Quote of the Day

  • "The best way out is always through." Robert Frost

Monday, February 5, 2007

U.S. Senate Votes to Increase Minimum Wage

On February 1, 2007, the U.S. Senate voted overwhelmingly (94-3) to raise the minimum wage to $7.25 an hour over two years, but packaged the increase with small business tax cuts, limits on corporate pay and a ban on awarding federal contracts to companies that hire illegal immigrants.

The legislation would raise the minimum wage in three steps: to $5.85 an hour upon taking effect 60 days after the president signs it into law; to $6.55 an hour a year later; and to $7.25 an hour a year after that.

Besides increasing the minimum wage, the bill would extend for five years a tax credit for businesses that hire the disadvantaged and provide expensing and depreciation advantages to small firms. The tax breaks would be paid for by closing loopholes on offshore tax shelters, capping deferred compensation payments to corporate executives and removing the deductibility of punitive damage payments and fines. Senators also adopted an amendment that would bar companies that hire illegal immigrants from obtaining federal contracts.

The bill must now be reconciled with the U.S. House version passed on January 10, 2007 that contained no tax provisions. House Democrats have insisted on a minimum wage bill with no strings attached, but President Bush has encouraged House Democrats to accept the Senate version of the bill.

N. DeWayne Pope, DeWayne Pope LLC


Job Discrimination Filings Rise in 2006

The Washington Post Online ran a story this week on the increase for the first time in four years in federal job discrimination complaints filed by workers against private employers.

Some noteworthy statistics:

* Discrimination charges filed with the Equal Employment Opportunity Commission increased to 75,768 during the 2006 budget year from 75,428 the previous year.

* Allegations of race discrimination, with 27,238 charges, accounted for 35.9% of all filings last year.

* Sex discrimination accounted for 23,247 complaints, or 30.7% of all filings last year.

* Charges based on retaliation rose to 22,555, or 29.8% of all complaints.

* Discrimination complaints based on disability rose to 15,625, or 20.6% of all filings.

* Age discrimination came to 13,569 or 17.9% of all complaints filed in 2006.

* National origin complaints came to 8,327, or 11% of the total.

* Religious discrimination complaints totaled 2,541, or 3.4% of all filings.

* Equal pay complaints were 663, or 0.9% of all filings.

Link to Washington Post article

N. DeWayne Pope, DeWayne Pope LLC


Sunday, February 4, 2007

Family Businesses and the Harbert Family Conflict

I do not know anything about the Harbert scandal other than what is reported in the papers. (See article linked to below.) But as I read the stories, I think myself and every corporate lawyer in the city gets a little nervous. Knowing the large-scale amounts of money involved, I have no doubt that the best lawyers assisted in the negotiation of this transaction. Yet even with all the legal firepower brought to the table, the transaction still ended in two factions of the family going to war with one another.

There are several points that I can take away from this ugly episode:

First, even the best laid plans and most well documented transaction can end in litigation.

Second, family situations always complicate matters. Family businesses are a tough nut to crack, and books have been written about how to manage a family business. This is a classic example of a transition from the first generation to the second generation, and given the financial success of Harbert currently it is somewhat unique in that the transition happened as well as it did. However, a conflict always exists between family members who were working in the business and family members who are out of the business. To what extent should the family member working in the business bring value to the family members who are out of the business. There is no easy answer to this question, and perhaps each situation is different.

Finally, always consider getting a lawyer. These documents that we ask you to sign do have consequences. I have had people sign documents in all sorts of situations, as apparently the documents were signed by the sister. Quite frankly as a transactional attorney when I get to the table while you are free to read the document, it is my hope and expectation that you have already familiarize yourself with the documents, had questions answered, and prepare to sign them. Otherwise, I'm going to be at the table for very long time, and this usually is not the best and most efficient use of my time. Often I perform a transaction “for the deal". I can do this (see rule below), but the ethical obligations make such representation difficult. A lot of times you need to do it, otherwise you are going to over burden what should be a simple deal. Nonetheless, I think people – particularly business people – bear some of the burden of realizing the competing loyalties in any transaction.

