Last March, a federal judge ruled The Minority Business Development Agency (MBDA) was discriminating on the basis of race by only offering grants to minority-owned businesses. This ruling is one in a string of recent court decisions that have declared race-based preference systems illegal. As the crusade to gut affirmative action continues, challenges to employers’ DEI initiatives continue to rise. Activist groups, investors, state attorney generals, and employees are all attacking such programs on multiple fronts. As an employer, you must tread carefully. Background In Nuziard v. Minority Business Development Agency, the MBDA was sued by three white business owners (“Plaintiffs”) who sought grants. The Plaintiffs were deemed ineligible for the grants because they were not “socially or economically disadvantaged individual[s].” While this phrase seems race-neutral, the term “socially or economically disadvantaged individual” was defined to mean “an individual who has been subjected to racial or ethnic prejudice or cultural bias.” Certain racial groups were automatically included in the MBDA’s definition, including: (i) Blacks or African Americans; (ii) Hispanics or Latinos; (iii) American Indians or Alaska Natives; (iv) Asians; and (v) Native Hawaiians or other Pacific Islanders. Unlisted racial groups were presumptively ineligible. The judge focused on the presumption that the Plaintiffs were not disadvantaged merely because of their race. This presumption, the judge ruled, was race discrimination and, therefore, illegal. The judge barred the MBDA from continuing its racial classification system. The Ripple On its face, Nuziard has no legal impact on employers. But some players are pushing for affirmative action to be struck down everywhere — including in the workplace. The principal lawyer representing the Plaintiffs, Dan Lennington, said, “We hope this is a precedent to eliminate all [affirmative action] . . ..  Automatically labeling a group of people as disadvantaged is ridiculous.” And it seems Mr. Lennington may be on to something. Recently, Jonathan Bresser, a white, male, law student at DePaul University College of Law, filed a complaint against the Chicago Bears. Bresser applied to be the Chicago Bears’ “Legal Diversity Fellow”. Bresser was rejected from the program, which was only open to “people of color and/or female law students.” Bresser’s lawsuit is just an example of the many legal challenges by conservative groups to stop corporate diversity, equity, and inclusion initiatives following last year’s US Supreme Court decision curtailing the use of race as a factor in college admissions. Discrimination is Still Discrimination (but you may need to prove it) While affirmative action is on rocky footing, the law is clear about one thing: discrimination laws prohibit discriminating against “majority” identities, such as white males. In fact, reverse discrimination claims are on the rise. But that’s about all that is clear. Courts across the country are conflicted on how discrimination laws apply to “reverse discrimination” claims. In reverse discrimination claims, some courts apply heightened evidentiary burdens for plaintiffs from majority groups. In 1981, the United States Court of Appeals for the D.C. Circuit became the first court to adopt the “background circumstances” rule. This rule requires plaintiffs from majority groups to show background circumstances that substantiate that the defendant is “that unusual employer who discriminates against the majority.” In total, five Circuits have adopted the “background circumstances” rule. Two other circuits expressly rejected it. The remaining five never addressed the background circumstances rule and treat discrimination claims from majority groups the same as claims from plaintiffs in other groups. Weathering the Chaos As new cases on affirmative action and reverse discrimination muddy the waters, the risk of maintaining DEI programs has increased. Companies should internally assess their risk tolerance, assess their DEI programs, and develop a responsive strategy. Not all DEI programs are made equal. Your DEI program could be protecting your company or exposing it to substantial risk. You should work with skilled counsel to evaluate your situation.    

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.  

