Every company with employees needs an employee handbook customized to its unique business needs. A customized employee handbook serves multiple positive functions. At the same time, not adopting an employee handbook, having a handbook that is inconsistent with legal requirements, or using a document not customized to the employer’s actual situation will have negative consequences. 

A well-written employee handbook is a crucial tool for communicating with your company’s employees.  From the first page, the company and its management can set a positive tone by explaining their vision for the company, and help employees visualize how they fit into those plans.

Your company’s employee handbook also sets clear expectations in a variety of key areas.  For example, the company can set out its standards for employment eligibility, job classifications, employee benefits, work hours, attendance expectations, and the company’s disciplinary processes. Additional issues often addressed might include probationary employment periods, dress code, general safety programs, leave policies, and its incident and accident reporting requirements.

A well-planned employee handbook also addresses important legal matters such as anti-harassment and anti-discrimination policies, workers’ compensation, how the company deducts for mandatory federal and state withholding, and applicable Federal and state employment laws such as FMLA, the ADA, and the alphabet soup of other applicable laws.  You should also address laws which may regulate employment in your company’s line of business, if applicable. 

You will not want to use a generic employee handbook that is not based on your company’s actual operations and specific needs. Neither should companies use handbooks that have not been vetted by an attorney for the states where they operate. For example, South Carolina has a specific statute which, upon compliance, allows employers to feel confident that their employee handbooks can be altered as needed for changing company needs.  Failing to comply with this statute can make the employee handbook into a contract, which the employer cannot alter without the employees' agreement.   

Once the handbook is in place, it should not sit on a shelf and collect dust. It is important for all company leaders, as well as employees, to become familiar with its terms through review and training. The handbook can be changed, and should be where necessary. But the employee handbook should be followed to ensure continuity and to protect the company. Having legal employment practices in place and following them on a regular basis is good for morale and helps demonstrate that your company treats employees fairly and consistently.  Having a predetermined standard for responding to various HR issues also protects a company from serious financial liability, including claims of discrimination and a failure to comply with applicable laws. 

Involving an attorney who is knowledgeable of applicable employment laws and familiar with your company's business operations in the drafting and updating of your company's employee handbook, as well as in providing guidance on HR issues,  protects businesses' bottom lines by demonstrating compliance with predetermined HR policies and applicable employment laws.

Many people start new businesses without seeking professional advice on the best type of business entity for their particular situation. An experienced business attorney and a good tax CPA can help business owners maximize their return on investment, minimize taxes, and limit their personal liability.

For example, entrepreneurs may create a corporation or limited liability company (LLC) and later find out that they’ve stumbled into costly tax consequences that could have been avoided.

Other business owners do not set up a corporation or LLC at all. In this case, any customer or third party can directly sue the business owners. The owners risk all their personal and business assets and possible bankruptcy. Solid legal planning and advice can help protect what they’re building.

There are also a long list of steps required to create an LLC or corporation beyond filing paperwork with the North Carolina Secretary of State. An experienced business attorney can guide business owners through these requirements and important decisions.

We do not propose a cookie-cutter approach. Each business is different and each situation is unique. Whether you are in the planning stages, or if you have been in operation for several years but have not had the benefit of working with an experienced business attorney, we would be glad to talk with you about these issues.

In today's edition of The Charlotte Observer, interested readers can learn some very basic points about the process through which one of Charlotte's long-time local favorite restaurants,  Bojangles’, will transition from a privately owned company to one where fans of the chain's chicken and biscuits can own a piece of their favorite restaurant. This process is called an Initial Public Offering or an IPO.

Most companies remain privately owned but that does not mean that individuals and companies can’t buy part (or all) of an existing business. The company’s owners may be willing to sell their business. Other individuals or companies may be intrigued by the possibility of getting into business for themselves or expanding their existing business by buying another company. The 2 biggest issues are (a) finding out what businesses might be for sale and (b) a fair price for the company.

In many cases, The Canipe Law Firm, PLLC works with prospective buyers or sellers to help answer these questions and to work out a deal. In other case, we are retained by a business broker to handle a  business sale which is ready to close.  Business brokers provide a tremendous service by creating a market for buying and selling privately owned companies.  