I expect the clients to know what they're signing. If they do not understand that I do expect that they will take up their disclaimer and get their own lawyer. If I'm working with a lawyer on the other side of the transaction, I have much more confidence that their representation in the transaction will help complete the deal in a much more professional manner and frankly much more enforceable as there is no discussion about whether the parties understood what they were signing. In short, I always encourage people (assuming that they are not going to charge my client) to get their own lawyer.

From a lawyer's perspective, I think we as a profession need to do a better job to get the knowledge of the representation down, understand this fundamental deal points in the transaction, and review the deal in an efficient manner which does not cause undue cost, but also adequately represent the interest of the client. I think that is the challenge for me, but also think it is a challenge that our profession (if we want to remain relevant in the business world) needs to address.

Mike Goodrich, Goodrich Law Firm, LLC

"Harbert Heiress Sues Brother Over Family Cash," Birmingnam Business Journal (12/22/06)


Review of Restrictive Covenants of Employers' Employees

Not long ago I posted a blog about a recent Alabama Supreme Court case concerning restrictive covenants. Since that time, I've come across two articles that reflect the dynamic and conflict between employers concerned and employees concern. First in the employee context is an article in the New York Times (see below) that details how the employee in has to handle being asked to sign a non-compete clause and shows how little bargaining power employee has.

But on the other hand is a recent lawsuit by the University of Alabama Birmingham against a former professor who allegedly stole a certain goal of property rights developed at wall being a professor at the University. If the allegations are true, then this professor took an asset that is now valued at $24.3 million and used it for her own personal gain.


The Noncompete Clause: Balk at Your Own Risk, New York Times Online (1/21/07)

"Ex-professor's Company Sued," The Birmingham News (1/21/07)

Mike Goodrich, Goodrich Law Firm, LLC


Friday, February 2, 2007

Tech Tip: Jott Yourself a Reminder

Have you ever wished that there was an easy way to send yourself a note or a reminder while out of the office or away from home? Now you can. Just pick up your cell phone and dial Jott. The service not only forwards recorded messages to you via e-mail, it also transcribes them into text. Best of all, it's free!

In my initial tests, Jott did an impressive job turning my messages into text. If you are like a friend of mine that often leaves herself reminders using voice mail, Jott is a high-tech alternative that's worth a try.

Link to Jott.

N. DeWayne Pope, DeWayne Pope LLC


Thursday, January 25, 2007

SBA Provides Free Small Business Podcasts

The U.S. Small Business Administration is offering a series of podcasts free on its website. Podcast feeds deliver audio broadcasts to your desktop. You can also listen to these files on your computer or download them to your MP3 player. Current topics include: Check List for Starting a Business, SBA Programs Support Entrepreneurial Veterans, Is Entrepreneurship for You?, The SBA Small Business Training Network—Log On!, Selecting a Business That Fits, Disaster Preparedness for Business Owners, Financing a Small Business, Creating a Business Plan, and Making Your Business Plan Work for You. If you would rather read than listen, the site also offers Word-formatted transcripts of the podcasts. The SBA will be adding additional feeds every month on small business topics.

N. DeWayne Pope, DeWayne Pope LLC


Tuesday, January 16, 2007

U.S. House of Representatives Passes Minimum Wage Bill

Democrats checked off the second item on their "First 100 Hours" agenda on Wednesday, January 10, 2007, when the U.S. House of Representatives approved increasing the minimum wage from $5.15 to $7.25 during the next two years. House members voted 315 to 116 to raise the federal wage floor.

Momentum for increasing the minimum wage, however, is likely to slow in the Senate, where Democrats cling to a 51-49 majority. Under Senate rules, it takes 60 votes to end debate and move to final passage of legislation.

Senate Republicans have indicated that they want to add a package of small-business tax breaks and regulatory relief to the minimum wage bill. President Bush has called for similar conditions. House Democrats and their labor allies decry any amendments, and are advocating for a "clean" minimum wage bill.

