The Importance of Defining “Premises” in a Commercial Lease

Commercial leases spell out the mutual duties and responsibilities of landlords and tenants. A common feature of most commercial leases is language that indemnifies each party from potential legal liability. Commercial leases must also define the exact areas under the respective control of tenants and landlords. A recent Florida appeals court decision helps explain how lease definitions regarding premises and indemnification clauses actually work in practice.

Hillstone Restaurant Group v. PF Chang’s Bistro, Inc.

This landlord-tenant dispute arose as the result of a personal injury lawsuit. In 2007, a woman tripped and fell over a curb in front of a P.F. Chang’s restaurant. She sued both P.F. Chang’s and its landlord, Hillstone Restaurant Group (also known as Houston’s) for negligence.

P.F. Chang’s and Houston’s counter-sued one another over who should be held responsible for any damages the plaintiff might recover. A trial court granted summary judgment to P.F. Chang’s, the tenant, holding the landlord was responsible for the curb area where the woman allegedly tripped. P.F. Chang’s appealed.

However, on August 13 of this year, the Florida Third District Court of Appeals reversed the trial court decision and entered summary judgment for the landlord, Houston’s. The appeals court said the trial judge read the parties’ lease incorrectly. The key word in the lease was “premises.” Under the lease, P.F. Chang’s, as the tenant, indemnified Houston’s from any damages arising from an accident on the leased premises. P.F. Chang’s—and the trial court—said “premises” did not extend to common areas of the larger commercial development. But Houston’s—and the appeals court—said the lease itself defined “premises” as certain specific parcels of land dedicated permanently to P.F. Chang’s use. One of these parcels included the curb. There could therefore be no dispute, the appeals court said, that the alleged injury occurred on P.F. Chang’s premises.

The indemnification language in the lease drew a clear distinction between the premises and other areas of the development. P.F. Chang’s, as the tenant, indemnified Houston’s for anything that happened on the premises. The landlord was responsible for anything taking place within the commercial development but outside of P.F. Chang’s premises.

Additionally, the appeals court noted the lease specified Houston’s leased the premises to P.F. Chang’s “as-is” and without any warranty. This meant P.F. Chang’s could not claim Houston’s lacked indemnification against injuries arising from faulty design or construction of the curb within the premises.

Never Negotiate a Lease Without Help

The Hillstone case highlights the importance of carefully negotiating a commercial lease. Even small businesses need qualified legal help before signing certain documents, the effects of which may mean the difference between indemnification and multi-million judgments. If you need assistance from a Florida real estate and small business attorney, contact John S. Sarrett today.

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Tampa Arrest Highlights Danger of Debit Card Scams Targeting Retailers

Credit and debit cards are the lifeblood of many Florida retailers. But business owners must properly train their employees on how to handle declined cards lest they cost their bosses time and money. This lesson applies to large retailers just as much as Main Street stores, as technology giant Apple, Inc., learned recently.

Apple the Victim of a “Force Post” Scheme

Last month, prosecutors in Tampa charged a man with defrauding Apple of more than $300,000 in a debit card scam. According to an affidavit filed by Special Agent Bryan Haliwell of the United States Secret Service, the man allegedly used canceled debit cards to purchase goods at Apple retail stores in the Tampa area. For example, in January 2013, Haliwell said the man purchased over $7,700 in goods at an Apple store in Brandon using a fake bank debit card. When the card was declined at the register, the man allegedly pretended to contact the bank to obtain an override code that allowed the Apple store to “force post” the sale. In another instance the following month, Haliwell said the man purchased nearly $6,300 in goods from an Apple store in Boca Raton, this time without even having to provide the override code. Altogether, the Secret Service said it identified more than 40 fraudulent transactions.

How was the man supposedly able to get away with providing false override codes to Apple? Because, as the United States Attorney’s Office in New Jersey explained in a similar case from earlier this year, the codes themselves are not unique numbers:

[I]t does not actually matter what code the merchant types into the terminal. Any combination of digits will override the denial. So long as the customer provides a fake authorization code and convinces the merchant to enter it into the terminal, the transaction will go through. The merchant is unlikely to discover the fraud until days or weeks later.

And when the merchant does discover the fraud, they may be out of luck. As Special Agent Haliwell said in the Apple case, “Because Apple employees overrode the initial declination [of the debit cards] against the instructions of [the card issuer], Apple, not the financial institution, suffered the loss as a result of the fraudulent transaction.”