Not every attorney understands this type of matter. Many attorneys focused on representing business do not have experience with buying and selling business.  There are many moving pieces and questions to be asked and answered. In whatever role we are asked to handle, The Canipe Law Firm’s experience in this specific legal field allows us to provide solid legal service.

For information on the Bojangles' deal, you might want to go to this link: http://www.charlotteobserver.com/news/business/article20434572.html

In many cases individuals claim to have been hurt at work but they do not know whether what happened qualifies as workers’ compensation injury under North Carolina law.  In the recent decision by the North Carolina Court of Appeals, Allsbrook v.  Illinois Tool Works/Wilsonart, we find a very good discussion of the legal standard that applies in most North Carolina workers’ compensation claims: the “injury-by-accident” standard.

What Are The Primary Benefits Under NC Workers’ Compensation Law?

If an employee has a North Carolina workers’ compensation injury, their employer (almost always through an insurance company), will have to provide (1) medical treatment and (2) lost wage benefits to the injured employee, among other benefits. All North Carolina employers with at least three employees must provide workers’ compensation benefits. When an individual needs medical treatment and cannot work due to their injury, knowing if they are entitled to workers' compensation benefits is crucial.

What’s An Injury-By-Accident?

Under the “injury-by-accident” standard, an employee’s injury is compensable (entitling them to workers’ compensation benefits) if (1) the injury took place “in the course and scope” (2) of their assigned work duties and (3) was caused by something unexpected that happened during the work duties. In other words, there needs to be an injury caused by something unexpected that took place while the employee was working. This is how North Carolina defines an “injury-by-accident” for purposes of workers’ compensation.

The Key Facts of the Allsbrook Case

In the Allsbrook case, Mr. Allsbrook worked as a “saw helper” at an Asheville area company which manufactures kitchen and bath countertops. The primary dispute in this case was whether Mr. Allsbrook was doing his normal job in the normal manner when he felt a pop in his chest. Mr. Allsbrook suffered a pretty significant injury, requiring surgery to his right shoulder and sterno-clavicual joint, among other problems.  This injury has caused him to be out of work since 2009.

Mr. Allsbrook worked as part of a team which cut the countertop materials to specific lengths using large industrial saws. At the hearing, Mr. Allsbrook testified that he was using an older, manual saw that was rarely, if ever, used for his job. However, the injury report from the employer stated Mr. Allsbrook was using a newer, less physically demanding saw when he felt pain.

Probably the most crucial evidence came from Mr. Allsbrook’s own lips. Early on, he gave a recorded statement to the insurance company.  He agreed that he was doing his normal job in the normal way when he felt pain near the end of his February 26, 2009 shift. At the original hearing, Mr. Allsbrook’s former manager, who no longer worked for Wilsonart, testified that the saw which Mr. Allsbrook was using on the day of the injury was very much in regular use by Mr. Allsbrook in doing his job. There was similar testimony from the plant manager for the employer.

At The Commission Hearing

When this claim was heard by the North Carolina Industrial Commission, the original hearing officer (called a “Deputy Commissioner”) decided to believe the testimony and evidence that Mr. Allsbrook was doing his normal job in the normal way when he felt the pain in his chest.  Thus, she ruled that Mr. Allsbrook did not have a compensable claim. Because his injury was not caused by an “accident" that occurred while he was working he was not entitled to have his medical bills paid through workers' compensation. Nor was he entitled to recover any lost wages from the insurance company.

Thereafter, Mr. Allsbrook’s case was heard on appeal by three Commissioners at the North Carolina Industrial Commission, who are part of a group of individuals who make up The Full Commission.  The Full Commission had the option to re-consider all the evidence and was not required to rule the same way as did the Deputy Commissioner. They could have decided that the weight (or majority) of the evidence proved Mr. Allsbrook injured his shoulder due to an “injury-by-accident.” However, they agreed with the Deputy Commissioner, and ruled against Mr. Allsbrook. The Full Commission ruled that Mr. Allsbrook was not  entitled to any worker’s compensation benefits.

