Overstock.com 2009 Annual Report Download - page 18

Table of Contents
these risks. In connection with such litigation, we may be subject to significant damages or equitable remedies relating to the operation of our business and the
sale of products on our Website. Any such litigation may materially harm our business, prospects, results of operations, financial condition or cash flows.
These and other types of claims could result in increased costs of doing business through legal expenses, adverse judgments or settlements or require us
to change our business practices in expensive ways. In addition, litigation could result in interpretations of the law that require us to change our business
practices or otherwise increase our costs.
Additional litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and
scope of the proprietary rights of others. Any litigation, regardless of outcome or merit, could result in substantial costs and diversion of management and
technical resources, any of which could materially harm our business (see Item 1A—"Risk Factors").
See the information set forth under Item 15 of Part IV, "Financial Statements—Note 16—Commitments and Contingencies, subheading Legal
Proceedings," contained in the "Notes to Consolidated Financial Statements" of this Annual Report on Form 10-K.
Government Regulation
Our services are subject to federal and state consumer protection laws including laws protecting the privacy of consumer information and regulations
prohibiting unfair and deceptive trade practices. In particular, under federal and state financial privacy laws and regulations, we must provide notice to
consumers of our policies on sharing non-public information with third parties, must provide advance notice of any changes to our policies and, with limited
exceptions, must give consumers the right to prevent sharing of their non-public personal information with unaffiliated third parties. Furthermore, the growth
and demand for online commerce could result in more stringent consumer protection laws that impose additional compliance burdens on online companies.
These consumer protection laws could result in substantial compliance costs and could interfere with the conduct of our business.
In many states, there is currently great uncertainty whether or how existing laws governing issues such as property ownership, sales and other taxes, libel
and personal privacy apply to the Internet and commercial online services. These issues may take years to resolve. In addition, new state tax regulations may
subject us to the obligation to collect and remit state and local taxes other than for sales within the state of Utah (where our operations are located), or subject
us to additional state and local sales and income taxes. New legislation or regulation, the application of laws and regulations from jurisdictions whose laws do
not currently apply to our business or the application of existing laws and regulations to the Internet and commercial online services could result in significant
additional taxes on our business. These taxes could have an adverse effect on our cash flows and results of operations. Furthermore, there is a possibility that
we may be subject to significant fines or other payments for any past failures to comply with these requirements.
Employees
As of December 31, 2009, we had approximately 1,300 full-time employees. We seasonally augment our workforce with temporary employees during
our fourth quarter to handle increased workload in both our warehouse and customer service operations. We have never had a work stoppage, and none of our
employees are represented by a labor union. We consider our employee relationships to be good. Competition for qualified personnel in our industry has
historically been intense, particularly for software engineers, computer scientists, and other technical staff.
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