Whistleblowers can blow their whistles a little louder tonight. The Supreme Court’s recent ruling, Murray v. UBS Securities, LLC, decided that an employee may prove a whistleblower retaliation claim without showing that their employer acted with retaliatory intent. As a result, it is now easier for employees to succeed on whistleblower retaliation claims under the Sarbanes-Oxley Act and probably beyond.   The Case In Murray, an employee, Trevor Murray, had worked for UBS as a research strategist. His role required him to certify his reports to UBS customers were independently produced. UBS terminated Murray shortly after he informed his supervisor that two leaders of the UBS trading desk were changing his reports thus undoing the “independent” nature of the reports. Murray filed a whistleblower case against UBS. After extensive legal maneuvering, the case boiled down to a singular issue: do whistleblowers need to prove that their employer had retaliatory intent?   The Outcome The Supreme Court decided that adding an intent requirement to whistleblower claims was imprudent: whistleblower’s need only prove that their protected activity was a contributing factor in the retaliation. Moreover, the Court said, “[the law’s] text does not reference or include a ‘retaliatory intent’ requirement, and the [law’s] framework cannot be squared with such a requirement.” This is another example of the Court following a strict interpretation of a statute, which is often a common theme for this Supreme Court.   The Takeaway The Murray decision clarifies that employees seeking whistleblower protection under the Sarbanes-Oxley Act are not required to prove any specific intent behind their employer’s decision to retaliate against them for protected activity. Instead, a whistleblower only needs to demonstrate their protected activity contributed to their termination, after which the burden shifts to the employer to prove they would have terminated the employee even without considering the protected activity. The heightened burden on employers is likely to raise the cost of defending these claims and makes winning that much harder. Also, while the case addresses the Sarbanes-Oxley Act, it will likely spill over to many other whistleblower cases. As such, taking appropriate/legal action against whistleblowers will be that much harder. Using skilled counsel can help companies best avoid liability. 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 very fact specific. Our goal is to alert you to some of the new laws and trends 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 or practices discussed above.  If we can be of assistance, please contact us at info@brodyandassociates.com or 203.454.0560.  

Yesterday, Governor Kathy Hochul signed into law The Clean Slate Act (S.7551A/A.1029C) with an effective date of November 16, 2024. The law will seal certain criminal records following an individual’s release from incarceration: eligible misdemeanor convictions will be sealed three years after release, and eligible felony convictions will be sealed eight years after release – on the condition that the individual convicted of the offense has not committed an additional crime in the intervening period. The Clean Slate Act will not seal the records of individuals convicted of sex crimes, murder, or other non-drug Class A felonies.  Law enforcement, prosecutors, the New York State Education Department, the courts, and certain other groups will continue to have access to all criminal records under the law. New York became the 12th state in the nation to sign Clean Slate legislation, joining New Jersey, Michigan, Pennsylvania, and others. Statistics show that a criminal record makes finding new employment significantly more difficult. The Clean Slate Act is designed to provide a second chance to individuals who have paid their debt to society, enabling them to restart their lives and become positive contributors to their communities. Conviction information will remain available for law enforcement purposes, the hiring of police and peace officers, the hiring of teachers at public and private schools, and background checks for firearm purchases and/or licenses. A

BENEFICIAL OWNERSHIP INFORMATION REPORTING CORPORATE TRANSPARENCY ACT SUMMARY One of the unique and often attractive features of a Limited Liability Company can be anonymity.  In most states, formation and registration of an LLC does not require disclosure of the owners or officers.  For various reasons, legitimate and not so legitimate, the owners of a business may not want to broadcast their ownership.  Whether there are genuine concerns regarding privacy and nefarious desires to avoid civil and/or criminal liability, people have availed themselves of this feature.  As such, it can be difficult to identify assets to enforce judgements or confirm net worth in the civil context.  Additionally, it can be difficult to trace financial and criminal wrongdoing to the actual bad actors. The Federal Government has decided to make things a little easier for itself by creating the Financial Crimes-Enforcement Network or FinCEN.  Try saying that five times fast!  In summary, the U.S. Treasury Department will require the vast majority of LLCs along with C and S corporations to report specific information about the business.  This will include information identifying the ownership of the company.  This is not necessarily a new thing for the shareholders of S and C corporations, but this will be a big change for the members of LLCs.   THE RUNDOWN Authority               United States Department of the Treasury Corporate Transparency Act (31 USC 5336(b)) Financial Crimes Enforcement Network (FinCEN) Rule   Deadline                  January 1, 2024-January 1, 2025 for entities formed before January 1, 2024 Within 30 days of formation for  entities formed on or after January 1, 2024   Who Must Comply   Any entity that had to file a formation document with a state authority as part of its formation or registration as a foreign entity doing business in the United States.                    YES–Corporations (C, S, B[1] and P[2]), Limited Liability Companies, Limited Partnerships, Limited Liability Partnerships[3].                    NO—Sole Proprietors, General Partnerships. Exemptions                23 Categories of Exemptions and Exceptions to the rule, including inactive entities, nonprofits, entities that are already subject to federal reporting and regulations, financial institutions, and government entities. Corporate Information       Legal Name Trade Names or D/B/A Names Address Formation State TIN/EIN Ownership Information       Beneficial Owners. Owners with at least 25% ownership or who have substantial control the company directly or indirectly. Legal Name DOB Home Address Driver’s License, State ID, or Passport Number Picture of said ID   Duty to Update          Within 30 days of any change or need to correct information.   Failure to Comply     Civil liability $500/day Criminal penalty up to $10,000 and/or 2 years in jail   THE SOLUTION Resources              FinCEN

