How Can I Protect My Business from Whistleblower Lawsuits?
Federal and state laws often encourage employees to report violations of labor, environmental, and/or public safety laws when they occur. An employee who witnesses or has evidence of wrongdoing or waste while employed and who makes a good faith report of the wrongdoing or waste, verbally or in writing, to one of the person’s superiors, to an agent of the employer, or to an appropriate authority is a whistleblower. Federal and state laws protect employees from facing retaliation for making complaints against their employer. Employers should understand what a whistleblower complaint entails and what to do when faced with a such a complaint.
The Occupational Safety and Health Administration (OSHA) handles complaints from whistleblowers who allege violations of worker safety, food safety, and securities laws. Typically, an employee may report that the employer is violating an OSHA safety regulation involving safety of the public or the worker. Some whistleblower actions involve OSHA violations.
The Sarbanes Oxley Act of 2002 also provides several means of protection to employees who complain of violations of federal securities laws, such as wire, mail, securities, and bank fraud. State laws involving discrimination, harassment, family and medical leave, and wage and labor laws are also another source of whistleblower protection. Retaliating against an employee, such as an action to demote, terminate, or make any other changes that impact their employment, because that employee raised an issue qualifying under the Whistleblower law is prohibited.
Protecting a Business from Whistleblower Complaints
The best way to avoid whistleblower complaints is to follow state and federal laws. While it seems so simple, actively working to ensure compliance with labor, safety, regulations, and statutory law is the easiest way to avoid a Whistleblower claim. Companies should actively create compliance protocols, implement those policies effectively, and evaluate the effectiveness of those policies on a regular basis. Companies operating in health care, financial, and government contracts are more vulnerable to such actions. It is also vital to develop a means by which employees can come forward to report any violations internally, so you have an opportunity to address the issue directly and correct any errors. When establishing internal policies to receive reports of waste and wrongdoing, you must ensure that employees will not face retaliation for coming forward.
Employers should also have a system by which employee complaints are handled so that an employer can verify claims and address any issues. Employers should carefully document all evidence, witness statements, and other
records and findings. If there is a government investigation, having all necessary documents to prove or disprove claims can be easily made.
Even if an employer suspects that an employee has not made a legitimate complaint, you are prohibited from retaliating against that employee, or you can be found to violate their rights. Yes, even when the report is false or fabricated. Do not terminate or make decisions that negatively impact an employee’s terms and conditions of employment. Other actions, such as reprimanding the employee, excluding them from meetings, reducing their working hours, or denying a promotion may all be construed as retaliatory.
What Should I Do When a Complaint has Been Launched?
When you receive a complaint from an employee regarding waste or wrongdoing, even if you believe it to be frivolous, you should look into the complaint in an objective manner in compliance with your internal investigation procedures.
When faced with a government investigation, a business must deal with the allegation and handle the whistleblower appropriately. The best way to avoid whistleblower actions is through knowledge of applicable federal and state laws, as well as creating compliance and regulatory mechanisms that ensure that the company adheres to their best practices. However, mistakes can happen that trigger an investigation by a federal or state agency. When they do, consulting with counsel about next steps and following solid advice is strongly recommended.
If you need legal guidance regarding regulatory and compliance practices, contact the legal team at MacMain, Connell & Leinhauser. We provide a full suite of employment-related representation, including reviewing employer policies to minimize litigation exposure. For an initial consultation, contact us online or call 484-318-7106. Located in Pennsylvania, we serve clients throughout Chester County, Philadelphia, and New Jersey.
Resolving Workplace Conflicts
Workplace conflicts are inevitable. Almost 85 percent of employees experience conflicts in their workplace. Conflicts can lead to positive outcomes if management learns to resolve them with efficacy. When conflicts are dealt with quickly and effectively, they can be converted to greater understanding amongst employees, better solutions to problems, and even innovation and creativity. When management fails to act immediately, employee morale is lowered and productivity diminishes. Therefore, conflict resolution in the workplace is of utmost importance for a company’s bottom-line.
Conflicts occur in the workplace due to various reasons. Employees have to deal with different personalities, management styles, stress, discrimination, poor or differing styles of communication, and performance issues. Recognizing and understanding the different sources of conflict may be the first step toward a resolution.
Managers come with various personalities and management styles. One manager may tend to micro-manage and control minute details of an employee’s work, while others may be too hands-off, leaving the employee in the dark as to what is required. Balancing a manager’s style with an employee’s needs is critical to creating a greater understanding of what may be required to complete the work at hand. Company policies should emphasize communication and accountability, as well as clearly define roles and expectations.
