Employees

In Muldrow v. City of St. Louis, the Supreme Court tackled a very important question: under Title VII (the federal civil rights law), when is a job transfer discrimination? The Background Title VII makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”  42 U.S.C.S. § 2000e-2(a)(1) (emphasis added). Under Title VII, certain job transfers fall within the “otherwise to discriminate” catch-all. But not all job transfers are illegal. Most circuit courts have read in the requirement that a job transfer be “significant.”  This standard yielded some surprising results: An engineering technician is transferred to a new job site— a 14-by-22-foot wind tunnel. The court rules the transfer does not have a “significant detrimental effect.” Boone v. Goldin, 178 F.3d 253 (4th Cir. 1999). A shipping worker is transferred to a night shift position; a court decides the assignment does not “constitute a significant change in employment.” Daniels v. UPS, 701 F.3d 620 (10th Cir. 2012). A school principal is forced into a non-school-based administrative role supervising fewer employees; a court again finds the change in job duties was not “significant.” Cole v. Wake County Board of Education, 834 F. App’x 820 (4th Cir. 2021). The Ruling In Muldrow, Muldrow alleged she was transferred to a lesser position because she is a woman.  Both parties agree that the transfer implicated “terms” and “conditions” of Muldrow’s employment, changing the what, where, and when of her police work. The lower courts ruled the job transfer was not discrimination because the changes were not “significant.” The Supreme Court rejected the lower court’s analysis—asserting that “significant” is not statutorily derived and, therefore, is an improper inquiry. Moreover, “neither [the Statute] nor any other [law] say anything about how much worse [the transfer must be].  There is nothing in the provision to distinguish, as the courts below did, between transfers causing significant disadvantages and transfers causing not-so-significant ones.” What did the Supreme Court offer in the place of “significant?” The Court explained, “[t]o make out a Title VII discrimination claim, a transferee must show some harm respecting an identifiable term or condition of employment.” With the stroke of a keyboard, the past 60 years of common law was vacated, and Muldrow’s case remanded. What This Means Underlying this case is the concept that illegal discrimination must involve not only discrimination, but discrimination that causes harm. Lower courts will now duke it out over what is “some harm.” However, the result is clear: it is no longer safe to assume job transfers rarely cause any “harm.”  If you are considering transferring an employee who may claim discrimination, you should evaluate the “harm” caused by the transfer. 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

Last month, the Boston Regional Office of the National Labor Relations Board (the “NLRB”) ruled that members of the Dartmouth men’s basketball team are employees and as such have the right to unionize. Wasting no time, yesterday, the Dartmouth men’s basketball team voted 13-2 to unionize.  Many educational industry onlookers saw this as the necessary next step in granting employment status to all college athletes – not just the national powerhouses. Although the decision is expected to be appealed, there is no doubt the decision, if upheld, will mark a seismic shift in collegiate athletics.  Why?  Because if Dartmouth men’s basketball players are employees, then arguably all collegiate athletes, both men and women, in all divisions, should also be considered employees eligible for unionization and maybe even compensation. Why Does this Sound Familiar? For those of you who follow college athletics closely or who happen to be closet labor and employment law buffs, you will know the recent Dartmouth NLRB decision is not unprecedented.  In fact, a similar ruling was issued nearly a decade ago when the Northwestern football players were determined (by a different Regional Office of the NLRB) to be employees and able to unionize. However, back then, a unanimous NLRB overturned that decision. One of the reasons the NLRB overturned the lower decision was because the NLRB only has jurisdiction over private employers. Although Northwestern is a private school it competes in the Big Ten athletic conference, which, except for Northwestern, was comprised exclusively of public universities at that time.  The NLRB found it should not exercise jurisdiction over the matter because permitting one school in the conference to collectively bargain (and therefore pay their athletes) and not the others would be detrimental to college athletics because the playing field would no longer be level among different schools.  While some found this argument weak, it carried the day. What’s Next? Fortunately for the Dartmouth men’s basketball team, the above argument will not be an issue this time as Dartmouth competes in a conference composed entirely of private schools, the Ivy League. Likely even more important, the NLRB’s General Counsel (chief prosecutor), Jennifer Abruzzo, has previously come out strongly in favor of student-athletes being treated as employees protected under the National Labor Relations Act. Despite all of this, the process will not be a slam dunk for the basketball team (sorry, we could not help ourselves).  While the next step is a hearing before a pro-union, Biden-appointed NLRB, the following step(s) will be the federal courts and what happens there is uncertain. Both Dartmouth and the NCAA have come out strongly against the decision insisting that their athletes are not employees but rather unpaid amateur students. The NCAA also predicts dire consequences for college athletics if athletes become subject to the NLRA (and other federal and state employment laws). For example, if athletes are “employees” under the wage and hour laws, they are entitled to pay- which is a direct violation of the NCAA’s prohibition against “pay for play.” As a result, we expect an exhaustive legal battle that will take years to play out.  Unfortunately for Dartmouth and the NCAA, these legal challenges will work their way through a court system that recently delivered a major win to college athletes in an antitrust case that went all the way to the Supreme Court.  If that is where this latest case ends up, it will be heard before many of the same justices who unanimously found against the NCAA when it decided the NCAA’s imposition of strict limits on compensation for student-athletes for education-related benefits violated antitrust law. While the appeal is pending,  we expect to see an influx of other petitions filed by other student-athletes to have their teams unionized. Union activity on college campuses is already high; this decision will likely just make it higher. If the student-athletes are ultimately successful, these actions could lead to a complete upheaval of athletic programs on college campuses. Imagine if colleges can give their star athletes massive salaries. The smaller programs will almost never be able to attract top talent which means only the richest few will be competitive.  We may have seen our last Cinderella story. Closing Thoughts The time seems right for the NLRB to act on this issue. With the strong pro-labor tailwinds currently in Washington, D.C., it seems likelier than not that this ruling will be upheld by the NLRB.  What happens on appeal to the federal courts is anyone’s guess and could ultimately be decided by who wins the White House later this year. We will monitor this issue closely and provide our readers with updates as they become available.  Brody and Associates regularly advises its clients on union-related matters and provides union-free training.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.