Attention New York employers: On November 17, 2023, Governor Hochul signed S4516 into law, amending Section 5-336 of the General Obligations Law (“GOL”), commonly known as New York’s #MeToo statute. The amendment significantly changes the terms permissible in settlement agreements for claims relating to discrimination, harassment, or retaliation. As of the effective date, November 17, any settlement agreements involving claims of discrimination, harassment or retaliation, cannot: Compel the complainant to forfeit consideration if they breach nondisclosure or nondisparagement clauses; Mandate the complainant to pay liquidated damages for violating nondisclosure or nondisparagement clauses; or Include or require an affirmative statement, assertion, or disclaimer stating the complainant was not subject to unlawful discrimination, including discriminatory harassment or retaliation. If these provisions are present in settlement agreements, the entire release becomes unenforceable. In other words, the employee can still sue you even after fully executing a release agreement (and receiving the money that typically follows)! Additional changes the amendment made include: Waiver of the 21-day consideration period: Previously, complainants had to wait 21 days before entering into a confidentiality agreement. Now, complainants can waive this consideration period, although the separate confidentiality preference agreement and 7-day revocation period still apply. Extension of protections to independent contractors: The recent amendment expands the #MeToo statute to cover independent contractors. Previously, the law only applied to agreements between employers and employees. In light of these changes, employers should ensure their settlement agreements for claims of harassment, discrimination, or retaliation do not include clauses related to liquidated damages, clawback provisions in case of a breach, or statements denying unlawful discrimination. Inclusion of such clauses will render the release of claims unenforceable, but the obligation to pay the settlement amount may persist. If you are executing a release and you are not sure if the underlying claims involve harassment, discrimination, or retaliation, seek skilled counsel for advice. Brody and Associates regularly defends employment litigation cases for management and advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in these areas, please contact us at info@brodyandassociates.com or 203.454.0560

Starting July 31, 2023, all employers with employees working in New Jersey are required to immediately and simultaneously report to the New Jersey Department of Labor (the “NJ DOL”) certain information relating to terminated employees.  Employers are to submit this information electronically at the same time they provide the terminated employee with his/her benefit instructions contained on

  In Rev. Proc. 2023-29, recently issued by the Internal Revenue Service, the affordability percentage for Affordable Care Act plans has been set at 8.39% beginning in 2024. This marks a significant decrease from the previous 9.12% applicable for 2023. This is the lowest percentage since the inception of the employer mandate which means these plans will cost employers more. Under the Affordable Care Act (ACA), large employers – those with fifty (50) or more full-time-equivalent employees- are required to provide affordable, minimum value group health plan coverage to their full-time employees. Affordability is gauged by the premium cost of the least expensive, minimum value plan available to employees relative to the employees pay. Every year, the affordability test is set at a percentage of employees’ earnings. In 2024, the new affordability test is 8.39%. Given that open enrollment for calendar year plans is imminent, applicable large employers should take prompt action to ensure their offerings for 2024 comply with the new affordability mandate.