Conflicts can also arise when different departments do not follow deadlines or project requirements. Each department may be dependent on another department’s ability to fulfill their tasks in order to complete its own. Managers can play a critical role in avoiding such conflicts by delegating tasks clearly and ensuring that deadlines are being met along the way. Managers can also create incentives to ensure teams are motivated to complete their tasks on time, while also ensuring that teams are held accountable when they fail to meet requirements.
Workplaces include individuals from different backgrounds, cultures, and socio-economic status. Diverse populations have differing and unique ways of approaching problems and people. Employees may have different styles in communicating and tolerances for others’ behavior. In these instances, managers should learn to listen to everyone’s grievances and empathize, sympathize, and communicate with sensitivity to address these conflicts in an equitable, equal, and uniform way.
Employees have to deal with different types of stress in the workplace. Employees may experience stress at work because they are being overextended, harassed, or discriminated against. Stress can cause resentment and lack of focus, leading to a decrease in productivity. Managers should identify the source of stress an employee is experiencing. This begins with first listening to the employee’s concerns with empathy and involve the Human Resources department if the stress is related to discrimination or harassment. If the conflict is due to lack of resources, managers need to address the issues immediately with flexibility and openness so that an equitable solution is reached.
What can Managers Do to Resolve Conflicts?
Managers can resolve conflicts that arise and improve outcomes when they focus on issues. First, a manager should actively listen to the employee’s concern to identify the issue. After recognizing the issue at hand, take immediate action by clearing up any misunderstandings between employees and facilitating open discussions. Also, managers can help resolve ensuing conflicts by reframing them in a positive light. Instead of referring to the issue as a conflict, a manager can reframe it to be a discussion or problem-solving session, turning the focus away from the conflict and toward open communication and resolution. A manager can also assist in conflict resolution by requesting workers propose solutions to the problems they are facing and mediate between them to reach a consensus.
The legal team at MacMain, Connell & Leinhauser help clients with labor relations and employment law-related issues. For more information, contact us online or call us at 484-318-7106 for an initial consultation. Located in West Chester, Pennsylvania, we serve clients throughout Philadelphia, Chester County, and New Jersey.
Small and Mid-Sized Businesses Should Seek Counsel From Attorneys When Faced With Legal Issues or Lawsuits
When faced with a legal issues, small business owners have a lot on their plate. With limited funds, employees, and customers, small business owners are often in a position where the cost to fight legal battles is beyond what the budget will allow. However, it is inevitable that a small business owner will face legal challenges at some point. Therefore, it is necessary to be cognizant of the issues and have a plan in place to tackle a lawsuit.
Never Ignore a Lawsuit
First and foremost, do not ignore a lawsuit or a potential suit. When any legal document is served upon a business or a letter from an attorney threatening suit arrives, there may be a tendency to forget about it hoping it will go away. However, legal documents, such as complaints when not responded to in a correct fashion, can create more problems. When served with a legal document, it is essential to prioritize it by thoroughly reading the allegations and contacting an attorney immediately. Also, when a threat of a lawsuit arrives, it may be the first, and in come cases the best, opportunity to eliminate exposure caused by the threatened litigation.
Cultivate Relationships with Lawyers
Ideally, before confronting a lawsuit, the business should have an attorney that works for the business either on payroll or a retainer so that they can be contacted immediately. The attorney should be knowledgeable of business operations, culture, and management so that they can quickly acquaint themselves of the issues and formulate a response. Most small businesses may not have a lawyer on retainer or payroll. Therefore, it may be necessary to rely on referrals from other businesses, friends, and family to request a legal consultation. It is very important that the owner seek legal counsel and follow expert legal advice when responding to a lawsuit or threat of litigation.
Contact an Insurance Agent
Some business owners may already have business insurance that provides coverage for business-related lawsuits. Employment matters, errors and omissions coverage, cyber liability, and general liability coverage are among coverages that should be considered. It is crucial to provide notice of the lawsuit so that the insurance company can act on the business owner’s behalf. Often, when coverage is triggered, the insurer will appoint an attorney to defend the lawsuit.
Types of Lawsuits Faced by Small Business Owners
Small business owners can be sued by their employees, customers, competitors, or even by state and local governments. It is important to know the type of lawsuit one is facing to retain the appropriate attorneys. From employment litigation to intellectual property litigation, practice types can vary, and it may be necessary to consult an attorney that has specific expertise required for a specific lawsuit.
Contract-Based Lawsuit. Small business owners may face a lawsuit from a disgruntled vendor, supplier, or customer. Businesses operate on the basis of various contracts and agreements. Failure to abide by contract terms can be the basis of a lawsuit. When preparing contracts, it is a good idea to make sure that the terms are spelled out in writing and that both parties agree to the terms. This can avoid issues going forward.
