Owners’ Academy

On September 18, 2024, a panel of three Third US Circuit Court of Appeals judges heard oral argument from the National Labor Relations Board (NLRB) and Starbucks on the matter of consequential damages. At stake is the NLRB’s power to award damages for direct and foreseeable pecuniary harms that go beyond lost pay and benefits. The award of such things as credit card late payment costs and uninsured medical costs, fees for not timely paying other expenses, etc. are at issue. If such awards are within the NLRB’s authority, the damage awards in NLRB wrongful discharge cases could dramatically rise. Here is how we got to this point. In 2023, the NLRB ordered Starbucks to pay consequential damages in a case of the wrongful termination of two pro-union employees. Damages included “direct or foreseeable pecuniary harms incurred as a result of [the employees’ wrongful discharges.]” This case is one of many cases Starbucks faces alleging wrongful discharge of union supporters. If it losses, the monetary cost could be significant. By filing this appeal, Starbucks’s joins companies such as Amazon, SpaceX, and Trader Joe’s in challenging the NLRB’s constitutional authority to exert such enforcement powers. Traditionally, the Board would order reinstatement, backpay and lost benefits in a case of wrongful termination, however this was expanded in 2022. A Board decision in Thryv, Inc., 372 NLRB No. 22 (2021), held employees who are wrongfully terminated should also receive compensation for other pecuniary losses stemming from the termination. Examples include credit card cost, out of pocket medical expenses, mortgages related fees, etc. Such damages can quickly add up. In this latest Starbucks case, the Third Circuit considered Thryv  but also the US Supreme Court’s June ruling in Jarkesy v. U.S. Securities and Exchange Commission and its applicability to the NLRB. In Jarkesy, the Supreme Court found it was unconstitutional for the SEC to impose civil penalties in administrative cases. Such awards need to be awarded in a court. The Third Circuit must decide whether the expanded remedies sought by the NLRB would be considered “legal remedies” typically imposed by the courts as in Jarkesy or “equitable remedies” typically imposed by administrative agencies. Such administrative remedies are intended to benefit the worker rather than unfairly punish employers. The NLRB argued they have the authority to impose the remedies regardless of their status as legal or equitable. Not surprisingly, Starbucks argued allowing the NLRB to issue damages beyond backpay would violate their constitutional right to a jury trial and therefore was unconstitutional. The outcome is pending and regardless, it may well be appealed to the Supreme Court where the authority of various agencies is being curtailed. We will keep you informed. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560  

Passed in June 2024 and signed into law by New York Governor Kathy Hochul on September 5, the Retail Worker Safety Act is set to take effect March 4, 2025. The law mandates protections for retail employees including panic buttons, workplace violence prevention policies, and training. Who is covered? The law explains: Covered employers: any person, entity, business, corporation, partnership, limited liability company, or an association employing at least ten retail employees. Retail employees: employees working at a retail store for an employer. Retail Store: a store that sells consumer commodities at retail and which is not primarily engaged in the sale of food for consumption on the premises. The state, any political subdivision of the state, a public authority, or any other government agency is not covered by the law. Key Requirements The Act’s key requirements are the installation of panic buttons, implementation of workplace violence prevention policies, and training. The panic button requirement does not take effect until January 1, 2027, while the other requirements are effective March 2025. Panic Button Employers with more than 500 retail employees nationwide must provide employees with access to panic buttons across the workplace. Employers may opt for a physical button or mobile phone-based buttons. The requirements for each are slightly different. If the employer chooses to use a physical panic button it must contact the local 911 public safety answering point when pressed. Pressing the button must provide the answering point with the employee’s location and dispatch law enforcement. The button must be accessible or wearable. The mobile phone-based approach requires the button to be installed on employer provided equipment and is wearable. The mobile button may not track employee locations unless pressed.   Workplace Violence Prevention Policy Employers must adopt a written workplace violence prevention policy to be provided to employees upon hire and annually. The NY Department of Labor (NYDOL) will draft a model plan which will be evaluated every four years from 2027 onwards. Employers may adopt the NYDOL policy or create their own equivalent policy. The policy must: List factors or situations in the workplace which may increase the employees’ risk of workplace violence. Examples given include working late at night or early morning hours; exchanging money with the public; working alone or in small numbers; and uncontrolled access to the workplace. List methods of preventing workplace violence, including but not limited to establishing and implementing a reporting system. Provide information on federal and state laws regarding violence towards retail workers and remedies available for victims of workplace violence. Explicitly state that it is unlawful to retaliate against employees who report workplace violence or factors which place employees at risk of workplace violence. Workplace Violence Prevention Training Employers must provide training upon hire and annually. The NYDOL will provide interactive training which will also be evaluated every four years starting in 2027. Again, employers may opt to use the state provided training or provide their own equivalent. The training must: Include information on the Retail Worker Safety Act; Examples of steps employees can take to protect themselves; De-escalation strategies; Active Shooter drills; Emergency procedures; Instructions on how to use security alarms, panic buttons, and any other emergency devices; and A site-specific list of emergency exits and meeting places to be used in emergencies. Takeaways New York State retail employers should look at the state provided training and policies to adopt as their own or to ensure their own materials are compliant. For employers outside of New York it is important to keep your eyes peeled for creation of similar laws in your own state. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560      

