Corra Daily Planet » 2007 » January

More People Out of Work Means a Wider Selection for Your Business

Wed, January 31st, 2007 - 12:03 pm - By Gordon Basichis

No Comments »

We saw this article on
Jobless Claims Rise To 16 Month High.

The number of Americans filing applications for unemployment benefits shot up last week by the largest amount in 16 months, reversing two weeks of big declines.

The Labor Department reported Thursday that 325,000 newly laid-off workers filed claims for jobless benefits last week, an increase of 36,000 from the previous week. That was the biggest one-week rise since a surge of 96,000 claims the week of Sept. 10, 2005, when devastated Gulf Coast businesses laid off workers following Hurricane Katrina.

The increase of 36,000 was bigger than the 20,000 rise that had been forecast. Analysts, however, cautioned that it is difficult to read the claims figures at this time of year because of unusually wide swings caused by the holidays and other factors.

Based on past trends, claims numbers often surge in third week of the month as retail businesses shed seasonal workers hired to help with the crush of holiday shoppers. However, this year, the layoffs were much higher than in past years.

The jump in jobless layoffs followed a string of reports showing the economy was performing at a better-than-expected pace at the end of 2006 and the beginning of the new year. Employers added 167,000 new jobs in December, helping to keep the unemployment rate at 4.5 percent.

Economists believe that while growth has slowed because of the steep downturn in housing, they expect the United States will be able to avoid an outright recession.

The 36,000 increase in layoffs followed two weeks in which jobless claims had fallen by a combined 36,000. The four-week moving average for layoffs, designed to smooth out the weekly volatility, edged up slightly to 309,250 from 207,750 the previous week.

For the week ending Jan. 13, a total of 33 states and territories reported an increase in claims before adjusting for seasonal variations while 20 states and territories reported declines in claims.

The increases were led by California, which saw jobless claims rise by 10,115, an increase blamed on higher layoffs in construction and service industries. Layoffs were up by 8,870 in Michigan and 6,418 in Texas.

The states with the biggest decline in layoffs were New York, down by 26,764; North Carolina, down by 10,072 and Georgia, down by 8.987.

The state data is not adjusted for seasonal variations.

Corra never likes to see reports showing more people are out of work. That and the increase in house foreclosures is always a bit depressing. Corra, like the rest of you, hopes for a robust, well educated workforce that will help build the American economy well through the twenty-first century.

But then, there are more jobless. That’s always the downside. The upside of the equation is that you and your businesses have a wider selection of job candidates. Choose carefully, for some may have merely been downsized and others may have been dismissed for other reasons. Even if it was during the downsizing of a company that may have been an excuse to get rid of the deadwood, the substance abusers, sexual harassment idiots, and even the office thieves.

So be smart when you are hiring from the job pool and conduct preemployment background checks on everyone you hire. You should most definitely run a criminal report. If someone has access to your proprietary information, you would do well to run a credit report. A Social Security Trace will help determine if someone has a valid SSN number and is in fact a legitimate worker. With the government starting to crackdown on those who hire illegal workers, you don’t want to be its bad example.

So be smart, and as Corra always says, check them out before you hire.

Does The Wrong Employee Have Access To Your Proprietary Information?

Tue, January 30th, 2007 - 2:51 pm - By Gordon Basichis

No Comments »

Keeping It Confidential

Making the most of your intellectual property when seeking investors means making sure it’s not compromised.


As mentioned in last month’s column, your approach to making the most of your intellectual property (IP) is one of the factors that potential investors and/or co-venturers typically consider when making a decision about whether or not to invest in your company. It is important to keep confidentiality in mind when dealing with potential investors and co-venturers.

Can you assume that information provided to a potential investor or co-venturer remains confidential? The answer is, pure and simple, no! Under most circumstances unless there is a contractual obligation to the contrary, they can use (and tell others) any information that you give them. And worse, in most cases if you disclose information to anyone that is not under an obligation of confidentiality, the “confidential status” of that information is lost not only with respect to that prospect but also with respect to everyone else.

How do you create this “obligation of confidentiality”? The best way is with a written confidentiality or nondisclosure agreement (NDA), although an oral agreement can sometimes be enforced (if you can prove there actually was such an agreement). Simply marking a business proposal “confidential” and sending it to a prospect does not work — this “proprietary legend” does not create an obligation of confidentiality. Likewise, sending the confidential information with a proposed confidentiality agreement for the prospect to sign is a dangerous proposition. You want a signed confidentiality agreement in hand before you provide any confidential information.