Employment-Related Lawsuit. Employees may sue small business owners for employment-related issues, such as discrimination, harassment, and missed wages. Businesses should be aware of federal and state laws regarding these issues and it is essential to have Workers’ Compensation insurance for work-related injuries. A review of policies regarding overtime pay, harassment and anti-discrimination, and termination or disciplinary procedures are all important preventative measures small businesses should undertake regularly.
Intellectual Property Rights Violations. Small business owners may also face a lawsuit for violating intellectual property rights, such as the usage of a competitor’s trademark or patent, or copyrighted work without a license.
Personal Injuries. Personal injuries on the premises of a business are also cause for a lawsuit. For example, someone may slip and fall, or an object may fall on them due to a defect on the premises resulting in injuries.
The legal team at MacMain, Connell & Leinhauser serves as general counsel to businesses of all sizes and provides a wide range of services for small business owners. If you need legal counseling regarding business formation or defense of a lawsuit, we can assist you with daily compliance, employment, and human resource matters, as well as litigation representation. For more information regarding these services, please contact us online or call us at 484-318-7106. Located in West Chester, Pennsylvania, we serve clients in and around Philadelphia, Chester County, and across Pennsylvania and New Jersey.
How Can I Avoid Breach of Fiduciary Duty?
Fiduciary duty is legalese for certain duties owed by two or more persons who are party to a legal relationship. Doctors, real estate agents, attorneys, business partners, corporate officers, and board members typically have fiduciary duties toward their clients, partnerships, and corporations. In these relationships, the fiduciary is the individual who acts in the best interest of the principal or beneficiary.
In a doctor-patient relationship, the doctor is the fiduciary and must act in the best interests of the patient. Similarly, directors of a corporation are fiduciaries and must act in the best interest of the corporation. State and federal laws can also define fiduciary duties for specific relationships. The following are different types of fiduciary duties:
Duty of loyalty. This duty requires the fiduciary to be loyal to the beneficiary of the relationship. This means they must act in the best interests of the beneficiary without self-dealing or toward a personal benefit in conflict.
Duty of care. This duty requires the fiduciary to meet the standard of care set for their profession and perform their duties in a reasonably prudent manner. One must also ensure that they actively participate in making careful and informed decisions.
Duty of honesty. A duty of honesty requires the fiduciary to be completely honest and fully disclose any conflicts of interest. For example, a real estate agent has a duty to loyally represent the client in a real estate transaction and should not self-deal or have a conflict of interest. In a scenario where there may be a conflict because the agent represents both the buyer and seller, the agent should fully disclose the conflicting relationship and obtain consent for moving forward with the relationship from both parties.
Duty to Act in Good Faith and Fair Dealing. This duty requires that neither party will act in a manner to prevent the other party from receiving the benefits of the contract. This duty requires that both parties do everything expected of them in the relationship and the contract to accomplish its purpose. This duty also prevents parties from interfering with others’ performances.
How to Prevent Breach of Fiduciary Duty
Breach occurs when the fiduciary fails to uphold the obligations of the implied or enumerated duties, such as a breach of trust, failure to uphold financial obligations, or act in the best interests of the beneficiary. The party accusing the breach must prove that a fiduciary duty existed and that it was breached. The best way to prevent breach of fiduciary duty is to make sure there are company-wide policies regarding fiduciary duties and no tolerance for violations and self-dealing. It is also important to create best practices to prevent violations. The following suggested practices may minimize the risk of such violations:
- Ensure that one is aware of their duties and obligations in the relationship.
- If there are any issues in the relationship, address them immediately.
- Avoid conflicts of interests and the appearance of impropriety.
- Document all actions and decisions taken in the course of the relationship so that any doubts about the standard of care provided can be evaluated thoroughly.
Consequences of a Breach and Defense
When fiduciary duties are breached, legal actions may follow. The fiduciary may have to step down from their role in the company or business and pay monetary damages. Professionals, such as doctors and lawyers, may risk losing their license to practice. A common defense for those facing legal action based on breach of fiduciary is the business judgement rule that protects fiduciaries from legal action when their actions indicate that they acted with due diligence and reasonableness.
The legal team at MacMain, Connell & Leinhauser helps clients involved in conflict of interest and breach of fiduciary duties. For cost-effective and forceful representation, please contact us online or call 484-318-7106 for an initial consultation. Located in West Chester, Pennsylvania, we serve clients throughout Philadelphia, Chester County, and New Jersey.
