“We believe in making businesses feel like they are our only client.”

Thursday, June 02, 2011


I frequently talk to my clients, particularly small business owners, about the need to have an estate plan.  Taking that theme one step further, business owners need to have an exit strategy.

I am currently working with a couple of clients on succession planning.  Many more businesses I represent need this planning, but have not even started.  As a private business owner, there are only three options for getting out of your business: (i) transfer it to an insider, (ii) transfer it to an outsider, or (iii) go out of business.   Unfortunately, many private businesses end up in the third category by default.

Transferring to an insider means passing the business to your family or selling the business to a key employee.  These transitions cannot happen overnight.   They take planning.   If a child or an insider is going to buy the business they have to be trained to run the business.   Plus, they need the financial wherewithal to pay fair value for the business.  If they are going to receive the business as a gift, how is the owner going to fund retirement?

Transferring to an outsider means creating a market to sell the business.   Who might be interested in buying the business?   Trade magazines are full of ads by business brokers trying to sell mom and pop businesses.  For to that to work, the business has to generate a price that both satisfies the owner’s needs and pays the broker.   Competitors might be interested in buying the business, but how do you find out without the word getting on the street you are looking to sell your business?   Regional or national firms might be interested in acquiring the business.   How do you tap into those markets?

Look to your team of professional advisors, particularly your CPA and your business attorney, to guide you along this path.  And you need to start long before you are actually ready to get out of the business.

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Interesting article regarding joint employment relationships from Akerman LLP written by Laurie M. Weinstein. Read the full article below:

In its first application of the landmark Browning-Ferris decision, the National Labor Relations Board (NLRB) has determined that ACECO, a contractor, was not a joint employer with Green Jobworks, its staffing agency. In Browning-Ferris, the NLRB held that two or more entities would be considered joint employers if each one possessed sufficient control over employees’ essential terms and conditions of employment. As discussed more here, this is significant because, even if the company is not the actual employer of workers, the company may be required to bargain with a Union and held liable for unfair labor practice charges if found to be a “joint employer.”

In the Green Jobworks case, the NLRB revisited the broader joint employer test of Browning-Ferris, and this time found that the Union failed to establish specific, detailed and relevant evidence demonstrating a joint employment relationship between Green Jobworks and ACECO. Green JobWorks is a staffing company that provides temporary labor to construction companies. ACECO is a demolition and remediation contractor who supplements its workforce with Green JobWorks employees.

Green JobWorks and ACECO entered into a Master Labor Services Agreement requiring Green JobWorks to provide workers who are responsible for tracking Green JobWorks employee hours, determining breaks, and removing Green JobWorks workers from the construction site, if necessary. Under the agreement, Green JobWorks was exclusively responsible for the following duties: (1) employee recruiting, hiring, counseling, discipline and discharge; (2) establishing and paying employee wages; (3) providing worker’s compensation insurance and fulfilling unemployment compensation obligations; and (4) maintaining personnel and payroll records for Green JobWorks employees. Project orientation and day-to-day schedules were determined by the general contractor.

The Local Union asserted that ACECO was a joint employer because: (1) the Master Labor Services Agreement gave ACECO the right to direct managers and supervisors, and to dismiss staff employees under certain circumstances; (2) ACECO had requested specific Green JobWorks employees with particular skills; and (3) ACECO effectively controlled the wages of Green JobWorks employees.

The NLRB rejected the Union’s argument, and distinguished the facts from those in Browning-Ferris. ACECO’s right to refuse or terminate a Green JobWorks employee was limited and not unqualified. ACECO could request specific employees, but the staffing agency was under no obligation to meet the request. Additionally, Green JobWorks employees could individually negotiate higher wages, and Green JobWorks was not prohibited from paying its employees more than ACECO paid its employees.

Regarding day-to-day supervision, ACECO, who was a subcontractor, did not determine the job tasks for Green JobWorks employees. Instead, they received project orientation and day-to-day schedules from the general contractor. Additionally, Green JobWorks field supervisors traveled to project sites to interact with lead employees, and lead employees were responsible for tracking Green JobWorks employee hours and determining breaks and rest period.

Accordingly, the NLRB found that ACECO was not a joint employer with Green JobWorks. The decision highlights the importance of an agreement that gives as much discretion to the staffing agency as possible. The Green Jobworks case is a reminder to franchisors, subcontractors, and business entities to pay careful attention to the “joint employer” standard.