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I once had the thrill of interviewing Jerry West on management. He was “The Logo” for the NBA, although back then they didn’t advertise him as such. Only the Laker followers knew for sure. In 1989 the “Showtime” Lakers were coming off back-to-back championships.  Pat Riley was a year away from his first of three Coach of the Year awards. 

Can you Offer Too Many SKUs to Your Customers? The short answer is YES! A SKU, or Stock Keeping Unit, defines each different product version that you sell and keep inventory of.  There may be different SKUs of the same overall item based on size, color, capacity (think computer or cellphone memory), features, and many other parameters.  For build to forecast businesses, that number of variations can quickly explode and become difficult to manage. Your customers are busy and want ordering simplified. Of course, they may need (or want) more than one variation of a product. That is reasonable and a common aspect of business – one size does not fit all! But there is a point where too offering too many SKUs is not value added either for your customer or your business.  In his April 30, 2013 article “Successful Retailers Learn That Fewer Choices Trigger More Sales” in Forbes, Carmine Gallo discusses his experience and a study about “choice overload” by other authors. He writes about a retailer that “has discovered that giving a customer more than three choices at one time actually overwhelms customers and makes them frustrated…when the customer is faced with too many choices at once, it leaves the customer confused and less likely to buy from any of the choices!” Choice overload is well-documented in consumer studies but can apply in B2B as well. While customer satisfaction is important, another key concern is the often-hidden costs associated with a business offering and managing a large number of SKUs for a given product type. These costs include holding inventory, S&OP (Sales and Operations Planning) team time, small production runs, and scrapping inventory. Holding inventory takes up space, which may come with a cost or utilize racks that could be used for other products. Scheduled inventory counts take up employee time and may result in blackout periods when the warehouse is not shipping product.  The more SKUs there are, including extra SKUS, the greater the potential impact. The Sales team’s forecasting and the Operations team’s purchasing reviews that are part of the S&OP process can occupy more of their valuable time if they need to consider these times. If small orders or forecasts require a new production run, this could be costly and create excess inventory. Whether from this new production or past builds, eventually it will make sense to write off and scrap old inventory, another cost impact to the company. How do you know which SKUs to focus on if you wish to look at reducing your total number of SKUs? Start by examining SKUs that have: Low historic sales over a period of time Small variations between SKUs that customers do not value Older technology or model when newer option SKUs are available This requires a true partnership between Sales and Operations. It starts with educating both teams on the costs involved – neither group may be aware of the money and time impact to the company. Periodic (such as quarterly) reviews of SKUs that meet the above descriptions should become a fixed part of the calendar. A review of the data and other available for sale options should result in the identification of SKUs which may not be needed. At that point, it is helpful to have a customer friendly EOL (End of Life) Notice process by which you inform customers of last time buy requirements for this SKU and alternates available. It is usually best to provide some time for the last time buy in the interest of customer satisfaction, although that may not always be necessary. At a company that designed and sold electronics, a robust SKU rationalization process was implemented to help address these issues. A representative from the Operations team analyzed SKUs that met a version of the above criteria and suggested candidates for the EOL process. Next, a member of the Sales team reviewed them and, where appropriate, issued product change or EOL notices to customers, providing them time for last time buy orders when needed. These steps helped reduce the work involved in maintaining these SKUs while not leading to any customer complaints. A final note – sometimes it makes sense to continue offering low selling SKUs – to support customers buying other items (hopefully in larger quantities). It may be worthwhile to encourage them to keep coming back to you for all of their product needs and this may be a way to accomplish that. But it helps to understand that this is truly the case and not assume that this customer would not be equally happy with another, more popular, SKU.   Steven Lustig is founder and CEO of Lustig Global Consulting and an experienced Supply Chain Executive.  He is a recognized thought leader in supply chain and risk mitigation, and serves on the Boards of Directors for Loh Medical and Atlanta Technology Angels.