Common Hurdles Faced by Small Business Owners
Small business ownership is risky as many small businesses fail. Knowing what hurdles to overcome and understanding common pitfalls can help owners avoid any negative consequences and ultimately help them flourish. The following are common hurdles that small business owners potentially face when maintaining their business:
A business needs initial capital to get started, as well as a constant cash flow to continue operations. Sometimes, unforeseen circumstances, such as the current pandemic, can create a shortage of capital. Small business owners need to have contingency plans in place for generating cash to keep their businesses going. It is important to keep in mind that a large initial investment may not always be a good idea, as this may lead to mismanagement of funds and waste. Keeping operations lean may be a good way to minimize waste and focus on the main business goals.
Nevertheless, no matter how lean operations are, emergency situations and unforeseen circumstances are part of owning a business. Sometimes, the sudden need for cash arises. If a business owner is unable to secure funding in a timely manner, they risk losing the business. Business owners must utilize all means of securing capital and explore alternative methods of doing so, such as crowdsourcing. Lately, crowdsourcing apps and other fundraising platforms on social media sites have increased; other potential sources include grants from various organizations, local governments, and entities designed to serve small business owners.
A business cannot grow without customers. It is important to provide products and services that are of highest quality that meet and exceed standards. Customer reviews can generate new customers and utilization of social media outlets can be a cost-effective method of generating additional business. Other avenues for reaching new customers include using social media advertisements on Facebook and Google. Once customers purchase a product or service, a business can save costs by converting them into a long-term purchaser and building their brand loyalty. This can be achieved by providing rewards, membership benefits, and premium services.
For a business to succeed, it needs workers that are skilled and customer conscious. A business owner should provide leadership and strive to create a positive work environment that prevents a toxic work culture through policies that are equitable, and merit based. By offering competitive salaries and benefits, owners can ensure employee loyalty, retention, and a good work ethic.
Having an organized manner of accounting of all company financials is of utmost importance to monitor a company’s financial health. Utilizing invoicing and accounting software to keep track of payments and disbursements can provide a seamless way of tracking outstanding revenue. Furthermore, accounting software can increase awareness of company expenses so that actions can be taken to minimize wasteful practices.
Owners must comply with federal and state regulations regarding employment and other taxation. Misclassification of employees or harassment complaints can lead to fines and lawsuits. Owners will have to divert financial and time-management resources to fight these battles. It is crucial that owners know and understand regulations and have compliance practices in place.
Small business owners are most vulnerable in a crisis; if an owner is not disciplined with their finances, they may risk losing all their investments. The legal team at MacMain, Connell & Leinhauser aids on a wide range of services related to small businesses, including ongoing operations and day-to-day compliance requirements. For more information regarding these services, please contact us online or call us at 484-318-7106. Located in West Chester, Pennsylvania, we serve clients throughout Philadelphia, Chester County, and New Jersey.
How Can I Promote Allyship for My Business?
When companies decide to create a workplace culture that is more inclusive and diverse, they cannot do so overnight. A workplace ally is an individual who will step up and support a colleague who is marginalized to make sure that colleague is heard and seen. Often, allies are individuals who do not simply assume that preventing discrimination in the workplace is about their own behavior, they see it as their responsibility to elevate those around them by encouraging systemic changes in behavior. Allyship requires one to constantly evolve through self-awareness, as well as pay attention to behaviors that are discriminatory and utilize tactics to improve conduct. The following tactics can increase allyship in the workplace:
Give credit where credit is due. Often, marginalized individuals in the workplace are not given credit for their ideas or opportunities to share them. An ally can implement strategies in meetings whereby contributions are encouraged. Doing so creates a level playing field so that good ideas are given their due credit. Additionally, this allows those who are usually quiet an opportunity to present their views.
Be respectful. Being respectful to others’ identities, roles, and time is a great way to increase allyship. Usage of irrelevant and vague verbiage perpetuates stereotypes. Becoming aware of the language used to describe colleagues and refraining from using common tropes about women, the disabled, LGBTQ+ individuals, and minorities can lead to self-awareness and expose innate biases. Additionally, taking the time to listen with empathy can create a more inclusive workplace.
Provide mentorship. Allies are often in a position of power or privilege. Utilizing this privilege to mentor or uplift another can boost inclusive company culture. One can use his or her position to advocate, introduce, or recommend a marginalized colleague during employee performance evaluations for promotions and pay increases.