On February 21, 2024, the National Labor Relations Board (“NLRB”) ruled that Home Depot violated the National Labor Relations Act (“NLRA”) by terminating an employee who refused to remove the hand-drawn letters “BLM” (Black Lives Matter) from their work apron. This employee was one of several employees who concurrently drew BLM on their work aprons. Notably, the employees began drawing BLM on their aprons after complaining about racial discrimination at Home Depot. The NLRA protects employees’ right to partake in “concerted activities” aimed at “mutual aid or protection,” irrespective of union representation. In this case, the Board decided the employee’s refusal to remove BLM markings constituted a “concerted” action. The Board emphasized that the BLM markings were in response to allegations of racial discrimination at Home Depot. Because of this, the BLM markings were viewed as an effort to communicate collective grievances to Home Depot management. Given that racial discrimination affects all employees’ working conditions, the action was deemed “for mutual aid or protection.”   The Whole Foods Counterexample In contrast to this case, in May 2020, Whole Foods informed its employees that wearing BLM attire violated the company’s dress code and was not permitted. In this case, the Board ruled that wearing BLM attire did not constitute legally protected activity. Why? The BLM attire lacked a direct link to efforts aimed at enhancing employees’ working conditions. The judge highlighted, “There is no evidence indicating any employee concerns, complaints, or grievances regarding ‘racial inequality’ or racially-based discrimination at Whole Foods Market before or during the adoption of BLM messaging . . . . The evidence convinces me that the employer simply sought to avoid controversy and conflict within its stores, which it believed would arise from BLM messaging.”   Now what?          Employers aiming to uphold uniform or clothing regulations should exercise careful consideration. When employees unite behind a symbol to voice their workplace grievances, regardless of its broader political implications, that symbol is likely protected under the NLRA. Conversely, if employees wear a symbol entirely unrelated to the workplace that is merely social commentary, employers can prohibit such conduct.   Brody and Associates regularly advises management on all issues involving unions, staying union-free, complying with the newest decision issued by the NLRB, and training management on how to deal with all these challenges.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.  

It’s midnight. Your recycling bin is overflowing with rejected resumes. Your eyes can barely focus on the letters in front of you — and you have this uneasy feeling that you are about to invest in another candidate who just isn’t going to work out. This has been a vicious cycle over the past several years, and you find yourself asking yet again,” Why can’t I find the right salespeople?” You’ve spent an excessive number of hours and are well into six figures in budget dollars hiring, training, firing, and rehiring. You’re losing credibility in the marketplace because your customers are continually being introduced to new reps. With each salesperson that doesn’t work out, you can feel your employees questioning your leadership and the direction the company is headed. And this last candidate… they checked every single box. An ideal candidate with a promising start. Industry experience. Excellent references. High performance everywhere they went. You gave them everything they wanted only to discover they weren’t what they appeared to be. How could you have been so wrong about yet another candidate, a supposed “A-Player” who just couldn’t deliver the level of success they promised in the interview. Instead of burying yourself in another pile of seemingly perfect resumes, it might be time to take a step back. Key Article Takeaways: ·       Pitfalls that prevent A-players from performing in a new sales environment ·       How to lay out a sales roadmap to generate consistent results ·       Key sales leadership focus areas that pay dividends Time to Slow Down to Speed Up Some organizations seem to have it all figured out: low sales turnover; tremendous growth; happy employees doing what they love. Sure, when things go right, everyone is happy. But when issues continuously arise that take your top salespeople away from their outbound calls to chase down problems or they are struggling to know where to focus their effort, there’s likely a more significant issue at hand. By all means, keep searching for the best and brightest salespeople – the ones you know have the talent and desire to excel in your organization. But before you get too far in the process, take a step back and examine your sales readiness. · Are you setting your salespeople up for success right off the bat? · Are there things you know you could do better but haven’t had the time to fix? · Are you doing everything you should be to create a sales culture that allows anyone you hire the opportunity to see success? Structure: Another pitfall that can derail even the best A-Player is when an organization does not have the proper infrastructure to support its sales efforts. This encompasses a wide range of elements from staff structure to the necessary systems to measure and manage performance. For example, creating clear lines of accountability for all roles and functions that interface with the customer will bring clarity to performance expectations. This prevents time-consuming distractions and fosters a customer centric culture. Another area of structure involves the method in which your prospect and customer segments are designated and managed. This provides your customers with a consistent experience and enables your sales resources to be positioned in their areas of strength. These best practices create a solid platform for your salespeople to work from. Then, layering on the appropriate systems to capture sales activity, report on key metrics, manage sales pipeline, etc., allows you and your leadership team the critical visibility needed to keep a pulse on how the business is progressing toward its goals. As you assess your performance in this area, consider the consistency of your weekly one-on-one sales meetings for individual planning and mutual accountability. Given the reliance of the salesperson on their sales manager, powerful outcomes are produced when both sides are willing to be accountable to the other. Another important area to review is the level of value your sales meetings deliver to the team. Lastly, keep track of how often you participate in sales calls — both in-person and video calls, and how often you are creating powerful learning moments for your reps through these interactions. Are you struggling to find the time to apply this level of focus? Do you recognize there are times when you aren’t sure how to confidently lead and develop your salespeople? These common needs in small to mid-sized businesses were the driver behind my decision to transition my extensive VP Sales background to help top executives on a fractional or interim basis. If you’d like to have a preliminary discussion about the sales challenges you are facing, please feel welcome to contact me through any of these methods: 413-626-7040 , kdonovan@salesxceleration.com or book a call through my