N. DeWayne Pope, DeWayne Pope LLC


Thursday, December 28, 2006

Do You Have a Corporate Blogging Policy?

The beginning of a new year is always a great time to revisit your company's personnel policies. With the rise of technology in our personal and business lives, one often overlooked policy relates to "blogging." What do you allow or prohibit with regard to your company and employees on the use of blogging as a communication tool?

According to a report conducted by the Pew Internet & American Life Project, The State of Blogging (January 2005),seven percent (7%) of the 120 million adults in the United States who use the Internet say they have created a blog or web-based diary. This represents more than 8 million people. Twenty-seven percent (27%) of Internet users said they read blogs, a 58% increase from a study conducted in February 2004. This means that by the end of 2004, more than 32 million Americans were blog readers.

While blogs can foster interoffice communication and are a highly effective, inexpensive means of mass direct marketing, the potential for abuse by employees is enormous. Any employee with a computer, or e-mail or web-enabled device, can be easily distracted from work posting personal opinions or reading blogs during company time. As a result, job productivity and performance can suffer. The potential for trouble, however, significantly increases when the employee, either on or off the clock, begins posting content on the Internet.

Bloggers can post comments, tape recordings, video clips or documents by sending a message to their website from a desktop computer, wireless device or any other device that sends e-mail. Some blog hosting services even provide a service where an individual can call from a phone and leave a message that is immediately posted to his or her blog as an MP3 audio file.

Unlike traditional print media, blogs are devoid of any form of external checks or balances. Angry and disgruntled employees, who want to say something about their employers, even if often factually inaccurate, now have an audience of potentially millions of readers. They may post comments that disparage your company, defame your company’s image, harass other employees, or leak your company’s trade secrets and other sensitive information. Because blogs have the potential to reach a worldwide audience in an instant, an employee blogger’s antics could have an immediate and disastrous impact.

While employers have substantial latitude when disciplining employee-bloggers, an employer should take care before an employee-blogger is “dooced” (to lose one’s job because of one’s website) . In certain circumstances, a blog that is critical of an employer might constitute legally protected whistleblowing. Some of the National Labor Relations Act’s (NLRA) provisions apply to employers who are not unionized or facing a union campaign. The NLRA, for example, prohibits all employers from restricting discussion among employees concerning the terms and conditions of their employment. Thus, if an employee wished to blog about her terms and conditions of employment, and restricted access to her website to only current fellow employees, her comments arguably would be protected by the NLRA and similar state laws, and adverse action based on the blog’s content might be unlawful.

Blogging by state or federal employees may be protected by the First Amendment. Even where no specific statute is implicated, a successful Tameny-type claim (a wrongful discharge action based upon the employee’s alleged exercise of certain fundamental and substantial statutory rights and privileges) might still be made based solely upon the constitutional right to free speech.

Companies should develop a workplace blogging policy in order to make clear the boundaries of expectations and limitations to employees. The following are some points to consider in developing a policy:

You’re personally responsible. All policies should stress that bloggers are personally responsible for their posts.
Disclaimer. The employee should make clear on his or her blog that the views expressed are his or hers alone and not that of the company.
Abide by existing policies and rules. A blogging policy should refer to present corporate policies and form a basis for the blogging rules.
Keep secrets. Prohibit employees from disclosing confidential or proprietary information of the company, or of any third-party that has disclosed such information. Refer employees to the company’s policy on what constitutes confidential information.
Be nice. Require bloggers to be respectful to the company, co-workers, customers, partners and competitors.
Follow the law. Require bloggers to respect and abide by copyrights and follow laws that regulate what can be written. This includes not only defamatory, libelous, harassing and abusive statements, but also statements about revenue, future plans of the company or share price if you are a public company.
You can [or cannot] write on company time. Make clear whether the employee can or cannot blog during work time, and limit blogging that interferes with work commitments.
Cite and link. Require employees to obtain permission from a designation company official if they want to provide a link from their sites to the company’s website.
Discuss with your manager. Bloggers should discuss with their managers if they in any way are uncertain about what they are going to write.
Stop blogging if we say so. Inform employees that the company may request that they temporarily confine their website or blog commentary to topics unrelated to the company if you believe that it’s advisable or necessary to comply with securities regulations or other laws.
Discipline. Caution employees that a breach of the blogging policy could result in discipline up to and including termination.
Designate company official. Designate a company official as the appropriate person to answer any questions employees may have about their person website or blogs in relation to the company blogging policy.