If you’re looking to attract an investor or an acquirer one day, expect them to dig into your sales and marketing process. If you’re a company that sells to other businesses, an investor will want to know where you get your leads from and how much each costs you to generate. They’ll want to know what technology you use to support your sales team. They’ll want to understand how your sales reps get meetings and how many appointments a good rep has each week. They’ll want to know the close rate of a high performer and how it compares to an average performer. The investor’s questions aim to gauge the scalability of your sales model under significantly higher investment rather than to assess your past performance. Acquirers love stumbling over a business where capital is the primary constraint to growth. They fall over themselves for a company with an efficient sales engine that needs more fuel (i.e., money). Most investors have lots of capital but struggle to find businesses with a sales system that won’t collapse under the weight of more money. How Gregg Romanzo Built a Sales System In 2004, Gregg Romanzo started an old-school freight brokering business. Most freight brokers are nothing more than a handful of people arranging shipments in return for razor-thin margins, but Romanzo realized his sales model had the potential to grow into something much bigger. Romanzo’s model involved hiring high-potential people with a relatively modest base salary of between $40,000 and $60,000 per year and teaching them the business from scratch. He armed them with a computer and access to the best scheduling software and tied their variable compensation to the gross margin of the jobs they booked. Romanzo knew if he could get a rep to clear $100,000 per year in total compensation, he could keep them for the long run. Romanzo took his very best talent—the top one or two percent—and built a team around them so they could earn even more. This cohort of salespeople could clear three, four, or even five hundred thousand dollars in an exceptional year. Since Romanzo paid a relatively low base salary and his people didn’t need much equipment, he could hire many salespeople. By the time he sold his company, he had 200 employees, 190 of whom were salespeople. That’s 95% of his headcount dedicated to sales. How does that compare to your company? If you have a winning formula you think would hold up if you doubled or quadrupled your sales team, consider monetizing the sales model you’ve created. Either hire more reps or show a deep-pocketed investor or acquirer how durable your sales model is and how all you need is their capital to grow it.

Halloween isn’t just a time for ghosts and goblins; it’s also a perfect moment to explore those spine-chilling hiring stories that haunt every small business owner’s dreams. At FIREPOWER Teams, we’re all about turning fears into cheers by empowering actionable strategies and strengthening teams. Let’s face the horrors—a bad hire can lurk in the shadows, embodying the kind of nightmares that disrupt teamwork and stifle growth. But fear not! As you learn about these ghastly characters, remember that each horror story comes with a silver lining: a powerful lesson to enhance your hiring process and bolster your team dynamics. The Vampire – The Energy Drainer Traits: This hire sucks the positivity and energy out of your team, often leaving colleagues drained. Impact: Reduced team morale and productivity. Prevention: During interviews, ask behavioral questions that help you gauge a candidate’s influence on team dynamics. Consider including team members in the hiring process to assess chemistry. The Zombie – The Disengaged Traits: Goes through the motions but lacks initiative and passion. Impact: Minimal contribution to team goals and lack of contribution to goals. Prevention: Look for candidates who ask questions about company culture and show enthusiasm for the role because the job description accurately reflects the role’s responsibilities and opportunities for growth. The Mummy – Stuck in the Past Traits: Resistant to change and new ideas, insisting on doing things “how they’ve always been done.” Impact: Hinders adaptation and progress. Prevention: Look for candidates willing to learn new things. Ask them about situations where they had to adapt quickly or change their approach to succeed. Hiring Doesn’t Have To Be A Nightmare Each of these eerie archetypes teaches us that hiring is not just about filling a vacancy but about enriching our teams and aligning with our core values. Hiring should be strategic, and at FIREPOWER Teams, we understand that the right people are the lifeblood of any thriving business. Each new hire should contribute positively to the team’s dynamics and the company’s mission. Remember, hiring doesn’t have to be a nightmare. With the right tools and insights, you can spot red flags early and attract talent that fits the role and elevates your entire team. Let’s turn these horrors into opportunities. Happy Halloween, and here’s to making every hire a treat, not a trick! Maria Forbes and 

Sometimes the most sensitive question in family succession planning is “Who gets the office?” Dad’s (or Mom’s) office is usually perceived as the center of authority by the employees and other family members. That is where you got called on the carpet, where you were informed of promotions, or where you took an insolvable problem. When a parent/CEO is handing off operating responsibility, there is often a lag, sometimes measured in years, between stepping back from the daily decisions and completely separating from the premises. There is great value in having that experience available for coaching, mentoring, or just to lend perspective on new problems, but where should they sit? Timing The question of the appropriate timing for an owner to surrender his or her seat of power can be sensitive. The retiree often worries about becoming irrelevant. The fear ofappearingirrelevant is just as strong. The boss’s office is a symbol. Often the owner who is stepping down would rather have no office at all rather than a smaller, less prestigious location. I’ve seen owners elect to use the conference room as their “temporary” post. That can create other issues of its own. Are scheduled meetings now subject to last-minute relocation if the boss (who will always be the boss, regardless of title transfers) commandeers it for his own use? Equally distracting is when the conference room is scheduled as before. Then the boss arrives planning to do some work and winds up wandering through the offices looking for a place to camp out. Perception The situation is exacerbated when multiple children are assuming ownership. Who getstheoffice? Parents often have a vision of equality among their children. Ricky will handle sales, Peter does the accounting, and Ellie takes care of inventory and purchasing. The three will make business decisions jointly. Regardless of voting rights, or any amount of explanation to the employees, one of the children will be perceived as functioning at a higher level of authority by assuming possession of the boss’s office. As in George Orwell’sAnimal Farm, all are equal, but some are more equal than others. Family Succession Planning Settling who gets the boss’s office is an important part of any transfer. Too often it is treated lightly, only to be more seriously addressed after the issues are recognized. The symbolism of moving offices is strong, and sends a message to everyone. In some cases, remodeling to change the whole office configuration may be the best solution. New drywall is a cheaper fix than lingering resentment among shareholders or confusion in the ranks. It’s often the little things in family succession planning that matter. One owner who was continuing in his office after his son was named President asked what he could do to make their shared space better reflect the change. “Well Dad, “the son responded, “maybe you could take down those pictures of our fishing trip when I was 11 years old.”   This article was originally published by John F. Dini, CBEC, CExP, CEPA on