Confront bad behavior. Allies can also intervene when they see a colleague being harassed or discriminated against. Allies can defuse a tense situation by confronting the harasser, and offer support to the harassed, call for others in the company to intervene, or take the time to follow up and show their support. Creating a harassment-free culture in a company starts with encouraging efforts, such as listening with empathy and non-judgement. Allies can use tactics, such as directly intervening when bad behavior is occurring and speaking up when others engage in more subtle remarks that are prejudicial by gently creating awareness of the underlying prejudice and shedding light on each other’s microaggressions.
In order to encourage allyship in the workplace, it may be a good idea to create tools and tactics that help employees recognize and prevent discrimination, harassment, and microaggressions. A company benefits when it creates a safe workplace where all employees can be productive and good ideas can flourish.
The legal team at MacMain, Connell & Leinhauser provides training services and employment seminars, as well as human resource counseling for businesses. Prevent costly litigation by training your employees on harassment, discipline, and other human resource issues. For more information regarding these services, please contact us online or at call us at 484-318-7106. Conveniently located in West Chester, Pennsylvania, we serve clients throughout Philadelphia, Chester County, and New Jersey.
When Should Small Businesses Engage an Attorney?
Small business owners often have limited financial resources. Start-up costs can be overwhelming, and owners must weigh competing priorities in which they invest their limited resources. It may be tempting for owners to forego seeking legal advice or retaining an attorney. However, legal counsel can provide critical advice on many key aspects, including business formation, trademark registration, securing patents, contract negotiations, employment contracts, business immigration, and employment law issues.
Considerations for Small Businesses
Small business owners should evaluate the nature of their businesses to determine whether legal counsel is necessary. For example, if the business is a sole proprietorship, an attorney may not be necessary for all matters, but it is vital to determine the issues that need legal attention. For the formation of an LLC or a partnership, the Secretary of State will have the necessary forms available to form the business organization desired. If one needs to determine which business formation is best suited for the business and its goals, it is advisable to consult an attorney to determine the type of entity that should be created. The formation of a corporation is more complicated and requires additional steps to maintain legal status in which legal counsel is advisable.
Small business owners must also determine how to comply with government regulations, wage and hour requirements, and to monetize their know-how. Consulting with counsel prior to making decisions can avoid larger legal bills for the company down the line and provide piece of mind for business owners. There are many legal considerations for small business owners to navigate in order to run a successful business. Many of the following legal issues may require an attorney:
Business Formation: When a business requires investments from several investors or has multiple partners, the business structure and formation will be more complicated than a straightforward sole proprietorship or partnership. An attorney can draft and negotiate investor and partnership agreements. Additionally, an attorney can evaluate the needs of the owners against the pros and cons of each type of corporate structure.
There are advantages and disadvantages to each, as one type of formation does not suit all business needs; some may offer more protection from liability. In exchange for protection from liability, corporations require adherence to formalities. If a business fails to fulfill the required formalities, the corporate veil that protects it from liability can be pierced causing legal exposure to the owners. An attorney can help business owners navigate the corporate formalities to avoid the risk of exposure.
Contract Negotiations: In order to conduct business, owners need to engage in relationships with investors, partners, clients, customers, employees, and third parties, such as vendors and suppliers. All relationships need to be governed by contracts. An attorney can draft and negotiate various contracts a business owner needs.
Contracts must be written with clarity, outline expected conduct from each party, and lay out terms of the contract so that each party is certain of what is required. Often, contracts may not lay out the specific issues a business will face. An attorney can evaluate the unique needs and challenges of the business to ensure that the contract terms adequately meet those needs.
Employment: Business owners need to be cognizant of laws protecting the fair treatment of their employees. There are laws dictating fair pay for overtime work, equal treatment, occupational safety, and payment of employment-related taxes. Employees need to be properly classified; an owner may not misclassify an employee as an independent contractor. An employer should also consult with an attorney when terminating an employee to ensure that they have appropriate policy statements and employment contracts that cover issues related to protecting business confidentiality, competition, and ownership rights.
Owners may also need to hire foreign employees with special expertise. An attorney experienced in business immigration and employer sponsorship of foreign workers can provide counsel regarding the work visas required and help with filing applications on behalf of the owners.
Securing Intellectual Property Rights: A company has intellectual property rights that can be trademarked. A business may be developing a product that may be entitled to a patent. Often, a business may be developing a product that may already be patented by a competitor. Knowing that another company already has rights to the product or technology before investing time and money in development can save costs. A business can instead try to license the right to manufacture or develop the product.
There are also copyright laws in all expressions, literature, and other material that a business produces. There may be trade secrets in recipes or other methods. An attorney can advise the owners by helping them identify all the sources of intellectual property the business has to leverage and protect them. Also, an attorney can help a business identify whether it is violating another company’s intellectual property rights so that the owners can limit or eliminate exposure.
