine what effect on the public the limitation may have. The main factors to look at in deciding whether a noncompete agreement is reasonable are the duration of the agreement and its geographic scope.

Q. Should I agree to arbitration of my business dispute?

A. Many companies put arbitration clauses in their agreements, so that any breach of contract or other dispute would be decided in arbitration as opposed to litigation. When challenged, Mississippi courts may or may not enforce these clauses. But even if arbitration is not mandatory in your dispute, you may want to consider it as an alternative to litigation. An arbitrator is likely to have specialized knowledge of your particular industry and may have worked in the industry for many years or arbitrated several cases like yours. Arbitration decisions are therefore generally more predictable than jury verdicts, and the arbitration process is generally faster and less costly than litigation. The arbitration hearing can also be held privately, as opposed to airing out your grievances in open court. Whether all of these factors make arbitration favorable in your particular dispute or not is something you will want to discuss with your attorney when planning your strategy for resolving the dispute.

Q. Can I get sued for unfair debt collection?

A. The federal Fair Debt Collection Practices Act, which puts many limits and restrictions on what you can and cannot do to collect a debt, only applies to bill collectors and collection agencies. If you are the original creditor, you are not restricted by the FDCPA, but you could still be sued for abusive or illegal practices under other Mississippi or federal laws. If you are having trouble collecting a debt, there are many safe, legal means that an experienced business law attorney can help you with.

Q. Are my employees exempt from overtime so long as I pay them a salary instead of hourly?

A. Most employees are entitled to overtime pay at one and half times their regular rate of pay for every hour over 40 hours that they work in a workweek. The Fair Labor Standards Act (FLSA) does offer an exemption from the overtime requirement for administrative, executive and professional employees, but they must satisfy the criteria for the particular exemption. It is true that to meet the definition of an exempt employee, the worker must be paid a salary of at least $455 per week. However, the salary basis test is only one part of the overtime exemption. Depending upon the exemption you are seeking, the employee must meet other criteria to be exempt, such as managing other employees, exercising independent judgment and discretion, or having specialized education or training. The job description for an exempt employee should specify if the employee is exempt and list those exempt functions, but these functions must match up with what the employee actually does. Misclassified workers can file wage claims and lawsuits and recover years worth of unpaid overtime, plus interest and penalties.

Contact Us
Call Us for a Consultation Today