On January 9, 2024, the Department of Labor (“DOL”) announced a six-factor test for determining whether a worker is an independent contractor or an employee under the Fair Labor Standards Act (“FLSA”). This new rule takes effect on March 11, 2024. Classifying workers as independent contractors or employees is extremely important—independent contractors do not receive the protections afforded by the FLSA such as overtime pay, minimum wage, and other requirements. The DOL’s six factor test considers: opportunity for profit or loss depending on managerial skill; investments by the worker and the potential employer; degree of permanence of the work relationship; nature and degree of control by the company; extent to which the work performed is an integral part of the potential employer’s business; and skill and initiative. In addition, the DOL utilizes a totality-of-the-circumstances economic reality approach, which allows consideration of other relevant, but not named, factors, which “in some way indicate whether the worker is in business for themself.” Consider the following checklist if your company engages independent contractors. It encompasses the Department of Labor’s (DOL) new six factors along with a series of questions posed by the DOL pertaining to each factor. Each question is accompanied by a parenthetical indicating whether it favors Independent Contractor or Employee status. Every instance where you mark a box designated as “Employee” or refrain from marking a box labeled as Independent Contractor increases the likelihood of your worker being classified as an employee. Keep in mind, this area of law is highly intricate, and the repercussions for misclassification are substantial. If you harbor any uncertainties, it is advisable to seek the guidance of competent legal counsel. The Factor Things to Consider Opportunity for profit      Can the worker negotiate the charge or pay for the work?  (Independent Contractor)      Does the worker accept or decline jobs? (Independent Contractor)  Does the worker choose the order and/or times in which the jobs are performed? (Independent Contractor) Does the worker engage in marketing or other advertising efforts? (Independent Contractor)   Does the worker make decisions to hire others? (Independent Contractor)  Does the worker independently make decisions to purchase materials? (Independent Contractor) Investments by the workers  Does the worker receive unilateral directions to purchase specific equipment? (Employee)   Does the worker have investments in a business that indicate the worker has an entrepreneurial investment their own company? (Independent Contractor) Degree of permanence   Is the worker working for the company for an indefinite period? (Employee)    Is the worker exclusively working for the company? (Employee)    Is the worker project-based or sporadic? (Independent Contractor) Nature and degree of control     Does the worker set their own schedule? (Independent Contractor)      Is the worker’s work supervised closely? (Independent Contractor)  Is the worker permitted to work for others? (Independent Contractor)    Does the worker have the right to discipline their own workers? (Independent Contractor) Does the worker get to set prices or rates for services and the marketing of the services or products provided by the worker? (Independent Contractor) Relation to employer’s business      Is the work performed by the worker “critical, necessary, or central” to the company’s primary business? (Employee) Skill and initiative     Does the worker use specialized skills for the work and “those skills contribute to business-like initiative?” (Independent Contractor)    Did the employer provide training for the worker to attain the requisite skills? (Employee)   Brody and Associates regularly advises management on complying with the latest state and federal employment laws. The subject matter of this post can be very technical. It is also an evolving area of law and very fact specific. Our goal here is to simply alert you to some of the new laws which may impact your business.  It is not intended to serve as legal advice. We encourage you to seek competent legal counsel before implementing any of the new policies discussed above.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.  

The Occupational Safety Health Administration (“OSHA”) and the National Labor Relations Board (“NLRB”) recently joined forces through a new Memorandum of Understanding (“MOU”). Their goal, to further enhance collaboration between the two agencies during investigations and enforcement actions against employers. The move is expected to further blur the lines between the two agencies and the laws they look to enforce. The likely result is increased unfair labor practice charges filed with the NLRB and citations from OSHA. In a joint press release, the agencies hailed the MOU because many worker efforts to improve safety and health in their workplaces are protected under both the Occupational Health and Safety Act (“OSH Act”) and the National Labor Relations Act (“NLRA”, the NLRA and OSH Act, collectively referred to as the “Acts”). The NLRB and OSHA have historically engaged in cooperative efforts and have entered into formal Memoranda of Understandings to engage in interagency coordination since 1975. Last month’s MOU allows the agencies to more broadly share information, conduct cross-training for staff at each agency, partner on investigative efforts within each agency’s authority, and enforce anti-retaliation provisions. Specifically, the MOU expands upon a previously proposed OSHA rule that allows employees to select an outside third party to accompany an OSHA compliance safety and health officer (the “CSHO”) during on-site inspections. Current regulations limit this choice of who can accompany the CSHO to only current employees or a third party with specialized safety knowledge.  However, the newly proposed rule will significantly broaden who is permitted to attend such an investigation by allowing any third-party representative “reasonably necessary” for the inspection. Does this mean any union representative is “reasonably necessary?” Time will tell, but you can be sure that is the union’s interpretation.   What does this mean to you and your Business?   It means, among other things, employees could designate a union official to attend the inspection as their third-party representative even if the employees are not currently unionized, and even if the union representative has no safety experience.   The MOU encourages the exchange of information between the agencies, including the referrals of complaints, as well as investigative files. Further, the MOU guides OSHA to advise employees who miss OSHA deadlines for claims (which are only a matter of days) to file a ULP with the NLRB instead (and use their six-month deadline).  This collaboration even goes as far as fostering cross-training each agency’s employees to enforce the other’s statute.   Additionally, the MOU goes on to have the NLRB and OSHA commit to coordinating investigations and inspections to “facilitate enforcement actions.”   This last piece is a real concern for employers as it poses the risk that the NLRB may be provided with information beyond its usual reach, which could lead to the potential of simultaneous filing of ULP charges and OSHA complaints.   For companies currently dealing with union activity, the MOU heightens the need to stay vigilant regarding workplace safety.  Companies with active or potential union engagement may witness employees leveraging OSHA as an additional pain point for owners.   We encourage all employers to familiarize themselves with their rights under both Acts and seek competent employment law counsel to best navigate and defend a coordinated investigation should one arise.   Brody and Associates regularly advises its clients on union-related matters and provides union-free training.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.      