Litigation: When faced with a lawsuit, it is important to consult an attorney immediately. When served with a complaint, there are limited time periods in which to respond. Failure to respond on time can severely affect one’s rights. If owners already have an attorney that has been handling their daily business operations or working with them, that attorney will be better prepared to handle the litigation.
Cultivate Relationships with the Legal Community
Small business owners should not underestimate the serviceability of loyal and dependable counsel to enhance their business. Your legal counsel should understand your business, work to enhance its operations, and guide you to avoid pitfalls as your business grows. Along with accountants, insurance providers, and tax consultants, businesses should retain and cultivate relationships with legal professionals. An attorney that works with the business from the start has a greater understanding and institutional knowledge that can be invaluable when it comes to negotiating on its behalf, as well as identifying risks and opportunities.
The small business attorneys at MacMain, Connell & Leinhauser provide well-rounded representation. Our experienced attorneys understand the special needs of small business owners and will take the time to listen and offer practical advice in a cost-effective manner. For an initial consultation, contact us online or call us at 484-318-7106. Located in West Chester, Pennsylvania, we provide legal services throughout Philadelphia, Chester County, and New Jersey.
How Can My Small Business Address Issues Regarding COVID-19?
Owning and operating a small business can be exciting and financially rewarding. Many entrepreneurs enjoy independence, control, and opportunity for financial gain. Rewards come with risks, however, and the current COVID-19 pandemic has exposed small businesses to unforeseen difficulties and challenges. Over the years, MacMain, Connell & Leinhauser has provided counsel to many small business owners. Today, we are prepared to help our clients with very challenging small business issues that many are facing during the current COVID-19 outbreak.
The Face of Small Business has Changed
The scene along a typical American business district in June 2020 is starkly different than it was just a few months ago. In many business districts, foot traffic is way down, and some long-established shops have closed their doors. Even as some businesses begin to reopen under new restrictions, no one knows when business as usual will return. According to a survey conducted by the Small and Medium Business Group, small businesses employing less than 20 employees have been hit the hardest. They were the first to stop hiring subcontractors, lay off workers, or reduce hours. The survey also reported that the retail, restaurant, and personal service sectors have suffered the most.
The negative impact on the American economy cannot be overstated. According to the Small Business Administration (SBA), businesses with less than 500 employees account for nearly half of the employees in the United States. Main Street America (MSA), a network of over 1,600 commercial districts comprising of approximately 300,000 small businesses, recently conducted a survey that projected millions of small businesses closing permanently if the COVID-19 pandemic continued into the summer and beyond. The survey also revealed that small business owners cite the need for financial assistance and penalty-free extensions on expenses to stay open.
Addressing the Challenges
There are options that businesses can explore to stay afloat temporarily, including deferring tax payments, examining existing insurance policies for clauses pertaining to business continuity/business interruption coverage, and applying for various types of SBA loans and debt relief. SBA-backed programs include the following:
- Paycheck Protection Program (PPP): Temporarily expands the existing SBA 7(a) program that provides loan forgiveness for retaining employees
- Economic Injury Disaster Loan (EIDL): Provides up to $10,000 to businesses currently experiencing economic difficulties
- SBA Express Bridge Loans: Provide up to $25,000
- SBA Debt Relief: For businesses that currently have SBA 7(a) loans
Because these measures provide only temporary relief, more may be needed for a company to remain afloat. In the long-term, small businesses may want to examine the specific underlying causes of their vulnerability and enlist the help of professionals to restructure the way they do business.
Specific Areas to Address
The SBA has identified key areas of vulnerability that small businesses may encounter as the pandemic unfolds, including the following:
- Access to capital. Businesses may benefit from exploring additional options for accessing capital, including SBA-backed loans for different purposes and businesses.
- Supply chain problems. Strategies for addressing potential supply chain shortfalls include maintaining adequate inventory on hand when possible, renegotiating contracts with suppliers, and diversifying distributor sources.
- Deep-cleaning and facility remediation. One key to staying in business during the pandemic is frequent and thorough cleaning of surfaces. Businesses need to enlist the use of cleaning services that are qualified to conduct deep cleaning on a regular basis.
- Compliance with regulations to protect workers. Some states and municipalities are issuing mandates that workplaces provide personal protective equipment (PPE) and institute other measures to ensure the safety of workers as businesses reopen.
- Formulation of social distancing policies. Small businesses need to make it clear to staff and customers any changes in policies regarding on-site, wearing PPE, the use of breakrooms or bathrooms, and any other measures deemed necessary for compliance with social distancing guidelines.
