While in college, three sorority sisters decide that after graduation, they want to establish a business. Each is an MBA student but with different concentrations. Catherine is earning her MBA in Management, Charlotte in Finance, and Caprina in Marketing. While at a local bar one evening after taking a legal environment of business final exam, they become intrigued by a particular idea. After conducting the appropriate market research and seeing the idea as viable, they settle on owning and operating a women-owned distillery. They are adamant about maintaining creative and management control throughout their involvement with and ownership of the enterprise. As one put it, "the smaller the better.\" Among their goals is the ability, as owners, to grant management decisions to Catherine, whose MBA will be in Management, while permitting the others to concentrate on developing business ideas. Equally important, they would like to have a business structure that (1) gives them optimal tax benefits, (2) protects their personal assets from liability, (3) allows them to collectively retain a majority of ownership as they {4) attract investors. To that end, the four aspiring business owners sought the advice of a local business attorney, and within six months of graduation, they formed their business known as CSweet Distillers and Brewers, using the first letter of their names and as a nod to their being the chief executives, and they establish the business in Atlanta, Georgia. 1. Based on the businessobjectives Catherine, Charlotte, and Caprina have, what is the best business structure for them? 2. What two steps must be taken by the owners to legally effectuate their business structure? After establishing CSweet Distillers ond Brewers, the owners realize the need to hire sales personnel to achieve distribution goals in select upscale hotels and vacation resorts. Ultimately, the owners would like to have a line of their spirits available for purchase via a subscription-based website and to operate micro-breweries near college campuses. C-Sweet had its attorney draft a standard agreement for use with its employees and independent contractors. STUDENT No- Dl'TE. l' .I' 7 In the agreement, the attorney included four (4} distinct clauses. First, the agreement prohibited its employees from starting or working for any business \"selling or providing services the some or similar to those provided by C-Sweet Distillers and Brewers within the territory where the employee is working at the time of termination.\" Second, employees were prohibited from \"copying, reproducing, duplicating, or disclosing any processes, formulas, or compilation of information with inherent economic value to and kept secret by the company. Employees understood that any violation could subject them to criminal and civil penalties. Third, sales staff would be given a license to use any company trademark or service mark in connection with their jobs and they would qualify for generous commissions on sales. Lastly, the agreement noted that, unless there is a separate agreement focusing specifically on the subject, all inventions, discoveries, or other creations by an employee would be deemed the property of the company. 3. Which clause(s] in the employment agreement is/are a restrictive covenant clause? 4. What elements are needed for the clausels} to be enforceable against any employee? Be sure to identify the type of restrictive covenant discussed. The CSweet executives are concerned about the fair treatment of its workforce. As evidence of their commitment, the company maintains a vibrant compliance program and has a very strong internal reporting procedure it developed in reliance upon advisory opinions issued by the Equal Employment Opportunity Commission. One of its recent hires at one of the micro-breweries near Recrem College, their alma mater, believes he is being subjected to unwelcome advances by the female manager of the brewery. He has asked his manager to stop with the suggestive comments and inappropriate touching, but has not utilized the company's internal procedures. Instead, he files a charge of sexual harassment with the EEOC. 5. What steps Wlll the EEOC take to address this charge of harassment? 6. What defensels) if any would CSweet be able to assert? Recently, the owners took inventory of their assets, including their intangible personal property. Included in this inventory is the unique formula developed, called Distimulation, which was designed to stimulate a change in movement, humidity, temperature, and elevation that would create exotic colors and tastes for bourbon. They also have a device called The Distimulotor they created to produce the process. Their development would give them a distinct economic advantage In the market. Also, the company listed its podcast called DistiLadi'es, and a documentary it commissioned with the help of one of the company's employees, Phil M. Akers, who also has a degree in filmmaking. Phil has been instrumental in helping produce and develop the documentary through his company called PhilMAkers, LLC. 7. Describe what ownership rights, if any, C-Sweet has in the documentary and how those rights are protected. 8. What type of protection could C-Sweetobtain for its Di'stfmulator device, and with what government agency would the company seek to obtain its protection? N.G. Neer, one of the company's regional salespersons, signed the standard employment agreement drafted by the C-Sweet attorney. The company has recently learned that Neer, who lives in North Carolina, has established a separate business and, in this business, has begun to use the CSweet distimulation process in discussions with potential investors for his business. CSweet wants to file a legal action to prevent Neer from using the disturnulat ion process. In addition, at times, Neer has used FedEx to correspond with these investors. 9. Describe what conditions must exist for C-Sweet to enforce the agreement itself against N.G. Neer's use of its formula. 10. What type of legal relief would C-Sweet seek and in what court would it bring its action