Posted on October 28, 2024 By White Water Consulting A family business constitution is a foundational document that outlines the principles, values, and operating guidelines for a family-run company. It serves as a roadmap, helping to align family members’ goals and expectations while offering a framework for governance, conflict resolution, and succession planning. Ultimately, it helps demystify business operations that can sometimes be complicated because of family dynamics—and ensuring this document is well-structured is essential for long-term business success and family harmony. Understanding the Purpose of a Family Business Constitution The primary purpose of a family business constitution is to establish a key set of shared values and vision that guide decision-making and behavior within the business. It clarifies roles and responsibilities, ensuring that everyone knows their contributions and the expectations set for them. Another crucial aspect of a family business constitution is its role in conflict resolution. After all, it’s quite common for family members to have differing opinions or approaches to business, which can lead to tension. Therefore, a constitution provides pre-established guidelines for addressing disputes… and realizing an environment based on open communication. Furthermore, it supports succession planning by outlining how leadership transitions will occur, confirming continuity as the company is handed off from one generation to the next. Key Components of a Family Business Constitution When crafting a family business constitution, consider these key parts: Family Mission Statement: This statement articulates the family’s core values and vision for the company. It should reflect what the family stands for and what they hope to achieve, serving as a guiding light for all decisions that are made. Governance Structure: A clear governance structure defines roles for both family and non-family members involved in the business. Creating a board or advisory committee can help manage business affairs more effectively and invite outside perspectives. Policies on Employment: Guidelines for hiring family members can prevent potential nepotism and attract top external talent. Additionally, the constitution should include policies for performance evaluations and accountability measures—and this should be inclusive of family members. Decision-Making Processes: Outlining how decisions are made is key for maintaining efficiency and reducing conflicts. This might entail who has final authority on specific issues and how family members can participate in discussions. Conflict Resolution Mechanisms: This document should also offer guidance on how disputes among family members are handled—and emphasize the importance of mediation and open dialogue. Succession Planning Guidelines: Planning for leadership transitions is vital for the sustainability of the business. The constitution should outline how future leaders are chosen and prepped for their roles. A Family Business Constitution is a Living Document As with any sort of business planning document or tool, a family business constitution is not a “set it and forget it” type of endeavor. Rather, it is a best practice to establish a schedule for regular reviews and updates. After all, family businesses evolve—just like any sort of organization. Therefore, the constitution should be adapted to sync with changing market demands, goals, and circumstances. Creating a family business constitution is a proactive step toward ensuring that family-run enterprises thrive, and a legacy is realized. WhiteWater Consulting would love to help you instill a sense of purpose and direction in your family’s company. Reach out to our team directly for more support!

Preparing your business for sale involves more than just financial tidying; it requires a holistic approach to optimize all aspects of the organization. By focusing on staffing and retention, and understanding the impact of unemployment tax, you can significantly enhance your business’s attractiveness to buyers. Leaders should be mindful of several key human capital implications beyond staffing and retention. Here are some additional factors to consider: 1. Leadership and Management Continuity ·      Stability at the Top: Ensure that the leadership team is stable and that there are succession plans in place. Buyers often look for continuity in leadership to maintain operational stability post-sale. ·      Management Depth: Assess the strength and depth of your management team. A strong, experienced management team adds value and confidence for buyers. 2. Workforce Skills and Competencies ·      Skills Inventory: Conduct a thorough assessment of the skills and competencies within your workforce. Identify any gaps and develop plans to address them. ·      Training and Development: Implement robust training and development programs to enhance employee skills and ensure they are aligned with the future needs of the business. 3. Employee Engagement and Culture ·      Engagement Levels: Measure and improve employee engagement. Highly engaged employees are more productive, loyal, and contribute to a positive work environment, which is attractive to buyers. ·      Company Culture: Foster a strong, positive company culture. A healthy organizational culture can significantly impact employee retention and overall company performance. 4. Compensation and Benefits ·      Competitive Compensation: Ensure that your compensation packages are competitive within your industry. This includes salaries, bonuses, and other incentives. ·      Benefits Programs: Evaluate your benefits programs to ensure they meet employee needs and are in line with industry standards. Attractive benefits can improve employee satisfaction and retention. 5. HR Compliance and Risk Management ·      Regulatory Compliance: Ensure that all HR practices comply with local, state, and federal regulations. Non-compliance can lead to costly fines and legal issues that could deter potential buyers. ·      Risk Management: Identify and mitigate HR-related risks. This includes having clear policies and procedures, proper documentation, and handling employee relations issues promptly and effectively. 6. Performance Management ·      Clear Metrics: Implement a robust performance management system with clear metrics and regular feedback. This helps in identifying high performers and areas needing improvement. ·      Recognition Programs: Develop programs to recognize and reward employee achievements. Recognition can boost morale and productivity. 7. Employee Communication ·      Transparent Communication: Maintain open and transparent communication with employees about the potential sale. Keeping employees informed can reduce uncertainty and maintain morale. ·      Change Management: Develop a change management strategy to guide employees through the transition. This includes providing support and addressing any concerns they may have. 8. Organizational Structure and Efficiency ·      Streamlined Operations: Evaluate and streamline your organizational structure to eliminate inefficiencies. A lean, efficient organization is more attractive to buyers. ·      Technology Integration: Ensure that your HR systems and technologies are up-to-date and integrated. This can improve efficiency and provide valuable insights into workforce performance. Minimizing Unemployment Tax to Maximize Your Sale Appeal When planning to sell a business, every aspect of the organization comes under scrutiny, from financial performance to operational efficiency. One often overlooked yet critical factor is staffing and retention, specifically how these elements impact unemployment taxes. Understanding Unemployment Tax Unemployment tax, a mandatory contribution that employers must pay, is influenced by the turnover rate within a company. Higher turnover rates lead to increased unemployment claims, which in turn raise the unemployment tax rate. For businesses looking to sell, a high unemployment tax rate can be a red flag to potential buyers, signaling underlying issues in workforce management and financial health. The Connection Between Retention and Unemployment Tax Employee retention plays a pivotal role in controlling unemployment tax rates. High retention rates generally indicate a stable and satisfied workforce, reducing the number of unemployment claims and, consequently, lowering the unemployment tax rate. Here’s how improving retention can benefit your business: 1.     Cost Savings: Lower turnover reduces recruitment, training, and onboarding costs. It also minimizes the administrative burden associated with managing unemployment claims. 2.     Increased Productivity: Long-term employees tend to be more productive, having accumulated valuable experience and knowledge over time. This boosts overall business performance, making your company more appealing to buyers. 3.     Enhanced Reputation: A strong retention rate reflects well on company culture and management practices. Buyers are more likely to invest in a business with a positive reputation for treating employees well. The Bottom Line When preparing to sell a business, addressing these human capital implications can significantly enhance the attractiveness of your company to potential buyers. By focusing on leadership continuity, workforce skills, employee engagement, compensation and benefits, compliance, performance management, communication, and organizational efficiency, you can create a solid foundation that not only improves your company’s valuation but also ensures a smooth transition post-sale.   Tagro Solutions is here to help you navigate this complex process, providing the expertise and support needed to position your business for a successful sale. For more information on how we can assist you, visit our website or contact us directly. Let’s work together to make your business an irresistible opportunity for potential buyers. info@tagrosolutions.com