When it comes to careers, business owners are a minority of the population. In conversations this week, I mentioned the statistics several times, and each owner I was discussing it with was surprised that they had so few peers. According to the Small Business Administration (SBA), there are over 33,000,000 businesses in the US. Let’s discount those with zero employees. Many are shell companies or real estate holding entities. Also, those with fewer than 5 employees, true “Mom and Pop” businesses, are hard to distinguish from a job. The North American Industry Classification System (NAICS) Association, lists businesses with 5 to 99 employees at about 3,300,000, and 123,000 have 100 to 500 employees (the SBA’s largest “small business” classification.) Overall, that means about 1% of the country are private employers. Owners are a small minority, a very small minority, of the population. Even if we only count working adults (161,000,000) business owners represent only a little more than 2% of that population. So What? Where am I going with this, and how does it relate to our recent discussions of purpose in business exit planning? It’s an important issue to consider when discussing an owner’s identity after transition. Whether or not individual owners know the statistics of their “rare species” status in society, they instinctively understand that they are different. They are identified with their owner status in every aspect of their business and personal life. At a social event, when asked “What do you do?” they will often respond “I own a business.” It’s an immediate differentiator from describing a job. “I am a carpenter.” or “I work in systems engineering,” describes a function. “I am a business owner” describes a life role. When asked for further information, the owner frequently replies in the Imperial first person plural. “We build multi-family housing,” is never mistaken for a personal role in the company. No one takes that answer to mean that the speaker swings a hammer all day. Owners are a Minority We process much of our information subconsciously. If a man enters a business gathering, for example, and the others in the room are 75% female, he will know instinctively, without consciously counting, that this business meeting or organization is different from others he attends. Similarly, business owners accept their minority status without thinking about it. They expect that the vast majority of the people they meet socially, who attend their church, or who have kids that play sports with theirs, work for someone else. There are places where owners congregate, but otherwise, they don’t expect to meet many other owners in the normal course of daily activity. This can be an issue after they exit the business. You see, telling people “I’m retired” has no distinction. Roughly 98% of the other people who say that never built an organization. They didn’t take the same risks. Others didn’t deal with the same broad variety of issues and challenges. Most didn’t have to personally live with the impact of every daily decision they made, or watch others suffer the consequences of their bad calls. That is why so many former owners suffer from a lack of identity after they leave. Subconsciously, they expect to stand out from the other 98%. “I’m retired” carries no such distinction.       This article was originally published by John F. Dini, CBEC, CExP, CEPA on

In a recent research study by The Value Builder System™, they analyzed data from 20,000 business owners who completed a Value Builder assessment of their business and discovered that owners who have businesses dependent on them, known as Hub & Spoke owners are facing a 35% discount on the value of their businesses and part of the problem may be the degree of customization they offer. For the purposes of the study, a Hub & Spoke owner is someone who answered the question “Which of the following best describes your personal relationship with your company’s customers?” with the response, “I know each of my customers by first name and they expect that I personally get involved when they buy from my company.”  One reason customers want the owner to personally attend to their project is the degree of customization Hub & Spoke owners offer.  In fact, the study shows that Hub & Spoke owners are more than twice as likely to say they offer a complete custom solution for each customer.  Since the owner is usually the person with the most subject matter expertise inside their company, it’s not surprising customers want the owner’s full attention on their job. The secret to making a business less reliant on its owner is to stop offering a custom solution for every customer.   How Ned MacPherson Built More Value By Doing Less   Ned MacPherson is a digital marketing guru, so it’s not surprising that when he first started offering his time, it was in demand.   In the early days as a consultant, he offered all sorts of growth hacking services. But when demand outstripped his supply of time, Ned had a decision to make. He could either turn away prospective clients or build a team of consultants underneath him.  As a growth guy, the idea of treading water didn’t appeal to Ned, so he opted to build a team. However, to ensure his team could execute without him, Ned decided to focus on one service offering: post-click analysis. Rather than help optimize a website for the entire customer journey, Ned’s company would become one of the world’s leading firms on optimizing a customer’s journey after they opted in to a website.   Most digital marketing consultants offer a wide range of services, but Ned knew it would be impossible to remove himself if they offered help in too many areas. By specializing in post-click analysis, Ned and his team were able to streamline their offering. Demand for Ned’s time started to diminish as his employees became some of the world’s leading experts in a narrow slice of the analytics market.   Within seven years of starting Endrock Growth & Analytics, Ned had 70 employees, more than $2 million a year in EBITDA, and multiple acquisition offers.   