Ultimately, it is the retailer’s responsibility to ensure any debit card used to pay for a purchase is valid. If there is a legitimate case for entering an override code, the retailer’s employee must personally contact the financial institution to receive the code. The retailer should never allow the customer to provide that information.

Protecting Your Business

It should be noted the Apple case remains pending before the courts, and the man charged is innocent until proven guilty. But all Florida retailers should be on alert for the type of scheme described in Special Agent Haliwell’s affidavit. Not all retail theft takes the form of shoplifting. That is why business owners must ensure they have proper procedures in place to train and monitor employee handling of debit cards. If you have any questions about this or any other business law issue, contact Naples attorney John S. Sarrett today.

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Tax Court Finds Retailer Liable for Improper Accounting of Customer Loyalty Program

Retailers commonly offer discounts, either through coupons or “customer loyalty” programs, in order to attract repeat business. If your Florida small business chooses to offer such discounts, it is important to be aware of the potential tax and accounting implications. One Pennsylvania retailer recently learned it must pay more than $3.7 million in back taxes as a result of failing to properly account for their customer loyalty program.

Giant Eagle, Inc. v. Commissioner of Internal Revenue

Giant Eagle is a successful supermarket chain based in Pittsburgh. Giant Eagle also operates a gas-and-convenience store chain under the name GetGo. In 2006 and 2007, Giant Eagle ran a customer loyalty program called “fuelperks!” Under this program, for every $50 a customer spent at Giant Eagle, he or she would receive a 10-cent discount on a future gas purchase at GetGo. Customers could accumulate multiple discounts through the use of loyalty card, so in theory he or she might acquire enough 10-cent discounts to get a free gas purchase. Customers had to redeem the discounts in the same month they were earned, and they could not redeem the discounts for cash.

Giant Eagle’s accounting of the fuelperks program eventually led to a dispute with the Internal Revenue Service. Like many inventory-based retailers, Giant Eagle uses an accrual method of accounting. This means income and expenses must be recorded at the time they are earned or incurred, respectively. Under federal tax law, a business using the accrual method must record a liability in the year “all the events” necessary to establish the liability take place. This would apply to business expenses such as the cost of administering Giant Eagle’s fuelperks program.

In its 2006 and 2007 federal tax returns, Giant Eagle claimed more than $7 million in unredeemed and unexpired “fuelperks” discounts as a business expense. The IRS disallowed this deduction. Giant Eagle challenged the IRS decision, but on July 23 of this year, the U.S. Tax Court, an administrative tribunal that hears tax-related appeals, ruled for the government.

The IRS argued, and the Tax Court agreed, that the “fuelperks” claimed expense did not meet the requirements of the “all events” test. Simply put, Giant Eagle could not offset the estimated future cost of redeeming discounts that customers had yet to take advantage of. The “all events” rule means Giant Eagle cannot incur an expense until the final event—the customer redeeming the discount for a gasoline purchase—takes place.

The Tax Court’s decision means Giant Eagle is on the hook for an additional $3.7 million in back taxes. It’s a costly lesson that should cause other retailers to take notice. Retailers must always be aware of the potential implications of their discount programs and other business practices. If you need advice on this or any other subject, contact Florida business attorney John S. Sarrett today

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Supreme Court’s Hobby Lobby Decision Emphasizes Importance of Corporate Structure

On June 30, the United States Supreme Court issued its long awaited decision in Burwell v. Hobby Lobby Stores, Inc. The Court settled a number of lawsuits challenging Department of Health and Human Services regulations requiring employers to provide insurance coverage for contraception. Several employers objected to this mandate on religious grounds.

In an opinion authored by Justice Samuel Alito, a majority of the Supreme Court held, “As applied to closely held corporations,” the HHS contraception rules violated the Religious Freedom Restoration Act, a 1993 federal law that bars the government from imposing “substantial burdens” on a “person’s exercise of religion” unless there is a “compelling governmental interest” and the regulation at issue “is the least restrictive means” of fulfilling that interest. Here, Justice Alito said the government failed to prove its mandate was the “least restrictive means” of ensuring employees have cost-free access to birth control while respecting the religious objections of certain employers.

Defining “Closely Held Corporation”

The Supreme Court’s decision does not apply to all businesses. Rather, its scope is limited to “closely held corporations,” a term the Court did not expressly define in its opinion. Corporations are governed by state, not federal, law. Broadly speaking, there are two types of corporations—those whose shares are publicly traded on a stock exchange, and those whose shares are “closely held” by a few individuals. Most Florida corporations are closely held.