Happy New Year – and may 2023 be a prosperous and fulfilling year for you and yours! With that aspiration in mind, I’d like to pose an important question about goals, a big question we make a habit of sharing with our clients at this time of year. Every December, it seems, we set goals for ourselves (sometimes also known as “resolutions”) in a well-meaning effort to create sustainable positive change in our lives. And every January or February (or maybe March in a good year), most of us look back on those goals with a mixture of stress, denial, and regret because we know we didn’t follow through on them in the way we’d hoped we would. So the big question is, how do we break that cycle and set goals that stick? Here are seven powerful goal-setting tips we share with our clients that turn “resolutions” into results.   Tie the goal to something truly important to you as a person. (Spoiler alert: It isn’t money.) Each of us has at least one unique life goal that means a great deal to us on a deeply personal level. I don’t know what that goal is for you: it might be a trip around the world, a significant charitable contribution that helps you honor the memory and legacy of a loved one, a fabulous new present you and your significant other can enjoy together all year long – something you know will bring you closer together. The possibilities are endless. I do know, though, that we all work harder for our personal goals than we work for somebody else’s. This year, let’s make a change. Instead of setting a goal based on depositing a certain amount of money, instead of setting a goal based on attaining a business goal that someone else has set for you, why not take the time to identify a goal that motivates you personally in a profound way? Then you can find a way to connect that powerful personal goal to a financial or business goal. For instance: Don’t just make the goal to earn your bonus; make the goal to earn the bonus so you can take that trip around the world that’s on your bucket list. Take a well-rounded approach. There’s nothing wrong with financial goals, of course. All the same, it’s important to set goals in several different areas of your life. Think of multiple goals that will motivate you to change the status quo for the better in terms of sales, health, spirituality, work, creativity, friends, mindset, and family. And once you have a sales goal that motivates you, you will also want to consider setting sub-goals that support your larger sales goal (such as daily behavioral and activity goals, account management goals, upselling goals, and cross-selling goals). Do this for each of the categories. Take some time to create a list of goals that goes both wide and deep! Once you’ve set a specific goal, break it into actionable, measurable chunks. Breaking the goal into smaller numbers allows you to identify the activities necessary to achieve it and track your progress toward attaining it. For example: To make my bonus, I want to secure twelve new clients, each with an average sales of $X. That means I need three such clients each quarter, which, based on my current numbers, I need to talk to Y number of new decision-makers each week and deliver Z number of presentations each month. Write your goals down and speak about them often. This simple step dramatically improves the statistical likelihood that you will achieve the goal. Build accountability. Once you have identified goals that genuinely matter to you, it’s a good idea to share your list with others you trust and discuss it with them. You may also want to consider creating an accountability-partner relationship with someone willing to share their goals with you, hold you accountable, and be held accountable in turn. Adjust as necessary. If you reach a point where you’ve exhausted your motivation and willingness to attempt to reach the goal, or if you find the goal you set was unrealistic, revise your goal. In the present tense, what you’re after is a goal that makes you feel that you are working toward something important. Find a goal that inspires you and that yields measurable signs of progress over time. Reward yourself. Sheryl Crow once sang, “Making miracles is hard work – most people give up before they happen.” Those words are essential reminders that much effort goes into achieving a meaningful goal. When you hit one, be sure to do something to celebrate! Follow these simple guidelines, and your experience with ineffective New Year’s “resolutions” that start fading on January 1 will be completely transformed.