- Response to changes in market demand. Depending upon the nature of the business, a company may need to refocus operations and marketing strategies to make a profit in the stay-at-home environment. This may include online ordering systems or using social media or other means to attract customers.
America’s Small Business and Development Centers (SBDC) are continually updating a national joint study on the impact of COVID-19 on small businesses. Data from the mid-May 2020 study indicated the following:
- Nearly half of small businesses that obtained an SBA loan feel they will qualify for loan forgiveness
- More than half of small businesses are operating at 50 percent capacity or less
- More than 60 percent of small businesses are concerned about a second wave of COVID-19
If the pandemic continues, small businesses seeking to stay in operation may want to enlist the assistance of a small business attorney to respond to the new environment and institute changes to adapt. Matters in which professional legal counsel can be of great benefit during these uncertain times include the following:
- Preparing a return to work plan for your staff and a re-opening plan for your customers.
- Reviewing qualifications required for PPP loan forgiveness
- Reviewing insurance policies to determine eligibility for business continuity coverage
- Assisting with employment and human resources matters, such as unemployment insurance for furloughed workers and policies for returning back to work safely
- Reviewing contracts with supply chain partners and/or cleaning services
- Renegotiating lease agreements for businesses or retail space
- Drafting measures to protect the business from liability if workers or customers contract COVID-19
- Answering questions concerning potential violations of the Americans with Disabilities Act (ADA) in requiring employees with COVID-19 symptoms to leave the workplace
Small business owners may have been hesitant in the past to reach out for legal assistance. Today in the face of COVID-19, the very survival of a business may depend upon skilled legal guidance. We are available to provide the support needed to continue operating successfully.
The small business attorneys at MacMain, Connell & Leinhauser have helped many small businesses in the past with serious legal issues, and we stand ready during the pandemic to help new and existing clients with unforeseen challenges. If you have legal questions arising from the impact of COVID-19 on your business, reach out to us today by calling 484-318-7106 or fill out our online form for an initial consultation. We are able to conduct meetings via phone or videoconference. We serve clients throughout New Jersey and Pennsylvania, including Philadelphia and Chester County, from our office in West Chester, Pennsylvania.
Understanding Contract and Labor Disputes
Contract and labor disputes in corporations can take on many forms. Owners, managers, and workers must understand how these disputes occur, what issues they might involve, and how they will resolve them. Businesses and employees could be embroiled in these situations at any time, and it is best to anticipate future labor issues, work together, and call in an attorney when needed.
What Types of Labor Disputes Exist?
Businesses might not know how to qualify a labor dispute. Managers and employees cannot effectively negotiate the terms of a contract if they do not know what the problem is. Identifying the difficulty is one of the keys to negotiation. If the two sides are not negotiating on the same terms, they will never come to a resolution. Labor disputes include:
- Disputes over the interests involved in a contract: This is a common disagreement. One side may want to have an equal share of the money made by the company and want to raise the percentage they earn. Because this is a familiar dispute in American media, it is easy to see everything that is involved. These interests can also include pay increases, bonuses, increased vacation time, paid time off, raises, and even retirement benefit contributions.
- Disputes over rights provided to workers: Workers’ rights include Workers’ Compensation, hazard pay, working conditions, opportunities for advancement, and even the ability to unionize.
Most contracts will involve both of these disputes in one way or another. Employees must sit down with management to determine what to negotiate. Because these negotiations can be complicated, it is best to have a lawyer present.
What Causes Contract and Labor Disputes?
Businesses may wonder what causes contract disputes, or employees may want to organize their colleagues around a singular cause. The following issues may contribute to the decision of your workforce to see representation or to collectively bargain:
Economics: Employee pay, benefits, raises, and the economic conditions under which the company works are often a key to labor disputes. For example, employee perception of the company’s overall profitability or cashflow in relation to employee pay may cause workers to be dissatisfied, believing they are not compensated fairly. Conversely, management and employees might disagree over the wording of a contract revision during a recession as workers are asked to take pay cuts, give up raises, and forgo pension contributions.
Managerial issues: These could be clerical problems that are reflected in employee paychecks or work that is difficult for everyone in the office. Managers that are ineffective communicators, inadequate tools, clothing, or protective gear for workers are all issues that could be addressed by owners and may come up in bargaining.
Political cause: Changes in the political climate can cause a business to experience difficulty. Workers or managers might adhere to a particular ideology that might alter the trajectory of the business. A city or county might pass new wage laws, and the two sides will need to negotiate a contract implementing those new rules.
Psychological reasoning: The perceived motivations of people on the job could cause a friction in the workplace that leads to a labor dispute. While these motivations are difficult to judge, they could become part of a heated contract dispute if unclear or not addressed.