The Internal Revenue Service defines “closely held corporations” for tax purposes as a corporation where more than 50% of the stock is held by five or fewer individuals. This excludes “service corporations,” such as law and medical offices. Again, the Supreme Court did not specifically endorse this definition in its opinion.

And as Justice Ruth Bader Ginsburg pointed out in her opinion dissenting from the Hobby Lobby decision, “’Closely held’ is not synonymous with small.” She noted Hobby Lobby, one of the lead plaintiffs in this case, is a sizable operation despite being family-owned. Justice Ginsburg offered other examples: “[T]he family-owned candy giant Mars, Inc., takes in $33 billion in revenues and has some 72,000 employees, and closely held Cargill, Inc., takes in more than $136 billion in revenues and employs some 140,000 persons.”

Selecting the Right Corporate Structure

You might also be familiar with the term “S Corporation,” which is a specific type of closely held corporation that is treated as a partnership for tax purposes. An S corporation may have no more than 100 shareholders, and each shareholder must be an individual, estate or trust. (In other words, none of the shareholders can themselves be corporations or partnerships.)

Even if cases like Hobby Lobby do not directly affect your interests, the Court’s decision serves as an important reminder to all Florida small businesses to properly structure their businesses in order to maximize legal and tax benefits. Contact Naples attorney John S. Sarrett today if you have any questions regarding corporate structure or any other legal question affecting your business.

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Understanding Sexual Harassment Laws

On June 10, the U.S. Equal Employment Opportunity Commission announced SunTrust Bank will pay $300,000 to settle claims that a branch manager in Sarasota, Florida, sexually harassed three female employees. The EEOC initially sued SunTrust in 2012 in a federal court proceeding. Rather than proceed to trial, SunTrust agreed to a “consent decree” requiring the company to not only pay the $300,000, but also “to conduct annual, live training for its managers and human resources personnel in Southwest Florida, which the EEOC will be able to watch by live streaming video.” The EEOC will oversee SunTrust’s training efforts for the next three years.

Sexual harassment is a serious matter that can affect any business regardless of size. All Florida small businesses should understand what is—and is not—sexual harassment and take the appropriate steps to avoid the type of conduct that landed SunTrust in hot water with the EEOC.

Sexual Harassment Is Sex Discrimination

Title VII of the Civil Rights Act of 1964 makes it illegal for any business employing at least 15 people to discriminate or base employment decisions on a person’s “race, color, religion, sex, or national origin.” Congress charged the EEOC with enforcement of Title VII. Acting under its regulatory power, the EEOC defines “sexual harassment” as a form of discrimination based on sex prohibited under Title VII.

EEOC regulations further define sexual harassment as “[u]nwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature” when such conduct affects a person’s employment. For example, in the SunTrust lawsuit, the EEOC said a branch manager repeatedly harassed female employees by “repeatedly trapping a 20-year-old female behind the teller counter with his body; telling a woman she should wear a bathing suit to work; regularly staring at women’s breasts; and frequently caressing and grabbing a female employee.” (Please note that these remain allegations, and SunTrust’s decision to enter into a consent decree does not constitute an admission of guilt.)

Employer’s Responsibility

When one employee sexually harasses another, the employer is responsible, according to EEOC rules, if management or ownership “knows or should have known of the conduct,” and fails to take “immediate and appropriate corrective action.” This means employers must always be proactive in discouraging and preventing sexual harassment. Even small businesses should have procedures in place for receiving and addressing sexual harassment complaints.

The EEOC takes a broad view of sexual harassment. It is not necessary for the harasser and the victim to be members of the opposite sex. A male supervisor can sexually harass a male employee. Nor is it necessary for the victim to suffer any direct injury like loss of income or termination. And the victims of sexual harassment can include persons indirectly affected by the misconduct, such as an employee denied a promotion because another employee was promoted in exchange for sexual favors.

All this means that even a small employer should work with an experienced Florida business attorney who can help navigate the complexities of sexual harassment and other federal and state civil rights laws. If you need assistance, contact Naples attorney John S. Sarrett today.