As we’ve discussed in previous posts, quiet quitting is a phenomenon that’s here to stay. This workplace trend has inspired millions of employees to “act their wage,” which is to say, setting boundaries and choosing not to go above and beyond their basic job description. Evidence shows that quiet quitting is common, and that it’s resulted in a significant erosion of engagement, productivity, and morale. But while managers and HR leaders may not have the power to end this phenomenon, there is much they can do to address it proactively. How to Address Quiet Quitting 1) Talk to your people. There are any number of reasons why employees might disengage, but often it boils down to the feeling that leaders don’t really care about them or don’t do enough to support them. Start by simply asking employees how work is going, and how the company can better support them. One-on-ones, town halls, and employee surveys may all be appropriate forums. Help employees to see that you care. As employees present problems or frustrations, it’s important that you show them that their concerns aren’t falling on deaf ears. You may not be able to solve every problem, but you can often provide greater resources. You can also invite employees to collaborate with you, working together to arrive at creative solutions. Again, the point isn’t so much to fix every problem. The point is to help employees feel seen, heard, cared for, and engaged in decision-making. 2) Recognize employees. Employees can feel disengaged when they feel like their contributions to the team aren’t seen or aren’t celebrated. We’d recommend creating a culture of celebration, where you take time on a regular basis to have team leaders and managers acknowledge the good work their personnel are doing. And when the whole team scores a big win (completing a major project, bringing in a huge new client, exceeding sales benchmarks), that’s definitely an occasion for a team lunch or some treats around the office. 3) Provide mentorship opportunities. Still another reason why employees succumb to “quiet quitting” is the feeling that their career trajectory is stalled, or that the organization doesn’t support their development or advancement. Creating an environment where each individual feels valued is paramount to a business and the level of success it achieves. Leadership who understands this and executes a strategy that pulls the best of each generation together, fitting it into the purpose of the organization, will become an employer of choice in the marketplace. A simple way to address this is by creating a mentorship program in your company that allows for a younger employee to learn from the more senior employee and through reverse mentoring relationships that allows for the younger employee to mentor a more experienced employee. The result often leads to a deeper personal connection and a more meaningful professional relationship between the employees. Take Action Against Quiet Quitting These steps may not put an end to the quiet quitting phenomenon, but they can go a long way toward keeping a majority of your team members fully engaged. Questions? We’d love to talk further about this. Reach out to WhiteWater Consulting today and pickup a copy of our book “Unprecedented” to learn more.  

By Robert J. Brody and Luis A. Torres   California passed two laws that require diversity for certain corporate boards.  The first required diversity based on gender and the second for “underrepresented communities.”  The  effective date and required amount of representation varies based on board size.  In two separate actions, each law was found unconstitutional. The underlying challenge is these laws violate the equal protection laws since each law is declaring different treatment of equal people based on sex or other protected characteristics such as national origin or ancestry.  For these laws to pass muster, they must be found to correct unlawful conduct, not merely a societal history of unfair under representation. This issue is far from over.  California’s Secretary of State has already announced these cases will be appealed.  Regardless of what happens in California, other states are likely to follow suit.  Of course, if the laws are ultimately upheld, the number of states to follow suit will likely increase dramatically.  Time will tell. 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

May 20, 2022 By Robert G. Brody and Luis A. Torres As of July 14, 2022, New York will be launching a statewide toll-free confidential hotline that will provide counsel and assistance to individuals with concerns about workplace sexual harassment. Employers will be required to include the hotline number in any sexual harassment postings and policies. Employers should update any of their policies and materials to reference the Hotline prior to July 14. In addition to the new hotline law, New York State expanded the definition of retaliation for purposes of discriminatory practices by employers. The new definition includes employers disclosing employee files because the employee has (1) brought a claim of unlawful discrimination, including sexual harassment; (2) opposed a practice forbidden by the discrimination laws; or (3) filed a complaint, testified, or assisted in a discrimination proceeding. This law gives employees a private right of action if employers release personnel files to discredit the employee or for any other retaliatory purpose. Employers should update their policies to reflect these changes. Brody and Associates regularly advises businesses on handbooks and 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

In the Great Recession, I went from being an employee in banking to being an employer and launching my own business. Upheaval has become the new normal as the pandemic led many to reevaluate their jobs and more. In the Great Resignation, 4 million workers have quit their jobs so far. This could signal a change in thinking, which might lead many to transition to being their own boss. Currently, I’m working with a 4-person management team who have been together 15-20 years; they know, like, and trust each other. The owners, Baby Boomers, are ready to retire and are looking for an exit. This 4-person team is looking to make the shift from being employees to employers.  Not every employee wants to become an employer. So, what motivates someone to become a business owner?

Join us on Wednesday, February 9 from 10-10:45am for our next free, virtual edition of our Scaling Skills Speaker Series when Jennifer Montellanico, a seasoned Business Performance Advisor with Insperity, will be talking with us about current strategies to attract and retain top talent. Please feel free to invite others, and we look forward to seeing you soon! Here is the Zoom link for the presentation:

  Prove the Rolling Stones Wrong in 2022 By Essie Escobedo, Chief Executive Angel, Office Angels   COVID-19 was the first pandemic that most of us had ever lived through. The experience taught us a lot – how to work from home, how to homeschool our children, and how to live in isolation – away from those we love. The pandemic also showed us that while you can’t always get what you want, you just might get what you need. More than a few of us took a look at the way we were living in the past two years and decided it was time for a change. A new mindset emerged – one focused on the freedom and flexibility to control your own destiny and shape your own life. The Great Resignation reached from the mailroom to the board room. Today, flexibility is the fastest-growing job requirement in the United States, and more than half of all Americans want to find themselves self-employed the next time they change jobs. These new business owners and budding entrepreneurs will need a great deal of help – now and over time – to make their dreams come true. At Office Angels, we’ve been supporting the dreams of America’s self-employed business owners and budding entrepreneurs for more than two decades – just by listening. We heard established business owners and start-up entrepreneurs say they needed administrative, marketing and financial assistance when they needed it but not on a full-time basis. We also heard the “corporate dropouts” who said they wanted to replace the demands of more-than-40-hours-a-week with a balanced work life that included time to care for young children and elderly parents. When we distilled what we heard, we saw that both sides wanted the freedom that comes with architecting how they work, who they work with and what they work on. With autonomy and control over your work, business owners, entrepreneurs and expert assistants all get what they want. All of us at Office Angels were working “as needed” long before it was fashionable. It’s gratifying to see more Americans discovering for themselves what we’ve known all along – flexibility and control over one’s work life leads to higher satisfaction and fulfillment. Apologies to the Rolling Stones for calling them out but, in this case, they are just wrong – flexibility can get you want you want and what you need. Which of your “must do” tasks would you like to offload? Call me at 770-442-9246 and I’ll scour the heavens to find just the right Angel for you. For more information, visit www.officeangels.us  