This year has seen a surge in pay transparency laws aimed at curbing pay disparities and helping workers negotiate fairer wages. Such legislation requires employers to disclose salary ranges and benefits in their job postings. Colorado was the first to create a pay transparency law in May 2019. Prior to this year, a number of states have followed suit, including California, Connecticut, Maryland, Nevada, New York, Rhode Island, and Washington. Local measures are in effect in Jersey City, New Jersey; New York City, New York; Ithaca, New York; Westchester County, New York; Cincinnati, Ohio; and Toledo, Ohio. 2024 Legislation Almost Doubles the Number of Pay Transparency Laws Hawaii On January 1, 2024, Hawaiian legislation came into effect requiring employers with 50 or more employees to disclose hourly rates and/or salary ranges in job postings. Illinois Illinois’s pay transparency law requires employers with 15 or more employees to disclose the salary range of a position along with a description of benefits and other forms of compensation. Furthermore, this law requires employers to provide current employees with information on promotion opportunities within 14 calendar days after posting the position externally. The law is not effective until January 1, 2025. Maryland Effective October 1, 2024, Maryland’s Equal Pay for Equal Work – Wage Range Transparency legislation expands the law to mandate employers to disclose minimum and maximum hourly or salary ranges for a position. This requirement applies to internal and external job postings. The law applies to any job performed in part in Maryland, meaning the law applies to employers outside of the state if any aspect of the position is performed in the state. Minnesota The Minnesotan law requires a starting salary range and a description of benefits, including health and retirement benefits, and other compensation in postings for open positions. This applies to employers with 30 or more employees within Minnesota. The law takes effect on January 1, 2025. Vermont Signed into law this June, the Vermont pay transparency law will take effect on January 1, 2025. Employers with five or more employees must include minimum and maximum hourly/salary ranges, including whether tips or commissions will be paid, in job postings. This applies to roles performed in Vermont or remote positions performed for Vermont businesses. Washington, DC Washington, DC’s law has been in effect since March 25, 2024. Employers must post minimum to maximum salary ranges, including for promotions and transfers. Employers must believe in good faith that the ranges are what will be paid for the position. Additionally, employers must provide applicants with information on healthcare benefits and may not seek salary history information. The law applies to any job with at least one employee in Washington, DC. Key Takeaway for Employers While some states have yet to provide guidance on potential penalties, violating these laws may result in lawsuits and damages. Employers should review their current rates of pay, their hiring, promoting, and transferring practices, and update current job postings in anticipation of these laws taking effect. If your state has yet to pass such a law, keep a lookout as this trend continues to spread nationwide. Finally, when planning pay rates for one of these locations, look at local ads to see if you are competitive with the local market. Brody and Associates regularly advises management on complying with the latest local, state, and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.  

Cash flow normalization is done with the intention of identifying Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) or Seller’s Discretionary Earnings (SDE). These differing measures are not interchangeable, but are used by different classes of buyers for different categories of acquisition. Free cash flow is an important measure when calculating the value and price for any business. It is the amount theoretically available for servicing acquisition debt, working capital, return on investment for any cash outlay in the acquisition, and future expansion. Cash Flow Measures EBITDA establishes free cash flow as a measurement for most mid-market businesses. It evens out the differences in earnings caused by various tax jurisdictions. In the United States, there is federal income tax at the corporate level, but many states have additional income taxes, and in some cases, even smaller jurisdictions like cities may have their own income tax. These obviously impact the profitability of a company and could distort a buyer’s impression of its profitability. EBITDA calculations do not include the owner’s earnings, since the companies being examined are more likely to be acquired by investors who would replace the owner with a management executive. SDE is the measurement used to illustrate the sum total of financial benefits available to the owner-operator of a business. It assumes that the owner is running the company on a day-to-day basis. SDE encompasses not only salary, bonuses, and distributions, but includes insurance and other benefits such as a company-paid vehicle. A simple way to put it is that EBITDA is the cash flow available for a return on investment. SDE is the cash flow available for a return on the owner’s labor. Making  Adjustments In the SDE calculations, there are two places where there is often an adjustment of expenses to market. The first is for a family member employed in the business or partners who intend to leave simultaneously with the principal owner. In many instances, family members are paid according to their needs or the needs of the business instead of at a market rate for the position. With family members who are “underpaid” adjusting to the market rate will have the effect of reducing the cash flow available in the business. This reflects the fact that the family member or partner will have to be replaced by someone who is unlikely to work for a below-market salary. The opposite is of course true for family members or partners who are overpaid. Reducing their compensation to a fair market rate will add to the discretionary cash flow of the business. A second area of adjustment is when the owner of the company also owns the real estate that the company operates in. Again, the rents paid on the real estate often reflect the owner’s objectives more than they do the practical reality of the local real estate market. A company that is underpaying rent is having its bottom line shored up by the reduced income to the real estate entity. Overpayment of rent requires the owner to make a decision. If they expect the same rent from a new tenant, the profitability of the business as presented to a prospective buyer will be lower. Considering that most transactions involve a multiple of cash flows, you can usually point out to the owner that trying to maintain a higher rent is not in their interest as the seller of the company. Adjusting the rent to a market rate increases the cash flow of the company and presumably the basis for an evaluation multiple. Which Cash Flow is “Right?” The decision of whether to use EBITDA or SDE when calculating cash flow is dependent largely on the size of the client’s business. If the company has cash flow in excess of $1 million annually or is large enough to be a likely target for professional buyers, EBITDA is the appropriate measurement for cash flow. If the company is going to be purchased by family members, employees, or another entrepreneur and has a cash flow of less than $700,000, SDE is almost always a more appropriate measurement. Which cash flow is used is a situational decision and may change if different classes of buyers are being engaged.   This article was originally published by John F. Dini, CBEC, CExP, CEPA on