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What Florida Small Businesses Should Know About Bitcoin

Florida retailers and other small businesses are used to handling credit cards and other forms of online payments. Then there are so-called “virtual currencies” like Bitcoin. Many traditional retailers have started to accept Bitcoins as payment for goods and services. But what are the legal risks and ramifications of Bitcoin?

What Is Bitcoin?

Bitcoin is a peer-to-peer network that allows for near-instant payments among its users. The actual “Bitcoins” are data generated by a computer algorithm that limits the total number of available units—much like the gold standard once limited the supply of currency. Bitcoin users maintain a virtual wallet that records not only their own Bitcoins, but also every transaction made throughout the network. This is known as the “blockchain.”

Is Bitcoin “Money”?

The United States government has the exclusive right to declare what is (and is not) legal tender—i.e., money—within its borders. Bitcoin is not recognized as legal tender in the United States or Florida. That does not make it illegal to use Bitcoins in the course of your business, but it does mean that it and other virtual currencies are not backed by any government.

The Internal Revenue Service considers Bitcoins a form of property rather than currency. This means that if a retailer accepts Bitcoins as payment for goods, the sale must be recorded in dollars based on the “fair market value” of the Bitcoins on the date of the transaction. Similarly, if you pay an employee or an independent contractor in Bitcoins, those transactions must also be reported to the IRS in terms of dollars. And if you later exchange any Bitcoins you receive for dollars, you will need to report any difference in the value from the date you received the virtual currency as a capital gain or loss.

Risks of Using Bitcoin

In March the Florida Office of Financial Regulation (OFR) issued a consumer warning regarding the use of Bitcoins and other virtual currencies. The OFR identified several risks to customers and businesses of relying on Bitcoin over more established forms of payment. First and foremost, Bitcoin has no insurance guarantee. A traditional bank account is insured against loss by the Federal Deposit Insurance Corporation. Bitcoin has no central bank or governing authority. If a virtual wallet is lost, hacked or destroyed, the Bitcoins contained within them are also lost.

Bitcoin is also unpredictable. Many Bitcoins are held by speculators hoping to score a quick profit from market volatility. This makes the value of Bitcoin unstable relative to the dollar. Small businesses need to take steps to mitigate this risk if they decide to accept payment in Bitcoin—for instance, by converting Bitcoins to dollars right away and not holding significant amounts in virtual wallets.

None of this is to suggest Bitcoin and other virtual currencies will not continue to develop and improve. But small businesses need to be aware of the risks and take appropriate steps before wading into the pool of virtual currency. To stay on top of Bitcoin’s emerging legal status, you should consult with an experienced Florida business attorney. Contact Naples business attorney John S. Sarrett today if you have any questions or concerns.

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Who Is (and Is Not) an “Employee”?

Although small business owners may think of themselves as “self-employed,” they are not necessarily employees of their own business. The term “employee” is commonly used in federal and state laws governing businesses, including the Americans with Disabilities Act (ADA) and the Florida Civil Rights Act (FCRA), but the precise definition of “employee” can vary depending on circumstances. A part owner of a business may be classified as an “employee” for some purposes but not others. This can prove especially confusing when determining the total number of employees a business has, which is critical because the ADA and FCRA only apply to firms with 15 or more “employees.”

Understanding Business Structures

How you structure your business goes a long way in determining who is, and is not, an employee. If you are a sole proprietor, then you are the owner of your business. There is no legal distinction between a sole proprietor and his or her business; they are one in the same. You may hire and fire employees, but you yourself are not an employee.

But what if there is more than one proprietor? Two or more persons may form a partnership. Like a sole proprietorship, there is no legal distinction between a partnership and the individual partners. Each partner shares in the profits or liabilities of the business. For tax purposes, partners are not considered employees. And as a general principle, partners are never considered employees so long as they all participate in the management of the business.

Things may become murkier if the business has a more formal legal structure, such as a corporation or limited liability company (LLC). These corporate forms exist separately from the owners. That is, a corporation and its shareholders—or an LLC and its members—are separate entities. This primarily serves to insulate the liability of individual owners for business debts. But what does it mean in terms of defining “employee”?

The answer is that there is no fixed answer. The government and the courts look at a variety of factors in deciding whether a person is an owner, employee or even an independent contractor. A basic question is who has control of the working relationship. If three people form a partnership, but one partner has the ability to fire the other two partners, that may suggest an employment relationship despite the business structure. Similarly, if the business is a corporation, a manager may still be considered an employee even if she has some stock in the business or holds the title of “president.”