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Depending on who you are talking to, Private Equity is either the Great Satan or the savior of small and mid-market companies in the United States. The stories depend a lot on the personal experience of the speakers. Once a vehicle for high-risk investment plays in corporate takeovers (see Bryan Burrough’s Barbarians at the Gate,) Private Equity has morphed into tranches where specialists seek opportunities in everything from a Main Street entrepreneurship to multi-billion-dollar entities. What is Private Equity? The term itself is relatively generic. According to Pitchbook, there are currently 17,000 Private Equity Groups (or PEGs) operating in the US. The accepted business model for our purposes is a limited partnership that raises money to invest in closely held companies. The purpose is plain. Well-run private businesses typically produce a better return on investment than publicly traded entities. The current Price to Earnings (or PE – just to be a little more confusing) ratio of the S&P 500 is about 27.5. This is after a long bull market has raised stock prices considerably. The ratio is up 11.5% in the last year. That means the average stock currently returns 3.6% profit on its price. Of course, the profits are not usually distributed to the shareholders in their entirety. Compare that to the 18% to 25% return many PEGs promise their investors. It’s easy to see why they are a favorite of high net worth individuals, hedge funds and family offices. As the Private Equity industry has matured and diversified, they have even drawn investment from the usually more conservative government and union pension funds. Private Equity Types Among those 17,000 PEGs the types range from those who have billions in “dry powder” (investable capital,) to some who claim to know of investors who would probably put money into a good deal if asked. Of course, which type of PEG you are dealing with is important information for an owner considering an offer. private equity moneyThe “typical” PEG as most people know it has a fund for acquisitions. It may be their first, or it may be the latest of many funds they’ve raised. This fund invests in privately held businesses. Traditionally PEGs in the middle market space would only consider companies with a free cash flow of $1,000,000 or greater. That left a plethora of smaller businesses out of the game. For a dozen years I’ve been writing about the pending flood of exiting Boomers faced with a lack of willing and able buyers. I should have known better. Business abhors a vacuum. Searchfunders Faced with an overabundance of sellers and a dearth of capable buyers, Private Equity spawned a new model to take advantage of the market, the Searchfunders. These are typically younger individuals, many of whom graduated from one of the “EBA” (Entrepreneurship By Acquisition) programs now offered by almost two dozen business schools. These programs teach would-be entrepreneurs how to seek out capital, structure deals, and conduct due diligence. Some Searchfunders are “funded”, meaning they have investors putting up a stipend for their expenses. Others are “self-funded.” They find a deal, and then negotiate with investment funds to back them financially. Both PEGs and Searchfunders seek “platform” companies, those that have experienced management or sufficiently strong operational systems to absorb “add-on” or “tuck-in” acquisitions. The costs of a transaction have bumped many seasoned PEGs into $2,000,000 and up as a cash flow requirement. Searchfunders have happily moved into the $500,000 to $2,000,000 market. In the next article we’ll discuss how PEGs can promise returns that are far beyond the profitability of the businesses they buy.