In recent years, workplace discussions around diversity and inclusion have gained unprecedented momentum. Unfortunately, one facet of this multifaceted issue often gets overlooked: ageism. By dispelling negative ageist cliches, we not only uphold the dignity of older workers, a fundamental aspect of respect, but also unleash the full potential of an experienced workforce. This shift in perspective can lead to a more inclusive, dynamic, and productive work environment where the wealth of knowledge that older employees bring is embraced and celebrated. The Reality of an Aging Workforce The statistics are clear 1. By 2031, workers aged 55 and older will make up over 25% of the U.S. workforce. Additionally, 41% of American workers plan to work beyond 65. These figures underscore the urgent need for a shift in perspective, as many companies overlook the wealth of experience and knowledge this demographic can bring to their team. The Impact of Negative Ageist Cliches Ageism, stereotyping, prejudice, and discrimination against individuals or groups based on their age are particularly pernicious in the workplace. Older workers often battle stereotypes that paint them as being out of touch, slow to adapt to new technologies, or less productive than their younger counterparts. These misconceptions can have profound effects for an individual and lead to an imbalance of problem-solving wisdom.  Bias of any kind will hurt the organizational bottom line.  Without a diverse workforce, an organization has too much of a good thing.  Leaders must be cognizant of the potential loss of valuable institutional knowledge, a crucial factor in organizational continuity. 1. Detriment to Team Member Morale and Motivation Persistent undervaluation of older workers can significantly impact their motivation and engagement. When employees feel dismissed or underestimated because of their age, morale, productivity, and ability to connect with their teams, decrease. This is harmful to both the individual and the organization. Age discrimination is real 2. Two out of three workers between ages 45 and 74 say they have seen or experienced age discrimination at work, and job seekers over age 35 cite age discrimination as a top obstacle to getting hired.  If you happen to work in the high-tech industry, your chances of experiencing age discrimination are even higher. 2. Lost Opportunities for Knowledge Sharing One of the most significant losses when older workers are sidelined is the missed opportunity for cross-generational knowledge transfer. Seasoned employees possess a wealth of experience, insights, and skills honed over years of service. This depth of knowledge is invaluable, particularly when paired with the fresh perspectives and tech-savviness of younger employees, creating a powerhouse of innovation and problem-solving capabilities. 3. Diminished Diversity and Inclusivity True diversity and inclusivity extend beyond ethnicity, gender, or sexual orientation and should encompass age.  A workforce that appreciates and leverages the strengths of employees across the age spectrum is more representative of society and is better positioned to respond to the needs of a diverse customer base. Older Workers: A Valuable Resource 1. Rich Experience and Expertise Older workers bring an unparalleled level of expertise and experience. Their years in the workforce equip them with a nuanced understanding of their industry, a comprehensive knowledge of company history, and a network of connections that can be leveraged for strategic advantages. 2. Stability and Reliability Older employees can often be depended on to present greater stability and reliability than their younger counterparts. They tend to have lower turnover rates, which translates to reduced hiring and training costs. Their dedication and loyalty to their roles contribute to a stable workforce, which is critical for long-term planning and growth. 3. Mentorship and Leadership Older workers are invaluable resources for mentorship and leadership within organizations. Their insight and guidance can help nurture the next generation of professionals, ensuring a legacy of knowledge and skills that support the company’s future success. In Conclusion, Embracing an Age-Diverse Workforce is a Competitive Advantage As the American workforce continues to work later into life, employers must make a concerted effort to create a workplace that values and promotes age diversity. Debunking negative ageist cliches and recognizing the invaluable contributions of older workers are essential steps toward building more inclusive, innovative, and successful organizations. By tapping into unique strengths and perspectives across the employee age spectrum, companies can enhance their competencies and competitiveness and foster a culture of respect and appreciation for a workforce rich in diversity of knowledge.   Citations Article by Growthspace: The hidden potential of older workers: A strategic advantage