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Why do employers sponsor holiday parties? To show our appreciation for our employees’ work and, hopefully, celebrate a successful year in business. However, in my experience holiday parties are fraught with as much opportunity to damage morale as to improve it. So here are some thoughts from a war-scarred veteran of many year-end parties.

First, let your employees help plan the party. It is not really a party unless the people you plan to honor and entertain actually want to come. I once worked for a company who hosted their holiday party at a fancy restaurant that required men to wear a jacket. Many of us in management frequented this restaurant and considered it a big perk to invite the rank-and-file employees to a party there. However, almost none of the staff (primarily female) attended the party. After a couple of years of this trend, someone had the bright idea to ask the staff why the party was not well attended. Turns out, most of the staff’s husbands hated to wear a sports coat or jacket, so they did not attend. The moral of the story is, let your people help plan the party.

I cannot discuss holiday parties without discussing the issue of alcohol. To paraphrase, “What happens at the holiday party, does not stay at the holiday party.” Behavior at any office party comes back to work. The party is not a free pass for adolescent behavior and there is no law against discharge or discipline for actions taken at the party. Don’t punch out the boss. “Innocent flirting” with a subordinate at the party can become sexual harassment in the cold light of day.

For the employer, alcohol includes the possibility of "social host liability." In Georgia, social hosts can be held liable for the damage caused by someone to whom they serve alcohol if the person was noticeably intoxicated at the time and the host knows the person will soon be driving a motor vehicle. In South Carolina social host liability is limited to hosts who serve alcohol to minors (including providing open access, such as a keg).

My rule of thumb when advising clients is--all things in moderation. Here are some tips to help keep the party in check and still have a good time:

1. Invite spouses if the party is after business hours;
2. Do not serve unlimited free alcohol. If the party is a dinner, have an open bar for 45 minutes or an hour before dinner and then go to a cash bar. Hand out two free drink tickets to each person;
3. Serve food to help slow alcohol absorption;
4. Do not serve unattended alcohol, particularly if there are minors attending the party;
5. Hire a professional bartender.

Happy Holidays!

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A .pdf version of the PowerPoint presentation Ed delivered to the CSRA Medical Managers on August 22, 2013.

If you own or manage a business and find yourself dealing with difficult people, take a look at these suggestions.

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A presentation on this year's Supreme Court cases as they affect employers.

Presented by Ed Enoch to the Georgia Department of Labor Employer's Counsel on August 8, 2013.

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This is the powerpoint presentation from my speech to the CSRA Medical Managers in May 2012.   It provides guidance on creating or auditing your employee handbook


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The Georgia state legislature acted quickly to undo a recent opinion of the Georgia Supreme Court concerning who can file answers to a garnishment.  Last fall the Georgia Supreme Court adopted a Georgia Bar opinion stating that corporations and other entities could not file an answer to a garnishment in any court in the State of Georgia.

This opinion changed a long-standing practice of business entities filing these answers without an attorney.   The state legislature has now reversed this holding by a bill amending the garnishment statute.   The new bill restores the ability of entites to file these answers through their employees without engaging an attorney.  This bill was effective immediately on the Governor's signature.

You can read the bill at http://www.legis.ga.gov/legislation/en-US/Display/20112012/HB/683

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The link below sumarizes recent cases around the county concerning social media.   Facebook, Twitter, LinkedIn and the like continue to be the "Wild Wild West" of privacy decisions.  The decisions in this link reinforce the idea that social media, even with privacy settings, is not considered truly private.  For employers, these cases also raise the issue of who owns the accounts such as LinkedIn and Twitter.   The contacts in these accounts can be just as important to the company as contacts in a cell phone.   Company policy should address who owns accounts created for business purposes.



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On February 21 Ed will speak to physician residents at a seminar at Mercer University sponsored by the UGA Small Business Development Center.   The topic will be "Negotiating Your First Employment Contract."   Our firm represents medical   practices and individual physicians in the drafting and negotiation of employment contracts as well as all other   legal aspects of running a medical practice.

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I have attached the newsletter from our Society for Human Resource Management local chapter.   This organization has over 100 of the top HR professionals in the area and is actively engaged in the community through projects such as the Drug Court program.  There are articles that can benefit small business in the newsletter.  If you handle human resource issues for your company, I highly recommend becoming a member of this group.

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    3540 Wheeler Rd, Ste. 312
    Augusta, GA 30909
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