Early last month, the Occupational Safety and Health Administration (OSHA) proposed the Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings rule. The aim is to curb heat related injuries or death which OSHA identifies as “the leading cause of death among all hazardous weather conditions in the United States.” The proposal places new responsibilities on employers: establishing heat thresholds, developing Heat Injury and Illness Prevention Plans, regularly monitoring temperatures, and establishing safety measures when heat thresholds are met. This rule is yet to be finalized however, it is a sign of what’s to come. The standard applies to all employers except for the following: Work activities for which there is no reasonable expectation of exposure at or above the initial heat trigger. Short duration employee exposures at or above the initial heat trigger of 15 minutes or less in any 60-minute period. Organizations whose primary function is the performance of firefighting and other certain emergency services. Work activities performed in indoor work areas or vehicles where air conditioning consistently keeps the ambient temperature below 80°F. Telework (work from home). Sedentary work activities at indoor work areas that only involve some combination of the following: sitting, occasional standing and walking for brief periods of time, and occasional lifting of objects weighing less than 10 pounds. Heat Thresholds There are two heat thresholds which will trigger employer action: An “initial heat trigger” means a heat index of 80°F or a wet bulb globe temperature (defined below) equal to the National Institute for Occupational Safety and Health (NIOSH) Recommended Alert Limit; and A “high heat trigger” means a heat index of 90°F or a wet bulb globe temperature equal to the NIOSH Recommended Exposure Limit. The “heat index” is calculated by measuring the ambient temperature and humidity. Wet bulb globe temperature is a heat metric that considers ambient temperature, humidity, radiant heat from sunlight or artificial heat sources and air movement. Employers may choose either method of measuring the temperature.   Heat Injury and Illness Prevention Plan (HIIPP) Requirements If an employer does not fall under the exceptions, it must develop a HIIPP with the input of non-managerial employees and their representatives for occasions when the heat threshold is surpassed. This plan may vary on the worksite but must be written if the employer has more than 10 employees and use a language employees will understand. The HIIPP must contain: A comprehensive list of the type of work activities covered by the HIIPP Policies and procedures needed to remain compliant with the standard. Identification of which heat metric the employer will use heat index or wet bulb globe temperature. A plan for when the heat threshold is met. Along with creating the HIIPP, employers must designate one or more “heat safety coordinators” responsible for implementing and monitoring the HIIPP. The HIIPP must be reviewed at least annually or whenever a heat related injury or illness results in death, days off work, medical treatment exceeding first aid, or loss of consciousness. Employers must seek input from non-managerial employees and their representatives during any reviews or updates. The definition of “representative” is not defined; if this is broadly defined, this could be a major complexity employers must face. Identifying Heat Hazards Employers must monitor heat conditions at outdoor work areas by: Monitoring temperatures at a sufficient frequency; and Track heat index forecasts or Measure the heat index or wet bulb globe temperature at or as close as possible to the work areas. For indoor work areas, employers must: Identify work areas where there is an expectation that employees will be exposed to heat at or above the initial heat trigger; and Create a monitoring plan covering each identified work area and include this work area in the HIIPP. Employers must evaluate affected work areas and update their monitoring plan whenever there is a change in production processes or a substantial increase to the outdoor temperature. The heat metric employers choose will affect the thresholds. If no heat metric is specified, the heat metric will be the heat index value.  Employers are exempt from monitoring if they assume the temperature is at or above both the initial and high heat trigger, in which case they must follow the controls below. Control Measures When Heat Triggers are Met When the initial heat trigger is met, employers must: Provide cool accessible drinking water of sufficient quantity (1 quart per employee per hour). Provide break areas at outdoor worksites with natural shade, artificial shade, or air conditioning (if in an enclosed space). Provide break areas at indoor worksites with air conditioning or increased air movement, and if necessary de-humidification. For indoor work areas, provide air conditioning or have increased air movement, and if necessary de-humidification. In cases of radiant heat sources, other measures must be taken (e.g., shielding/barriers and isolating heat sources). Provide employees a minimum 15-minute paid rest break in break areas at least every two hours (a paid or unpaid meal break may count as a rest break). Allow and encourage employees to take paid rest breaks to prevent overheating. At ambient temperatures above 102° F, evaluate humidity to determine if fan use is harmful. Provide acclimatization plans for new employees or employees who have been away for more than 2 weeks. Maintain effective two-way communication between management and employees. Implement a system to observe signs and symptoms of heat related problems (e.g., a Buddy system). When the high heat trigger is met, employers are additionally required to: Provide employees with hazard notifications prior to the work shift or upon determining the high heat trigger is met which includes: the importance of drinking water, employees right to take rest breaks, how to seek help in a heat emergency, and the location of break areas and water. Place warning signs at indoor work areas with ambient temperatures exceeding 102° F. Other Requirements Training: all employees and supervisors expected to perform work above the heat thresholds must be trained before starting such work and annually.   What’s Next? The rule is yet to be published in the Federal Register. Once this happens, there will be a 120-day comment period when all members of the public may offer OSHA their opinion about the rule. Whether this rule comes to fruition may also depend on which party wins the White House. Furthermore, if finalized this rule would likely be challenged in the courts, which now have more discretion to overrule agency rules following the US Supreme court case of Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce (overturning the Chevron deference decision). Employers should review their heat illness prevention policies to maintain compliance with regulations. If you have questions, call competent labor and employment counsel. 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  

Today we are highlighting the FIREPOWER Owner Sweet Spot Sessions! We’re about to embark on a game-changing conversation that will revolutionize the way you approach your business. It’s time to shift gears and start envisioning the future of your company in a new personal role. The Small Business Universe: Common Concerns of Owners Similar concerns echo throughout the small business universe. Maybe you feel like you’re lacking the right leadership, or worse, you don’t have any leadership at all. Perhaps your workforce has hit a plateau, or you’re dealing with the frustrating challenge of high turnover. And let’s not even get started on the never-ending cycle of decision-making, where it feels like you’re carrying the entire load on your own. What is the Work that Only You Can Do? We’re here to share a secret to successfully moving your business into the future. It all starts with a simple question: What is the work that only you can do? It’s time to tap into your natural talents and abilities that have fueled your business success from its inception and then refocus your efforts in a new way. Now, brace yourself for a little revelation that’ll bring a smile to your face. The answer to that question is much less than what you’re currently doing. Yes, you heard it right. You’re probably sporting way too many hats, it’s time to bid farewell to those unnecessary responsibilities and rediscover your true sweet spot. Enter the FIREPOWER Owner Sweet Spot sessions. These sessions are crafted to help you pinpoint those burdensome responsibilities that are holding you back from doing the work your company desperately needs from you. We’re here to lift that heavy weight off your shoulders and set you free to focus on what truly matters in achieving your future goals. Deciphering the best use of your time is the key to solving both short-term challenges and long-term business goals. It allows you to stay fully engaged in the work that only you should do, helps your teams to know your true superpowers, and ultimately unleashes your full potential to lead your company into the future. At FIREPOWER, we truly get the challenge, we live it every day. We understand the struggles you face as an owner.  Juggling numerous roles and tasks can be incredibly overwhelming and downright draining. But here’s some fantastic news – it doesn’t have to be that way. By identifying your unique strengths, you can reclaim your valuable time, restore your energy reserves, and reignite your enthusiasm for your business. So, are you ready to unlock your Owner Sweet Spot? Then it’s time to bid farewell to all the hats you’ve been wearing, delegate those unnecessary responsibilities, and rediscover the true value you bring to your company. Our owner-focused approach led by Maria Forbes, will expertly guide you through the process, empower your team, and take your business to unprecedented heights. Conclusion Remember, sustainable growth flourishes when you harness the potential of your team and become laser-focused on the work that only you can do. The number of hats you wear will shrink, while the quality of your life expands. It’s time to embrace the FIREPOWER within you and achieve the success you’ve always dreamed about. Together, we can make it happen! Fuel your people power, Maria Forbes with FIREPOWER Teams