Under the National Labor Relations Act, employers have the right to require their workers to attend meetings on the company’s position on unions (called captive audience meetings). Employers have also used mandatory meetings to discuss issues involving politics and religion. Such practices are now under attack. In July 2024, both Hawaii and Illinois joined New York, Connecticut, Minnesota, Maine, and Oregon in enacting laws which prohibit employers from mandating attendance at employer sponsored meetings on political (including unions) or religious matters. Enforceability of these laws is unknown. Hawaii Hawaii’s Captive Audience Prohibition Act (Hawaii Revised Statutes § 377-6) took effect July 2, 2024. The law prevents employers from penalizing or threatening any adverse action against employees who decline to attend an employer sponsored meeting which communicates the employer’s opinion on political matters. The Act defines political matters as “anything related to an attempt to influence a future vote by persons in an audience.” Such meetings are allowed as long as employee attendance is entirely voluntary. Illinois On July 31, 2024, Illinois Governor J.B. Pritzker signed the Worker Freedom of Speech Act (SB 3649) into law, which is set to take effect January 1, 2025. The Illinois law prevents employers from disciplining employees who choose not to attend employer sponsored meetings relating to political or religious matters. Attendance must be entirely voluntary which also means that the meeting is not “incentivized by a positive change in any employment condition.”  The Illinois law provides a more detailed definition of political matter: “matters relating to elections for political office, political parties, proposals to change legislation, proposals to change regulations, proposals to change public policy, and the decision to join or support any political party or political, civic, community, fraternal, or labor organization.”  Religious matters are defined as “matters relating to religious belief, affiliation, and practice and the decision to join or support any religious organization or association.” Under the Act, employees may bring a civil action seeking: injunctive relief; reinstatement to the employee’s former position or an equivalent position; back pay; reestablishment of any employee benefits, including seniority, to which the employee would otherwise have been eligible if the violation had not occurred; any other relief as deemed necessary by the court to make the employee whole; and reasonable attorney’s fees and costs if the employee prevails. Furthermore, the Illinois Department of Labor may impose a civil penalty of $1,000 dollars per violation. Each employee subject to a violation constitutes another separate violation. This law was challenged nearly immediately by the Illinois Policy Institute, which filed a federal lawsuit early this month. They argue the law infringes on employer’s freedom of speech and claim the law is too broad. Are bans on captive audience meetings legally enforceable? Despite National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo’s efforts to the contrary, the National Labor Relations Act (NLRA) currently allows employers to hold mandatory meetings where management campaigns against unions. Historically, bans on such captive audience meetings have failed. Section 8(c) of the NLRA states “[t]he expressing of any views, argument or opinion… shall not constitute or be evidence of unfair labor practice… if such expression contains no threat of reprisal or force or promise of benefit.” Furthermore, the NLRB ruled in Babcock v Wilcox Co., 77 NLRB 577 (1984) that employers under the NLRA may hold captive audience meetings. But note, none of this addresses banning non-union related mandatory meetings. In 2010, a similar law in Wisconsin was struck down in, Metropolitan Milwaukee Association of Commerce v. Doyle. The law was found preempted by federal law. More recently, in late July 2024, a federal judge permanently blocked part of Florida’s stop WOKE Act which attempted to prevent employers from holding mandatory meetings on viewpoints the state deemed offensive. Minnesota and Connecticut currently face ongoing challenges to their analogous version of the Illinois law. While precedent suggests these laws are not enforceable, this cannot be said concretely as there are many pending challenges. This leaves Employers in a difficult position; comply with state law to avoid any potential penalties, take the risk of penalties for violating the laws, or challenge the law in court.  Regardless of your choice, employers should follow the legal challenges these bans face, while keeping an eye on their own state’s regulations. As a final thought, Employers may consider holding non-mandatory meetings. While this avoids the real issue, it may be a good solution until this controversy is resolved, especially if attendance is not impacted. Seek legal counsel on how to do this. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.

What is your goal for your business? As fractional CFOs, when we first meet with our clients, this is among the first questions we ask. Your goals will inform much of our work supporting your company – whether we focus on preparing you for a near-future exit or growing and building the value of your business over time. This is what makes our fractional CFOs – many of whom are also CEPAs – a vital (and often missing) piece of the exit planning puzzle. Many business owners enlist exit planning experts as they approach the exit process, bringing in an army of resources to make the most out of what has already been built. A fractional CFO, however, becomes embedded in your business over time and, in the process, comes to serve as a value growth advisor – a financial expert who can help you 

We began this series by saying that Private Equity reputation is as the Great Satan to some, and a savior to others, depending on the personal experience of the speakers. In fact, both reputations are well deserved, but neither can be universally applied. The “Great Satan” Private Equity Reputation PEGs buy companies for the express purpose of improving their performance. That often comes with considerable pain for employees. A Searchfunder I know said recently “I’m looking at this acquisition because the owner thinks he is running an efficient company, where I see at least ten points that could be dropping to the bottom line.” Efficiency is good, but too often it flies in the face of what made a company successful. In one example I recall, the PEG principals spoke to the assembled employees the day after closing on the business. They said “We bought this company for its culture and its people. Those are the most important assets to us.” The cuts started coming the following Monday. Thanksgiving turkeys were “outdated.” Gone. All bonuses would be performance-based, so extra bonuses at Christmas would be discontinued. Season seats for the local sports franchise – gone. (Most of those went to customers.) Weekend overtime – gone. Schedules would be rearranged so that weekend workers were now scheduled for Saturdays and Sundays and got fewer hours during the week to make up for it. Employee discounts on the company’s products – gone. Partial subsidies for family health insurance, well by now you are getting the gist. The flood of cuts was shocking and seemed unending. The flood of resignations started soon after. By the way, the PEG missed its planned flip date (when they were supposed to sell to a bigger PEG) because of poor results and eventually took the company into Chapter 11. I wish I could say that this type of result was unique, but it happens in far too many cases. The “Savior” Private Equity Reputation There is another reality. About 50% of all the privately held employers in the United States are Baby Boomers. The youngest of these are now turning 60. Many have built substantial enterprises whose value is far beyond what a younger entrepreneur can afford. Private Equity has morphed into a many-headed creature, capable of acquiring almost any size business with value. It will never be for the mom-and-pop businesses that merely earn a living for the owner. As Doug Tatum says in