It is also important to understand that a person may be considered an “employee” under some laws but not others. The Internal Revenue Service may define an employee differently for tax purposes than Florida officials may define it in applying state anti-discrimination laws. Such confusion is why all employers should work with an experienced Florida business attorney who can help determine obligations under the law. Contact Naples attorney John S. Sarrett today if you have any questions.

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How Tipping Employees Affects the Minimum Wage

British Columbia restaurateur David Jones recently made news when he announced his newest restaurant would have a “no tipping policy,” in what is believed to be a first for Canada. Jones plans to pay his servers a fixed percentage of gross sales instead of using customer gratuities to offset minimum hourly wages. Although some high-end U.S. restaurants have moved to abolish tipping, it remains the common practice in North America.

Most restaurants in Florida and the United States are small businesses. Federal and state labor laws allow employers to “credit” employee tips against the statutory minimum wage. But employers must be careful in how they treat tipped employees to avoid legal complications.

How Much Is the Minimum Wage?

The Fair Labor Standards Act establishes a federal minimum wage of $7.25 per hour. With respect to “tipped employees,” an employer may credit up to $5.12 per hour for actual tips received, meaning the employer need only pay a cash minimum wage of $2.13 per hour.

Florida imposes a higher minimum wage than the FLSA. The Florida Constitution requires an upward adjustment of the minimum wage each year to account for inflation. As of January 1, 2014, the Florida minimum wage is $7.93. Employers may credit up to $3.02 per for tips received. That means Florida employers must still pay a cash minimum wage of $4.91 per hour, more than double the federal requirement.

Who Is Considered a “Tipped Employee”

An employer may only claim credit for a “tipped employee,” which the FLSA defines as “those who customarily and regularly receive more than $30 per month in tips.” The same standard applies under the Florida minimum wage.

But what about an employee who does more than one job? Let’s say a person works part-time as a waiter and part-time as a maintenance worker for the same restaurant. Maintenance workers are typically not tipped employees. In such cases, the employer may only claim credit against the minimum wage for the hours the employee works as a waiter.

This is why it is essential for employers to clearly define employee functions. A waiter who does incidental maintenance work, such as washing dishes, may still be considered a “tipped employee” for minimum wage credit purposes, provided no more than 20% of their work is spent doing traditionally non-tip-producing functions.

Who Controls Tips?

Tips are the property of employees, period. An employee cannot be required to turn over any tips received to his or her employer. It does not matter whether or not the employer claims a tip credit against the minimum wage. For example, a Florida employer cannot pay a waiter the (non-credit) minimum wage of $7.93 per hour in exchange for receiving a portion of the employee’s tips.

Employees, however, may pool and share tips. A server may, for instance, give a portion of his or her tips to a busboy. An employer must notify an employee of any required tip pooling. And as always, the tips remain the property of the recipient. The employer must only claim a minimum wage credit for those tips each employee actually receives.

Complying With the Law

Minimum wage laws are just one of many labor regulations a Florida small business must comply with on a daily basis. In order to keep up with legal developments, it’s important to retain an experienced Florida business attorney. Contact attorney John S. Sarrett in Naples today if you have any questions.

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Florida Supreme Court Rules Pregnancy Discrimination Violates State Law

All Florida small business owners must be aware of their obligations under federal and state civil rights laws. It is against the law for any employer to discriminate against an employee (or potential employee) on the basis of sex, race, age or marital status, among protected characteristics. Discrimination may include conduct such as segregating employees on the basis of a protected characteristics, or limiting their opportunities for work in advancement in any way.

In 1978, Congress amended federal civil rights law to prevent employment discrimination on the basis of “pregnancy, childbirth, or related medical conditions.” The Florida Civil Rights Act, which governs claims in state courts, does not expressly mention pregnancy, although it does broadly prohibit discrimination based on an employee’s sex. But the Florida Supreme Court recently held that sex discrimination automatically includes pregnancy discrimination.

Delva v. The Continental Group, Inc.

Peguy Delva worked as a front desk clerk for a property owned by The Continental Group, Inc. In 2011, Delva sued the company, claiming it took “adverse employment action” against her due to her pregnancy. She said the company “conducted heightened scrutiny of her work” during her pregnancy, and denied her extra shifts before and after her maternity leave.