At The NC Court of Appeals

This week, the North Carolina Court of Appeals also ruled against Mr. Allsbrook. However, they were applying an entirely different legal standard. At this point, the judges simply asked whether there was any credible evidence on which the Full Commission had relied in ruling against Mr. Allsbrook. In this instance, there was clearly good and credible evidence on which both the Deputy Commissioner and the three member panel of the Full Commission relied.

In my judgment, Mr. Allsbrook’s early statement to the insurance adjuster, that he was doing his normal job in the normal way when he felt this pain, was probably the decisive factor.

What If Mr. Allsbrook Had Hurt His Back?

What you might find puzzling is that, if Mr. Allsbrook had injured his back, rather than his shoulder in this case, he would almost certainly have won.  There is a lower, and easier to meet, standard for a compensable back claim in North Carolina: the “specific traumatic incident.” No accident is required to meet this standard.

What Lesson Can You Learn?

Both employees and employers need to understand these legal issues. If you have questions, please consider consulting with an attorney who handles North Carolina worker’s compensation claims to understand this issue and the various rules that apply to specific types of injuries in the workplace.

 

Let’s suppose you’ve built a thriving and successful family-owned business. And perhaps you have passing thoughts about retiring someday. What happens when you leave? Who takes over management? Who will own the company?

This is a complex issue. The right people to run the company when the present ownership retires might be the adult children of the owners. Or, some of them may not have the right skills or the interest in the company. Maybe the right person to take over as president of the company is a key employee who isn’t a relative. Or, perhaps another company or set of investors might find value in purchasing your company.

We could list an endless list of scenarios. However, the big question remains, what comes next? The vast majority of family-owned businesses don’t last to the second generation, much less the third generation. Even in the best businesses, making the right transition requires serious conversations and hard questions. 

A strong team of advisors is crucial to making this transition. A business attorney can help make sure the company’s records are in good order so that even an unexpected purchase offer can be readily considered. Your company’s CPA can help ensure proper financial records are kept. If the company is large enough, having an experienced CFO will help put the financial house in order, or engaging a fractional CFO on an ongoing basis can provide the same value.  Investment bankers and business brokers can also be part of the answer.

Getting a company ready to sell an be a lengthy process.  There are sure to be both personal and financial considerations.   Today is a good time to start having these conversations.

Below is a link to a very useful article with some great questions built around a real-life situation. It’s worth your time to read:

http://finance-commerce.com/2014/02/how-to-the-delicate-business-of-succession-planning/?utm_content=buffercbbab&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

In a corporation, there is a division of power between the owners (shareholders) and the group of people who the shareholders authorize to run the company day-to-day and to set policy (board of directors or BOD).  

One big question is, what are the limits of the power of the Board of Directors?

For example, does the BOD need approval from the corporation’s shareholders before selling, leasing, or otherwise disposing of company assets? This matters a good deal, because the shareholders, as investors, typically want to see their corporation follow the basic business plan which formed the basis of their decision to invest. 

Thus, if the company’s business plan did not involve selling off or leasing out most or all of its assets, the shareholders would be understandably displeased if that was what the BOD did or wanted to do.

Until recently, the North Carolina Business Corporations Act was pretty fuzzy on this big point.  

Until January 1, 2014, the law was that the BOD had to get shareholder approval to sell, lease, or otherwise dispose of “substantially all” of the corporation’s assets. But, there was no guidance in the statute on exactly what that key phrase meant. 

One of the good points in the recent changes to NC’s Business Corporations Act is that shareholder approval is now specifically required when the BOD wants to sell, lease, or exchange the Corporation’s property to such a degree that its assets will drop to below 25% of the prior level.

What is that statute does not fit with what the shareholders want?

Suppose the shareholders want to set some other limit or structure the BOD’s power in some different way?

There is a good answer –  the new statute specifically states that Articles of Incorporation or By Laws of the Corporation can spell out some different agreement.  

This option provides a good example of the importance of good, personalized corporate bylaws and shareholder agreements.  

Having frank discussions up front allows all shareholders to consider what they would want, and negotiate a deal that everyone can accept. 

It’s much more expensive to fight a lengthy and complex lawsuit over such issues than to have these discussions with all shareholders and the company’s attorney today.