In previous communications, we’ve discussed the significant changes brought about by the SECURE 2.0 Act. Effective implementation of many provisions within the act relies on guidance from the IRS and DOL. IRS Notice 2024-02 and IRS Notice 2024-55 offered clarification on several crucial aspects of SECURE 2.0. Guidance is helpful as plan sponsors make decisions regarding both required and optional provisions in the act. Here are some key provisions to consider: Automatic Enrollment Requirement  SECURE 2.0 mandates automatic enrollment features for 401(k) plans established after December 29, 2022, effective in 2025. The IRS guidance clarifies that a plan is deemed to be established when the employer adopts a 401(k) plan, regardless of the plan’s effective date. The notice also provides further clarity for plan mergers and spin-offs. Mergers: If a plan established after December 29, 2022, merges into a 401(k) plan that was established prior to that date, the ongoing plan will generally be subject to the automatic enrollment mandate unless the merger is: 1) a result of a business acquisition, and 2) the plans are merged by the last day of the plan year following the year of the transaction. Spinoff plans will be treated as a pre-December 29, 2022 plan as long as that portion of the plan had been established before that date. Higher Salary Deferral Catch-up Limits for Ages 60-63  For 2024, the salary deferral contribution limit is $23,000. If a 401(k) plan permits catch- up contributions, those age 50 and older can also make catch-up contributions up to $7,500. Those limits are expected to increase in 2025 based on cost-of-living adjustments to be announced later this year. Beginning in 2025, plans may also take advantage of a provision in SECURE 2.0 that would permit participants age 60-63 to make higher catch-up contributions. For those plan participants, employers may increase the catch-up limit to the greater of: * $10,000 (which will be indexed for cost-of-living adjustments in later years) or * 150% of the regular age 50 catch up deferral limit. De Minimis Financial Incentives  Employers can now provide “de minimis” financial incentives to encourage employee retirement plan contributions. These incentives must not exceed $250 and are available only to employees who have not previously elected to defer contributions. The incentive can be provided incrementally over time, contingent on the employee’s continued participation. Employees receiving these incentives are subject to regular tax, withholding, and reporting requirements. Terminal Illness Distributions  SECURE 2.0 introduced a new exception to the 10% penalty on early distributions for terminally ill employees. The IRS notice defines a terminally ill individual as someone who has been certified by a physician to have a condition or illness that can be reasonably expected to result in death in the next 84 months. This exception does not create a new type of distribution; rather, employees must still qualify for another permissible distribution from the plan. While this provision will be optional for employers, if a plan opts out, employees may categorize a distribution as a terminal illness distribution on their own tax return. If an employer does elect to recognize terminally ill distributions, the plan must obtain a specific certification from the physician rather than relying on an employee’s self-certification. Hardship Distributions with Self- Certification Most plans that permit hardship withdrawals allow such withdrawals only if the hardship satisfies one of the “safe harbor” reasons. Such reasons include the purchase of a principal residence, amounts needed to prevent eviction or foreclosure on a personal residence, qualifying medical expenses, tuition, funeral and burial expenses, certain expenses to repair the employee’s principal residence, and expenses and losses related to a federally – declared disaster. SECURE 2.0 provides that a plan can adopt employee self-certification rules. That means a plan sponsor may rely on an employee’s written self-certification that the distribution is for one of the plan’s safe harbor hardship reasons and is not more than the amount required to satisfy the financial need and they do not have alternate means that are reasonably available to satisfy the hardship need. The participant is expected to maintain records that support the hardship. Many plan sponsors are adopting self-certification.  Emergency Personal Expenses Distributions SECURE 2.0 permits a 401(k) or other defined contribution plan to offer emergency personal expense distributions. If the option is offered, eligible employees can withdraw up to $1,000, or their vested balance (if less) for “unforeseeable” or “immediate” personal emergency expenses once each calendar year. Self-certification is available. The distribution is not subject to the usual 10% tax on early distributions. Also, emergency expense distributions can be repaid to the account within a three-year window. Another emergency expense distribution can’t be made within the three-year window unless the previous distribution is fully repaid or contributions equaling the distributed amount are deposited.  Domestic Abuse Victim Distributions SECURE 2.0 permits a plan to offer domestic abuse victim distributions. This type of distribution may be made to a participant within a one-year period beginning on the date when a participant becomes a victim of domestic abuse by a spouse or partner. The maximum distribution is the lesser of $10,000 or 50% of the participant’s vested account. The $10,000 limit is subject to future cost of living adjustments. Self-certification is available. The distribution is not treated as an eligible rollover distribution for tax withholding purposes; however, the participant may repay the distribution any time during the next three-year period. The distribution is taxable, but there is an exception from the 10% early withdrawal penalty. (Note that plans which are subject to the spousal consent requirements for distributions may not be able to adopt this provision.) The IRS has also delayed the deadline for SECURE 2.0, SECURE, and CARES amendments until December 31, 2026. This gives them additional time to issue further clarifying guidance. As always, we are committed to keeping you informed as things develop.

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