The Yourdon Report has compiled a list of sample blogging policies available on the internet. (Thanks to Human Law for the link.) Also, the Corporate Blogging Blog (now only an archive of posts) has compiled a similar list and generated further discussion on this issue from which some of the points in this post are taken.

N. DeWayne Pope, DeWayne Pope LLC


Tuesday, December 26, 2006

No Hire Provisions Upheld by Alabama Supreme Court

On December 15th, the Alabama Supreme Court in Ex Parte Howell Engineering and Surveying, Inc. upheld the enforceability of “no hire” clauses regardless of whether the employee involved in the situation has a non competition agreement. The no hire provision involved is a fairly typical no hire provision:

Contractor and Crown mutually agree not to solicit nor hire individuals actively employed by the other party’s respective organization during and for a period of one (1) year following termination of this Agreement, without the prior written consent if the other party, which consent will not be unreasonably withheld.

Previously, certain cases suggested that an underlying non compete agreement for the employee in question was required. However, the court in this case found the provision enforceable, regardless of such underlying agreement.

I have seen a number of instances where such a clause is effective and useful. Consulting companies often provide significant value to clients in locating and staffing projects. Without ‘no hire’ provisions in their contracts, a huge incentive arises to circumvent the original placement company in this context, and such acts are detrimental to the business.

However, I have concerns about this decision and the Alabama case law, which increasingly favors these restraints on alienation. First, the employee in this case is not a party to this contract. As the case law now stands, companies can make agreements concerning the livelihood of persons who have no say in the matter. From an employee’s perspective, your ability to move to another company is being restricted – without your consent. (See this article about this perspective and the antitrust concerns.)

Certainly in some situations the employee receives adequate consideration . All to often, however, the employer has a disproportionate bargaining position and often receives little to no consideration. (See this article)

Can continued employment really equate to adequate consideration? Often, employers give “test of loyalty”: requiring employees to sign non competes while at the same time continuing the employees to be ‘at will’.

My personal thought is that the pendulum has swung too far towards enforceability. Two thoughts: First, require real consideration- something more than just the right to continue to work here.

Second, require lawyers to live to the same standard. Currently, lawyers can not be restrained by non competes because these agreements restrict client choice. However, don’t all these agreements in some way limit the options of customers or clients? Why should lawyers get a free pass? Make these agreements applicable to all professions. I would surmise that is lawyers had to live with the same agreements they draft for their clients, more lawyers could persuade their clients against overbroad and unfettered use of these agreements. (See article about a recent New York case involving a non competition agreement.)

Mike Goodrich, Goodrich Law Firm, LLC


Wednesday, December 20, 2006

Raising the Floor on Pay

The New York Times published a great article today in its online version on the history and current status of the minimum wage. The article states that the Democrats plan to introduce a bill in Congress next month that would increase the federal minimum for the first time in a decade — to $7.25 an hour in the spring of 2009, reaching that level in three steps from the present $5.15 an hour.

One notable fact that the article discusses is that the States have taken the lead in raising the minimum wage everywhere but in the South. Twenty-nine states have jumped ahead of the federal government and now have minimums that range from $6.15 to $7.63 an hour, lifting 70 percent of the nation’s work force well above the federal level of $5.15.