Do you always need a written agreement to establish an obligation of confidentiality? Not always, but the exceptions are rare, and most often do not apply to situations where you are seeking investors or co-venturers. For example, you can sometimes show that an obligation of confidentiality has been assumed by a prospect through your history of prior dealings with them (referred to as “course of dealings”). However, this can be extremely difficult to prove, and in any event, the precise extent of the confidentiality obligation is typically limited or uncertain without a definitive written agreement. An obligation of confidentiality with respect to certain types of information also can be imposed by law when certain specific relationships (such as attorney-client, employee or-employee, doctor-patient) exist.

It is extremely important to make sure that the actual terms of an NDA fit your particular circumstances. Not all NDAs are created equal. Some agreements require procedures that are impracticable when applied to the actual relationship between the parties. For example, an agreement that requires all protected confidential information to be identified in writing may be just fine for an arm’s-length relationship where all communications are carefully controlled (e.g. limited to documents sent by mail or overnight delivery), but totally inappropriate in a situation where the other party has representatives visiting your facility. Other agreements place artificial lifetimes on confidentiality (e.g.,”the information will be maintained in confidence for a period of one year from the date of disclosure”) that have no basis in reality and can, in practice, hobble the IP strategy of the typical business.

In general, to protect your confidential information it is desirable that all information disclosed be protected unless it is clearly not confidential and/or can be shown to fall within certain standard exceptions. For example, the standard exceptions include information, which is already known to the public at the time it is disclosed, or which is later made public (other than by fault of the party receiving the information).

Do you need an attorney to prepare a confidentiality agreement? You are taking a risk if you do not at least have an IP attorney give the confidentiality agreement his or her blessing. There are a lot of “form” confidentiality agreements floating around. Many versions are available for download through the Internet. (In fact, I include a number of sample confidentiality agreements in my IP Tools product). The issue is whether the specific terms of a particular generic agreement fit your circumstances. It may or it may not. Do you want to deal with the consequences if the agreement is inapplicable in to your circumstances or does not cover all of your bases? I suggest that you do not. You are typically best served by having the agreement reviewed by IP counsel.

What if a prospect refuses to sign a confidentiality agreement? Many professional investors (such as venture capitalists and sophisticated angels) and large companies (potential co-venturer or licensee) are reluctant, at least initially, to sign confidentiality agreements. They tend to be concerned that they may be considering an investment in a competitive company, or have ongoing independent research on the same subject as your submission. They are afraid that they will end up in litigation if they decline to do business with you, and instead invest in the competitor or continue with their independent research.

As a practical matter, to proceed in the face of that attitude, you simply assume that “anything you say can and will be used against you.” You have to take a calculated risk — the risk that the prospect will “appropriate” everything that you disclose to them — but that risk can be minimized. Patent applications can be filed (if appropriate) before you contact the prospect. Information can be provided in stages. You do not disclose any information that is truly sensitive in your initial communications. In many instances, if the potential investor or co-venturer is sufficiently interested to take the next step, and disclosure of sensitive information is required, they are at that point willing to enter into a confidentiality agreement. If they are not, you can choose to take another calculated risk, or terminate the discussions.

Corra thinks this is a terrific article about the ins and outs of intellectual property and proprietary information. The article shows the pitfalls and vulnerabilities as well as the value attached to bartering your intellectual property with other companies and their intellectual properties.

What the article does not point out is that much abuse and theft comes from within your own company. Employees who are not carefully scrutinized often have access to intellectual property and proprietary information, like credit card databases and client contact lists. There are more than a few incidents where a business was seriously compromised by an integrity challenged employee stealing valuable proprietary information or intellectual proprietary and selling it to a rival company.

That is why Corra recommends that you run pre-employments screening on all job candidates, and periodic screenings on current employees. Besides a criminal background check, we recommend a credit report, especially for anyone who has access to proprietary information and intellectual property. People who have serious credit problems are often more susceptible to the pressures of those who are willing to pay for such sensitive information. We recommend a Social Security Trace, to validate the social security number and verify that the the number actually belongs to your job candidate. Education verification is also a good idea. It helps make sure those with access to sensitive data are qualified to use it.

As Corra says, check them out before you hire.

Jury Duty Scam Can Cost You Your Identity

Mon, January 29th, 2007 - 11:35 am - By Gordon Basichis

No Comments »

We received this from a friend who had pulled it from the FBI Website.