Delva brought her lawsuit under Florida state law. The trial court dismissed her complaint on the grounds that the Florida Civil Rights Act did not recognize pregnancy discrimination as a separate cause of action. An intermediate appeals court affirmed that decision, although it acknowledged another Florida appeals courts previously held the state’s ban on sex discrimination covered pregnancy discrimination. Because of this conflict, the Florida Supreme Court agreed to hear Delva’s appeal.

By a 6-1 vote, the Supreme Court decided to reinstate Delva’s lawsuit. Justice Barbara J. Pariente, writing for the majority, said pregnancy discrimination “is in fact discrimination based on sex because it is discrimination as to a natural condition unique to only one sex and that arises because of an individual’s sex.” In other words, since only women may become pregnant, any adverse employment action taken against a pregnant woman is, by definition, discrimination based on sex.

Chief Justice Ricky Polston was the lone dissenting vote. He argued the “plain meaning” of “sex,” as used in the Florida Civil Rights Act, referred only to gender and not to any condition, like pregnancy, that might only apply to one gender or the other. The chief justice further noted that even if pregnancy discrimination is not covered by state law, Delva could still sue her employer under federal law.

Employers Are Now On Notice

Although the Supreme Court’s decision makes it clear pregnancy discrimination is already covered under the Florida Civil Rights Act, state legislators may amend the law to make this point explicit. The Florida Senate recently approved a bill that would add pregnancy to the list of protected characteristics under state law. As of this writing, the measure awaits approval by the Florida House of Representatives and the governor.

Regardless of the legislature’s actions, all employers are now on notice that pregnancy discrimination will not be tolerated by Florida courts. It is important for all Florida business owners to familiarize themselves with state and federal laws on this subject, and to seek the counsel of an experienced Florida business attorney. Contact Naples attorney John S. Sarrett today if you have any questions.

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Florida Auto Dealer Wins Free Speech Challenge to Local Sign Ban

The most complicated legal challenges a small business—particularly a retail establishment—faces is at the local level. Every Florida municipality has its own rules for zoning, building, licensing, permits, et cetera. Navigating such a legal minefield requires the assistance of an experienced South Florida business attorney.

While small businesses must always comply with applicable regulations, there are cases where local officials go too far and litigation is a necessary and appropriate response. In one recent case from central Florida, a federal judge invalidated part of a city ordinance that restricted the ability of businesses to display signage on their own property. The judge held the First Amendment’s protection of free speech overruled any justification city officials had for some of its rules.

Bee’s Auto, Inc. v. City of Clermont

Wayne Weatherbee owns Bee’s Auto in Clermont, which is located in central Florida’s Lake County. For nearly a decade, Weatherbee has been at odds with city officials over a variety of zoning and regulatory issues. The problems began when Weatherbee purchased a neighboring automobile lot in 2006 with the intention of expanding his business. Clermont officials threw numerous obstacles in Weatherbee’s way, including demands that he make expensive upgrades to the property.

Fed up, in 2009 Weatherbee posted a dozen signs on his property, all criticizing city officials. Several signs attacked Clermont’s city manager. Another criticized the local police chief. The common theme was that Weatherbee felt unfairly persecuted by the city government.

As if to prove his point, the city responded by declaring his signs a violation of city code, which require permits for any external signage posted on a commercial lot. The law exempts “political” signage—such as election posters—but not “non-commercial” signs like those displayed by Weatherbee. The city said it would fine Weatherbee $75 per day until he removed the signs. He refused and sued the city instead.

First Amendment Problems

On March 27, 2014, U.S. District Judge William Terrell Hodges issued a written decision partially invalidating Clermont’s non-commercial sign restrictions. Judge Hodges said the rules unconstitutionally discriminate against certain types of speech. For example, Clermont’s rules allow a business to display an unlimited number of business-related signs—say arrows directed customers to parking—but only one non-permitted sign containing a non-business message, such as a criticism of city officials.

While the city argued it had “aesthetic” and safety issues with unlimited non-commercial signage, Judge Hodges said the restrictions were not “narrowly tailored” to satisfy those concerns. The city must present actual evidence that its discrimination against Weatherbee’s signs is justified, rather than assert a broad interest in censoring his exercise of free speech.

Putting Things in Perspective

While Weatherbee and his auto dealership won this round in court, it is important to keep in mind that most local business regulations are constitutional. Courts afford local officials a wide berth in dictating what businesses may or may not do. That is why, if your small business needs advice on how best to deal with local government, you should contact attorney John S. Sarrett in Naples today.

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