The sale of a business marks a major life event. It’s emotional, stressful, and exciting all at the same time. And unfortunately, it’s often a lot of work. Most business owners will only experience the process of selling a business once in their life. This is both good and bad news. On the bright side, you only need to get through it once. But many business owners aren’t ready for the process and risk leaving money on the table as a result. With many sellers relying on the sale to fund their retirement and lifelong financial goals, getting it right from the start is critical. Here are tips from sell-side business advisors on what to do (and not do) when selling a business. What to do (and not do) when selling a business Start thinking about selling your business early — really early One of the top mistakes sellers make when selling their business is not starting the process early enough. There are many reasons starting last minute can really hurt your bottom line. It’s not uncommon for business owners to assume they’ll never retire at some point during their life. But as often happens, life changes. Perhaps health concerns for you or a spouse make continuing to run your business difficult. Or maybe you eventually lose the excitement when getting up every day and want a change of pace. Sudden sales or immediate retirements Unfortunately, when business owners want to sell with a tight timeline (or fire sale), they may have fewer options to exit. It’s not uncommon for some buyers to want the owner and/or members of the management team to stay on for a period to help with the transition. If there’s an earn-out, it’ll usually require the seller to stick with the company for different milestones (time, financial, or otherwise) to earn the full purchase price. Earn-outs aren’t ideal for sellers, but if you’re unwilling or unable to consider deals with any continuation component, it could impact the sale price, timeline to find a buyer, or both. Make your business more sellable later by getting advice now Business brokers often recommend getting a valuation done years before expecting to sell the company. Sarah Grossman, Principal of BayState Business Brokers in Needham, MA, says this helps sellers “shape their timeline and any financial planning that needs to be completed prior to a sale.” Understanding the fair market value of the company is critical to setting expectations for the seller, but understanding the drivers of the valuation can help increase the sale price over time. Grossman says, “a [business] broker can advise them on things they can do in their business over the next few years to make it more saleable when it does go on the market.” How to maximize your cash at closing Aaron Naisbitt, Managing Director at Dunn Rush & Co, an investment bank focused on sell-side M&A in Boston, MA, emphasizes the importance of going to market and knowing what your business is worth. He says, “the biggest mistake many businesses owners make is not running a competitive process when the business is capable of attracting interest from a broad number of buyers. This mistake most often occurs when the owner has already made the second biggest mistake – not taking the time to educate themselves and prepare adequately for the process.” Not every business will be able to run a competitive process. But those that can, and don’t, “Will leave money and terms on the table if they do not do so” he adds. Getting professional help is key here as trying to negotiate a sale directly with a buyer might be short-sighted. Grossman says it’s not uncommon for sellers to be approached directly by competitors. She cautions sellers considering working with buyers directly as “They could be leaving significant money on the table without a clear understanding of the valuation of their company. Sellers also need to work with a broker and their advisors to understand a typical deal structure so that they can maximize their cash at closing.” The importance of understanding the terms of the deal cannot be overstated. This is where money is made or lost. Naisbitt cautions that sometimes terms can sound really good, but aren’t always common sense. He adds that without an advisor, sellers “Don’t know where to argue.” During negotiations, you have to consider “What is it that’s important to you and what are you willing to give up” he says. Exit planning is not time to DIY — assemble your team of advisors When selling a company, gathering your team of advisors early on is key to getting a successful outcome. Again, odds are you haven’t sold a business before and probably won’t again. We don’t know what we don’t know…and you only have one shot to get this right. Your team of business and personal advisors will be instrumental in getting the deal over the finish line. Your business advisory team may consist of: a business broker or M&A advisor, accounting and tax advisors, and transaction/M&A attorney. On the personal side, your sudden wealth advisor who focuses on helping individuals experiencing a transformative liquidity event. Be sure to involve your wealth advisor in discussions around deal terms too. For example, when considering deal structure, it’s important to ensure alignment with your objectives or financial needs. What are your income needs after the sale or do you have plans for a big purchase? Your advisor can help determine how much cash you need at closing and whether to consider the pros and cons of arrangements like an installment sale. And at closing, a financial advisor can help you determine Section 1202, realizing the gain over time with an installment sale, asset versus stock purchase, or state tax implications such as the charitable goals, legacy objectives for heirs, or estate tax planning strategies. Brokers explain what sellers are most unprepared for during the process Selling a business is a lot of work. In addition to running the company in the usual course of business, sellers also need to comply with a host of due diligence requests from the buyer’s team and the lender financing the transaction. The magnitude of this process is by far the most 