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On September 18, 2024, a panel of three Third US Circuit Court of Appeals judges heard oral argument from the National Labor Relations Board (NLRB) and Starbucks on the matter of consequential damages. At stake is the NLRB’s power to award damages for direct and foreseeable pecuniary harms that go beyond lost pay and benefits. The award of such things as credit card late payment costs and uninsured medical costs, fees for not timely paying other expenses, etc. are at issue. If such awards are within the NLRB’s authority, the damage awards in NLRB wrongful discharge cases could dramatically rise. Here is how we got to this point. In 2023, the NLRB ordered Starbucks to pay consequential damages in a case of the wrongful termination of two pro-union employees. Damages included “direct or foreseeable pecuniary harms incurred as a result of [the employees’ wrongful discharges.]” This case is one of many cases Starbucks faces alleging wrongful discharge of union supporters. If it losses, the monetary cost could be significant. By filing this appeal, Starbucks’s joins companies such as Amazon, SpaceX, and Trader Joe’s in challenging the NLRB’s constitutional authority to exert such enforcement powers. Traditionally, the Board would order reinstatement, backpay and lost benefits in a case of wrongful termination, however this was expanded in 2022. A Board decision in Thryv, Inc., 372 NLRB No. 22 (2021), held employees who are wrongfully terminated should also receive compensation for other pecuniary losses stemming from the termination. Examples include credit card cost, out of pocket medical expenses, mortgages related fees, etc. Such damages can quickly add up. In this latest Starbucks case, the Third Circuit considered Thryv  but also the US Supreme Court’s June ruling in Jarkesy v. U.S. Securities and Exchange Commission and its applicability to the NLRB. In Jarkesy, the Supreme Court found it was unconstitutional for the SEC to impose civil penalties in administrative cases. Such awards need to be awarded in a court. The Third Circuit must decide whether the expanded remedies sought by the NLRB would be considered “legal remedies” typically imposed by the courts as in Jarkesy or “equitable remedies” typically imposed by administrative agencies. Such administrative remedies are intended to benefit the worker rather than unfairly punish employers. The NLRB argued they have the authority to impose the remedies regardless of their status as legal or equitable. Not surprisingly, Starbucks argued allowing the NLRB to issue damages beyond backpay would violate their constitutional right to a jury trial and therefore was unconstitutional. The outcome is pending and regardless, it may well be appealed to the Supreme Court where the authority of various agencies is being curtailed. We will keep you informed. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560  

Passed in June 2024 and signed into law by New York Governor Kathy Hochul on September 5, the Retail Worker Safety Act is set to take effect March 4, 2025. The law mandates protections for retail employees including panic buttons, workplace violence prevention policies, and training. Who is covered? The law explains: Covered employers: any person, entity, business, corporation, partnership, limited liability company, or an association employing at least ten retail employees. Retail employees: employees working at a retail store for an employer. Retail Store: a store that sells consumer commodities at retail and which is not primarily engaged in the sale of food for consumption on the premises. The state, any political subdivision of the state, a public authority, or any other government agency is not covered by the law. Key Requirements The Act’s key requirements are the installation of panic buttons, implementation of workplace violence prevention policies, and training. The panic button requirement does not take effect until January 1, 2027, while the other requirements are effective March 2025. Panic Button Employers with more than 500 retail employees nationwide must provide employees with access to panic buttons across the workplace. Employers may opt for a physical button or mobile phone-based buttons. The requirements for each are slightly different. If the employer chooses to use a physical panic button it must contact the local 911 public safety answering point when pressed. Pressing the button must provide the answering point with the employee’s location and dispatch law enforcement. The button must be accessible or wearable. The mobile phone-based approach requires the button to be installed on employer provided equipment and is wearable. The mobile button may not track employee locations unless pressed.   Workplace Violence Prevention Policy Employers must adopt a written workplace violence prevention policy to be provided to employees upon hire and annually. The NY Department of Labor (NYDOL) will draft a model plan which will be evaluated every four years from 2027 onwards. Employers may adopt the NYDOL policy or create their own equivalent policy. The policy must: List factors or situations in the workplace which may increase the employees’ risk of workplace violence. Examples given include working late at night or early morning hours; exchanging money with the public; working alone or in small numbers; and uncontrolled access to the workplace. List methods of preventing workplace violence, including but not limited to establishing and implementing a reporting system. Provide information on federal and state laws regarding violence towards retail workers and remedies available for victims of workplace violence. Explicitly state that it is unlawful to retaliate against employees who report workplace violence or factors which place employees at risk of workplace violence. Workplace Violence Prevention Training Employers must provide training upon hire and annually. The NYDOL will provide interactive training which will also be evaluated every four years starting in 2027. Again, employers may opt to use the state provided training or provide their own equivalent. The training must: Include information on the Retail Worker Safety Act; Examples of steps employees can take to protect themselves; De-escalation strategies; Active Shooter drills; Emergency procedures; Instructions on how to use security alarms, panic buttons, and any other emergency devices; and A site-specific list of emergency exits and meeting places to be used in emergencies. Takeaways New York State retail employers should look at the state provided training and policies to adopt as their own or to ensure their own materials are compliant. For employers outside of New York it is important to keep your eyes peeled for creation of similar laws in your own state. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560      

Many consultants/advisors/coaches are serving business owners who resist the notion there might be significant, unrecognized issues in their company, or who believe they needn’t be concerned about issues they don’t know about.  Call it the Ostrich-Head-In-The-Sand Syndrome. As a consequence, consultants feel powerless to get their clients to take action in their own best interest.  From an exit planning perspective, being fully prepared for a future exit is one of those critical issues business owners may be inclined to ignore until it is too late. On Thursday, December 5th, join EvaluSys CEO Tom Bixby and XPX Charlotte founder in a discussion with Larry Gard, Ph.D., XPX Chicago member, executive coach, former longtime clinical psychologist who will help attendees get inside the head of business owners to: Feel confident in your ability to reach clients who resist identifying and confronting issues in their business. Generate client curiosity in your approach and interest in your recommendations. Have a significant impact on your clients’ success in ways they hadn’t anticipated. This program is scheduled for 45 minutes, to include significant opportunity for Q&A with Dr. Gard.  Don’t miss this important program helping you grow your power to create value for your advisory clients!