Who Can Prevent Contract and Labor Disputes?
Owners, managers, and workers can help prevent labor disputes by taking affirmative action, such as:
- Ensuring work areas are clean and organized.
- Everyone within the organization, up to and including the CEO, should be held accountable for the work they must do.
- Everyone should have the opportunity to apply for and receive promotions or raises to positions they are qualified to hold. Likewise, all job opportunities should be posted so that anyone can apply.
- Ensure that managers and ownership have a positive working attitude and a good working relationship with the employees. This is one of the best ways to avoid organization in your workplace and to make labor negotiations effective where a union exists.
- Review all salaries and bonuses annually to ensure they are aligned with industry standards or averages.
A simple audit of a business will reveal problems that can be solved quickly and avoid a union organization campaign. Employees join a union for many reasons, but most often because they believe they are not being treated fairly by their employer. Most employees would prefer to avoid going on strike, hold up the productivity of the business, or create needless animosity. If both sides work well together, union organization could be averted and most contract disputes can be avoided.
How Can Both Parties Resolve Labor and Contract Disputes?
Most labor disputes can be resolved using the following styles of conflict resolution. Every business is different, and each company should work closely with its counsel and employees to determine which method will help both sides achieve their goals:
- Employee Policies and Training: A company with effective employee management policies and relationships can avoid union organizing altogether. Hiring and training good managers and executives to address employee concerns, establish industry appropriate pay rates and reasonable expectations for employees and are the best way to avoid union organization altogether and have a productive workforce.
- Grievance management: Companies, even those without a union, can implement and use a grievance management model to hear and address each grievance from employees. If grievances are handled property and the employees are treated consistently, then this process can avoid many labor disputes.
- Collective bargaining: If a union is formed, a clear and well-crafted Collective bargaining agreement will set the tone for employee and management interactions. Bargaining can be used to resolve issues and also alleviate employee concerns over the workplace issues.
- Mediation: When bargaining is ineffective or stalled, sometimes a mediator can lead the parties into a conversation and offers solutions. Mediators often resolve problems for both sides while helping them write a new contract.
The experienced legal team at MacMain, Connell & Leinhauser help businesses resolve contract and labor disputes. Call us today at 484-318-7106 or contact us online for an initial consultation. Our offices are located in West Chester, Pennsylvania, and we serve clients throughout Philadelphia, Chester County, and New Jersey.
Importance of Employee Appreciation for Every Business
The first Friday in March is Employee Appreciation Day. Employee appreciation is an often-overlooked component of a positive and healthy workplace. It fosters positive morale, motivation, and job satisfaction among workers, which is true for every employee. Whether you are overseeing a global company or a small start-up, every employee wants to be recognized for their contributions. The following are ways to show your team you appreciate their hard work on Employee Appreciation Day and throughout the year:
Employees often feel disconnected or invisible to upper management. Ongoing personal communications make a big difference in helping staff at every level feel seen and heard by their superiors. Even something as simple as saying “Good morning” or “How was your weekend?” fosters personal and meaningful connections that show employees they matter.
Provide Balanced Feedback
Researchers who studied the importance of appreciation in the workplace found that productive feedback from a manager was a primary way an employee felt valued. However, it is important to note that feedback that does not address areas for development is not always helpful, just as all negative feedback would be discouraging. Balance is key.
Today’s workers are looking for more flexibility than ever. Whether that means working from home or giving employees the chance to put in 40 hours according to their own schedule, if your business permits, consider giving workers some freedom to design their workweek. Flexibility to create a schedule that is more ideal for their own personal needs shows workers they are trusted and appreciated.
Talk About Growth
Every employee wants to know they are important and their efforts matter. Make it a habit to review your workers’ career goals and interests and explore their potential for growth in the company. Knowing they are more than just a placeholder shows them their employer is just as invested in their personal success as they are in the future of their business.
These are just a few tips to remember when creating a culture of gratitude in your workplace. While Employee Appreciation Day is a great time to start, make it a habit to tell your employees what you appreciate about their work on a regular basis. Build it into your regular routine with dedicated time at meetings to acknowledge team members or personal notes of appreciation for specific accomplishments. After all, satisfied employees are your best investment.
If you are faced with a lawsuit, the dedicated West Chester small business lawyers at MacMain, Connell & Leinhauser work tirelessly on your behalf to protect your interests and business. To learn more about our services and how we can help, call 484-318-7106 or contact us online to schedule an initial consultation today. Located in West Chester, we represent business owners throughout the state, including Philadelphia and Chester County.