In March 2022, Florida enacted the politically charged Individual Freedom Act, informally known as the STOP WOKE (Wrongs to Our Kids and Employees) Act. Less than two years later, the U.S. Court of Appeals of the Eleventh Circuit blocked the enforcement of the Act on the grounds it violates employers’ right to free speech. This decision directly impacts employers in the Eleventh Circuit and will have a ripple effect on employers nationally.   How did the Individual Freedom Act (Stop WOKE Act) affect employers? The Act attempted to prevent employers from mandating training or meetings for employees which “promote” a “certain set of beliefs” the state “found offensive” and discriminatory. There are eight prohibited beliefs each relating to race, color, sex, and national origin. According to the Act, employers must not teach the following: Members of one race, color, sex, or national origin are morally superior to members of another race, color, sex, or national origin. An individual, by virtue of his or her race, color, sex, or national origin, is inherently racist, sexist, or oppressive, whether consciously or unconsciously. An individual’s moral character or status as either privileged or oppressed is determined by his or her race, color, sex, or national origin. Members of one race, color, sex, or national origin cannot and should not attempt to treat others without respect due to race, color, sex, or national origin. An individual, based on his or her race, color, sex, or national origin, bears responsibility for, or should be discriminated against or receive adverse treatment because of, actions committed in the past by other members of the same race, color, sex, or national origin. An individual, based on his or her race, color, sex, or national origin, should be discriminated against or receive adverse treatment to achieve diversity, equity, or inclusion. An individual, by virtue of his or her race, color, sex, or national origin, bears personal responsibility for and must feel guilt, anguish, or other forms of psychological distress because of actions, in which the individual played no part, and were committed in the past by other members of the same race, color, sex, or national origin. Such virtues as merit, excellence, hard work, fairness, neutrality, objectivity, and racial colorblindness are racist or sexist, or were created by members of a particular race, color, sex, or national origin to oppress members of another race, color, sex, or national origin. Employers still had the ability to mandate employees attend sessions that either refute these concepts or present them in an “objective manner without endorsement.” This dictates how an employer deals with its employees and is particularly limiting in how employers address discrimination training. Employers who failed to adhere to the law were liable for “serious financial penalties—back pay, compensatory damages, and up to $100,000 in punitive damages, plus attorney’s fees—on top of injunctive relief.”   The Ruling – Honeyfund.com Inc. v. Governor [2024] In March 2024, the U.S. Court of Appeals of the Eleventh Circuit served an injunction preventing enforcement of the Act. Despite the state insisting the Act banned conduct rather than speech, the court ruled the Act unlawfully violated the First Amendment’s right of free speech by barring speech based on its content and penalizing certain viewpoints. While certain categories of speech such as “obscenity, fighting words, incitement, and the like” are traditionally unprotected, the court pointed out that “new categories of unprotected speech may not be added to the list by a legislature that concludes certain speech is too harmful to be tolerated.” Florida is keen to appeal against the decision.   What does this mean for employers? Regardless of one’s opinions on the matter, this can be viewed positively from an employer’s standpoint. Employers in the private sector can control speech in the workplace, and this ruling confirms their autonomy will continue. Whether or not the rest of the country will follow suit remains to be seen. This case, in tandem with the US Supreme Court’s ruling to ban race based affirmative action, signals today’s intense political climate is likely to continue to impact how employer diversity, equity and inclusion (DEI) initiatives are approached. Employers should continue to review their DEI initiatives, ensuring they are in line with the latest precedents. 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      

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