Link to New York Times article

N. DeWayne Pope, DeWayne Pope LLC


Monday, December 18, 2006

U.S. Department of Labor Opinion Finds IT Support Specialist Not Exempt from FLSA's Requirements

The U.S. Department of Labor has issued an opinion letter (FLSA 2006-42, dated October 26, 2006) addressing the issue of whether an employee who provides computer help desk support is exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). In the opinion letter, the DOL stated that, based upon the information provided by the employer requesting the opinion, the position does not qualify for the administrative or computer employee exemption.

In this case, the employer requested guidance regarding whether the position of "IT Support Specialist" would be exempt under either the administrative or computer employee exemption. According to the employer's description of the position, the IT Support Specialist (formerly called "Help Desk Support Specialist" by the employer) is responsible for diagnosis of computer-related problems as requested by employees and contractors of the employer. The position conducts problem analysis and research, troubleshoots and resolves complex problems. The job requires a high school diploma or GED, although an associate degree is preferred.

Administrative Employee Exemption: An employee meets the administrative exemption if he/she is compensated on a salary or fee basis of at least $455 per week, and has as his/her primary duty, the performance of either office or non-manual work directly related to the management or general business operations of the employer. Also, the employee's primary duty must include the exercise of discretion and independent judgment with regard to matters of significance. In this case, the DOL found that the IT Support Specialist's duties of maintaining a computer system and testing to see that a particular piece of equipment or application is working properly according to specifications designed by others lacks the required exercise of independent judgment and discretion to qualify for the administrative employee exemption.

Computer Employee Exemption: Under the FLSA, computer systems analysts, computer programmers, software engineers, and other similarly skilled workers in the computer field who meet certain tests regarding their job duties are eligible for the computer employee exemption. To qualify for the exemption, the employee must be paid on either a salary or fee basis of not less than $455 per week, or if paid on an hourly basis, not less than $27.63 per hour. Additionally, this exemption only applies to employees whose primary duties consist of the application of systems analysis techniques and procedures, including consulting with users to determine hardware, software or system functional specifications; the design, development, documentation, analysis, creation, testing or modification of computer systems or programs based on and related to user or system design specifications; the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or a combination of these duties. Examples of employees who qualify for these duties include computer systems analysts, computer programmers, software engineers, and other similarly skilled workers. However, job title alone does not determine the employee's exempt status.

In this case, the DOL found that the IT Support Specialist position did not qualify for the computer employee exemption because the job's primary duties of installing, configuring, testing, and troubleshooting computer applications, networks and hardware did not involve the application of systems analysis techniques and procedures to determine hardware, software or system functional specifications. The DOL also found that the position did not involve the design, development, documentation, analysis, creation, testing or modification of computer systems or programs related to user or system design specifications. Accordingly, the position did not qualify for the computer employee exemption.

Although DOL opinion letters are not binding and are based upon the specific facts presented, the guidance provided is useful because it demonstrates the factors the DOL considers in determining whether jobs involving computer-related duties will be considered exempt.

Link to DOL Fact Sheet #17C: Exemption for Administrative Employees Under the FLSA

Link to DOL Fact Sheet #17E: Exemption for Employees in Computer-Related Occupations Under the FLSA

N. DeWayne Pope, DeWayne Pope LLC


Sunday, December 17, 2006

Tech Tip: Using RSS to Automate Web Surfing of Your Favorite Sites

There is a link on the right side of this blog page that reads "Site Feed". If you have not already used this link to subscribe to the Birmingham Business Law Blog in your favorite news reader, you really should.

Why? What is RSS? What's a "news reader"? RSS is powerful software tool typically called a "news reader" (there are many available for download on the web for FREE) that allows you to keep up with the content on dozens of blogs and websites in less time that it would normally take you to review one or two the old fashioned way.

Dennis Kennedy and Tom Mighell have put together an article on the use of RSS by lawyers, but it is a really great article for non-lawyers, too. Do yourself a favor and give it a read. Start using RSS and you'll never surf the web the same way again!