If you’re looking to attract an investor or an acquirer one day, expect them to dig into your sales and marketing process. If you’re a company that sells to other businesses, an investor will want to know where you get your leads from and how much each costs you to generate. They’ll want to know what technology you use to support your sales team. They’ll want to understand how your sales reps get meetings and how many appointments a good rep has each week. They’ll want to know the close rate of a high performer and how it compares to an average performer. The investor’s questions aim to gauge the scalability of your sales model under significantly higher investment rather than to assess your past performance. Acquirers love stumbling over a business where capital is the primary constraint to growth. They fall over themselves for a company with an efficient sales engine that needs more fuel (i.e., money). Most investors have lots of capital but struggle to find businesses with a sales system that won’t collapse under the weight of more money. How Gregg Romanzo Built a Sales System In 2004, Gregg Romanzo started an old-school freight brokering business. Most freight brokers are nothing more than a handful of people arranging shipments in return for razor-thin margins, but Romanzo realized his sales model had the potential to grow into something much bigger. Romanzo’s model involved hiring high-potential people with a relatively modest base salary of between $40,000 and $60,000 per year and teaching them the business from scratch. He armed them with a computer and access to the best scheduling software and tied their variable compensation to the gross margin of the jobs they booked. Romanzo knew if he could get a rep to clear $100,000 per year in total compensation, he could keep them for the long run. Romanzo took his very best talent—the top one or two percent—and built a team around them so they could earn even more. This cohort of salespeople could clear three, four, or even five hundred thousand dollars in an exceptional year. Since Romanzo paid a relatively low base salary and his people didn’t need much equipment, he could hire many salespeople. By the time he sold his company, he had 200 employees, 190 of whom were salespeople. That’s 95% of his headcount dedicated to sales. How does that compare to your company? If you have a winning formula you think would hold up if you doubled or quadrupled your sales team, consider monetizing the sales model you’ve created. Either hire more reps or show a deep-pocketed investor or acquirer how durable your sales model is and how all you need is their capital to grow it.

Halloween isn’t just a time for ghosts and goblins; it’s also a perfect moment to explore those spine-chilling hiring stories that haunt every small business owner’s dreams. At FIREPOWER Teams, we’re all about turning fears into cheers by empowering actionable strategies and strengthening teams. Let’s face the horrors—a bad hire can lurk in the shadows, embodying the kind of nightmares that disrupt teamwork and stifle growth. But fear not! As you learn about these ghastly characters, remember that each horror story comes with a silver lining: a powerful lesson to enhance your hiring process and bolster your team dynamics. The Vampire – The Energy Drainer Traits: This hire sucks the positivity and energy out of your team, often leaving colleagues drained. Impact: Reduced team morale and productivity. Prevention: During interviews, ask behavioral questions that help you gauge a candidate’s influence on team dynamics. Consider including team members in the hiring process to assess chemistry. The Zombie – The Disengaged Traits: Goes through the motions but lacks initiative and passion. Impact: Minimal contribution to team goals and lack of contribution to goals. Prevention: Look for candidates who ask questions about company culture and show enthusiasm for the role because the job description accurately reflects the role’s responsibilities and opportunities for growth. The Mummy – Stuck in the Past Traits: Resistant to change and new ideas, insisting on doing things “how they’ve always been done.” Impact: Hinders adaptation and progress. Prevention: Look for candidates willing to learn new things. Ask them about situations where they had to adapt quickly or change their approach to succeed. Hiring Doesn’t Have To Be A Nightmare Each of these eerie archetypes teaches us that hiring is not just about filling a vacancy but about enriching our teams and aligning with our core values. Hiring should be strategic, and at FIREPOWER Teams, we understand that the right people are the lifeblood of any thriving business. Each new hire should contribute positively to the team’s dynamics and the company’s mission. Remember, hiring doesn’t have to be a nightmare. With the right tools and insights, you can spot red flags early and attract talent that fits the role and elevates your entire team. Let’s turn these horrors into opportunities. Happy Halloween, and here’s to making every hire a treat, not a trick! Maria Forbes and 

Sometimes the most sensitive question in family succession planning is “Who gets the office?” Dad’s (or Mom’s) office is usually perceived as the center of authority by the employees and other family members. That is where you got called on the carpet, where you were informed of promotions, or where you took an insolvable problem. When a parent/CEO is handing off operating responsibility, there is often a lag, sometimes measured in years, between stepping back from the daily decisions and completely separating from the premises. There is great value in having that experience available for coaching, mentoring, or just to lend perspective on new problems, but where should they sit? Timing The question of the appropriate timing for an owner to surrender his or her seat of power can be sensitive. The retiree often worries about becoming irrelevant. The fear ofappearingirrelevant is just as strong. The boss’s office is a symbol. Often the owner who is stepping down would rather have no office at all rather than a smaller, less prestigious location. I’ve seen owners elect to use the conference room as their “temporary” post. That can create other issues of its own. Are scheduled meetings now subject to last-minute relocation if the boss (who will always be the boss, regardless of title transfers) commandeers it for his own use? Equally distracting is when the conference room is scheduled as before. Then the boss arrives planning to do some work and winds up wandering through the offices looking for a place to camp out. Perception The situation is exacerbated when multiple children are assuming ownership. Who getstheoffice? Parents often have a vision of equality among their children. Ricky will handle sales, Peter does the accounting, and Ellie takes care of inventory and purchasing. The three will make business decisions jointly. Regardless of voting rights, or any amount of explanation to the employees, one of the children will be perceived as functioning at a higher level of authority by assuming possession of the boss’s office. As in George Orwell’sAnimal Farm, all are equal, but some are more equal than others. Family Succession Planning Settling who gets the boss’s office is an important part of any transfer. Too often it is treated lightly, only to be more seriously addressed after the issues are recognized. The symbolism of moving offices is strong, and sends a message to everyone. In some cases, remodeling to change the whole office configuration may be the best solution. New drywall is a cheaper fix than lingering resentment among shareholders or confusion in the ranks. It’s often the little things in family succession planning that matter. One owner who was continuing in his office after his son was named President asked what he could do to make their shared space better reflect the change. “Well Dad, “the son responded, “maybe you could take down those pictures of our fishing trip when I was 11 years old.”   This article was originally published by John F. Dini, CBEC, CExP, CEPA on

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