Washington, D.C. – The FBI today is providing a warning to the public against an ongoing scheme involving jury service. The public needs to be aware that individuals identifying themselves as U.S. court employees have been telephonically contacting citizens and advising them that they have been selected for jury duty. These individuals ask to verify names and Social Security numbers, then ask for credit card numbers. If the request is refused, citizens are then threatened with fines.

The judicial system does not contact people telephonically and ask for personal information such as your Social Security number, date of birth or credit card numbers. If you receive one of these phone calls, do not provide any personal or confidential information to these individuals. This is an attempt to steal or to use your identity by obtaining your name, Social Security number and potentially to apply for credit or credit cards or other loans in your name. It is an attempt to defraud you.

If you have already been contacted and have already given out your personal information, please monitor your account statements and credit reports, and contact your local FBI office. Local FBI field office telephone numbers can be found in the front of your local telephone directory or on For further information, please review the warnings posted on the U.S. Courts website at, “Newsroom” news article “WARNING: Bogus Phone Calls on Jury Service May lead to Fraud,” August 19, 2005.

This posting is from an excellence source, the Federal Bureau of Investigation. Corra believes it’s fair to say few would have their proverbial thumbs on the pulse of identity theft like the FBI. As the article reports, it is simply a matter of someone seizing your social security number and date of birth, and they are off and running.

If you are a victim of identity theft you can spend many months, maybe years cleaning up the mess someone else made with your finances and credit. It is humiliating and debilitating, and often very expensive.

Corra recommends you run your social security trace every so often to see if you have a new partner using your social security number. Often it may be an undocumented worker merely using your number to pose as a legally eligible worker. And then sometimes it is someone who has stolen or planning to steal your identity.

In addition to the Social Security Trace, we recommend your run your Credit Card Report. You can also run a comprehensive background check on yourself to see if someone else is associated with your business.

Remember, your identity is your name, words and reputation. Don’t let someone else steal it away.

Drug Testing Job Candidates Can Keep Business Costs Down

Fri, January 26th, 2007 - 5:15 pm - By Gordon Basichis

No Comments »

We saw this article on

In Praise of Drug Testing

Posted by Mike Hofman

Just days before the Super Bowl, the National Football League and the players’ union agreed to a plan for more extensive drug testing, and for larger fines for players who fail tests, ESPN reports. The move can be read as an effort to prevent the NFL from facing the same kind of troubles that Major League Baseball has faced over steroids and other performance-enhancing drugs. The NFL’s testing regime, which the union ratified, will test more players per week, meaning that more tests will occur throughout the course of a year. The tests will also be conducted in a random fashion, so that players can’t plan their drug use around predictable tests.

Of course, testing for steroids in sports is very different from testing for illegal drugs in the workplace. But still, when I heard about the NFL and players’ union coming together to endorse a new plan, I recalled a column that Norm Brodsky wrote in Inc. in November 2004. In that column, Norm said that reluctantly, his company had begun drug testing.

“We’d heard rumors about marijuana being bought and sold on our premises. We’d also seen a marked increase in petty theft and minor accidents, which I suspected was related to drug use,” Norm wrote. “People were running forklift trucks into walls and dropping skids of boxes onto the floor as they were being moved from one spot to another. Items would disappear from the shipments of goods that we kept in the warehouse for customers of our trucking business. I couldn’t blame all of the problems on drug use, but I felt certain that it was a contributing factor.”

“Still, I hesitated to start drug testing… I had reservations about punishing people for doing something I’d also done at their age. In addition, I knew that drug testing could result in our having to let some employees go — maybe even some good, long-term employees — at a time when the growing labor shortage was making hiring increasingly difficult. That seemed likely to cost us a substantial amount of time and money — not to mention emotional anguish — over and above the cost of the testing itself. But I eventually decided that we had to go forward anyway, mainly because of the accidents. No one had been seriously injured, but I knew our luck would run out sooner or later.”

So, with ample warning to his employees, Norm started drug testing. The results of the first test were stunning: half of his workers failed. Read his column (here’s the link) to find out what happened next.

In the meantime, what do you think? Do you conduct drug testing at your company? Do you think that the NFL’s idea of hitting an athlete’s wallet following a failed drug test is sound? If employees fail at your company, what are the consequences for them?

Corra believes drug tests can be useful to certain employers. Substance abuse in the workplace does lead to 300% more in medical costs and benefits. So in addition to your criminal background check, social security trace, and credit report you may want to consider testing your job candidates for illicit drugs.

Remember, as Corra advises, check them out before you hire.

Next Page »