Link to Kennedy and Mighell article

N. DeWayne Pope, DeWayne Pope LLC


Wednesday, December 13, 2006

U.S. Department of Labor Seeks Input on Changes to FMLA

The U.S. Department of Labor announced on December 1, 2006, that it is seeking information and comments from the public on the Family and Medical Leave Act (FMLA) and its implementing regulations.

Instead of publishing proposed new rules for comment, the DOL is seeking comments on the following substantive areas:

Eligible Employee
Definition of "Serious Health Condition"
Definition of a "Day"
Substitution of Paid Leave
Attendance Policies
Different Types of FMLA Leave
Light Duty
Essential Functions
Waiver of Rights
Communication Between Employers and Their Employees
FMLA Leave Determinations / Medical Certifications
Employee Turnover and Retention
The DOL invites interested parties having knowledge of, or experience with, the FMLA to submit comments and welcomes any pertinent information that will provide a basis for ascertaining the effectiveness of the current regulations and the DOL’s administration of the Act. Public comments should be received by no later than 5:00 p.m. EST on February 2, 2007.

Link to U.S. DOL website seeking public comments on the FMLA.

N. DeWayne Pope, DeWayne Pope LLC


Tuesday, December 12, 2006

Holiday Parties and Spirits on the Rise

An article by the Society for Human Resource Management indicates that a survey of 110 leading U.S. businesses shows an increasing number of organizations are planning holiday parties this year and serving alcohol at those parties.

Ninety-four percent of those surveyed will have some type of year-end party, up from 87 percent in 2005, and more than half of those parties (58 percent) were slated to take place the week of Dec. 11. A nearly equal percentage were scheduled the weeks of Dec. 4 (17 percent) and Dec. 18 (15 percent). Five percent were planned for the week of Nov. 27 and 5 percent were planned for after the holidays.

Among the employers who will have some type of holiday celebration, 86% will serve alcohol, according to a Battalia Winston survey. In 2005, 75% served alcohol. Similarly, global outplacement firm Challenger, Gray & Christmas found that 60% of employers plan to provide alcohol in 2006, up from 54% in 2005.

If your company is planning on serving alcohol at a holiday party, SHRM offers the following tips:

• Serve foods that slow the absorption of alcohol, such as those high in protein or starch.

• Avoid greasy and salty foods, which tend to encourage more alcohol consumption.

• Review your insurance policies for alcohol-related exclusions.

• Offer non-alcoholic beverages.

• Provide employees a limited number of drink tickets.

• Do not use employees to tend bar or provide alcohol.

• Make sure that bartenders have been trained not to over-pour drinks and not to serve those who appear to be intoxicated.

• To limit harm and liability, make sure bartenders have been trained to handle rowdy guests.

• Hire an off-duty police officer or security specialist to work during and after the party.

• Do not serve alcoholic punch or other beverages that make it difficult to gauge how much alcohol one consumes.

• Designate someone, preferably a supervisor, to refrain from drinking to monitor the party with event staff to curtail excessive serving of alcohol.

• Provide enough food and entertainment so that drinking is not the party’s focus.

• Close the bar an hour or so before the party ends.

• Arrange for designated drivers, reduced cab fares or hotel room rates, or offer to pay cab or hotel expense if employees obviously are alcohol-impaired.

Link to article

N. DeWayne Pope, DeWayne Pope LLC


Monday, December 11, 2006

Welcome to Red Mountain Law's Birmingham Business Law Blog

Today is the launch of Red Mountain Law's Birmingham Business Law Blog. The blog is published by the member firms of Red Mountain Law -- Cunningham Law Firm, LLC; DeWayne Pope, LLC; Goodrich Law Firm, LLC; and Hahn Law Firm, PC. This blog is intended to provide tips and updates on issues affecting businesses and business people. Specifically, this blog will address corporate law, taxation, real estate, wills and estates and human resources. We hope that you find value in this blog and that your will visit often or subscribe to receive automatic notice of updates by entering your e-mail address in the "Subscribe to Blog" form in the sidebar. Should we be of assistance, please contact us at (205) 328-9445 or visit our website at www.redmountainlaw.com.