Monthly Archives: January 2014

Should My Business Have An Employee Handbook?

“Should my business have an employee handbook?”

This is a question that I often find a difference of opinion on among business attorneys.  Some don’t like them, because they feel that a handbook creates more problems than they prevent.  Others will automatically respond “Absolutely.”  I think the answer is a bit more nuanced.

When written after careful consideration, an employee handbook can be a tremendous tool.  A well-written handbook will address a number of issues such as sick leave, vacations, attendance policies, and break times.  A handbook can also be used to set expectations for employee conduct and dealings with the public and each other.  You can use a handbook to establish travel and reimbursement policies,  training and continuing education policies, and policies regarding use of company vehicles.   You can also include confidentiality, non-disclosure, and non-compete agreements in an employee handbook.  (You can include social media policies, but there are some complex issues and considerations that you need to be aware of in order to avoid conflicts with federal regulatory agencies.  The law is developing in this area, and you should discuss it with your attorney before deciding what to include and what to leave out.)

But it isn’t enough to have a carefully crafted handbook.  You also need to be consistent.

Be consistent in how you present it to employees.  Timing is important.  It is best to present the handbook and any agreements to an employee when they are hired.  If you present them later, then there are more steps you need to take to make the terms enforceable.

Be consistent in how you enforce policies.  Employee handbooks are great, because they let everyone know what the rules are.  But if you do not enforce those rules uniformly, then you are asking for a lawsuit, especially if you fire an employee for an offense that different employee was NOT fired for.

Be consistent in reviewing and revising policies.   An employee handbook is as only as good as the policies that are in it.  Things change in business, and if your handbook doesn’t keep up with your changed circumstances.  Establishing a policy of reviewing your handbook every year or every other year is a good idea.

A well written employee handbook can prevent a lot of problems and help your business to run efficiently.  But to get one requires a willingness to give careful consideration to what you put into it, and a willingness to keep it updated.  A good business attorney can help you to focus on the core items and write one that suits your business, your style, and your employees.

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Sometimes, The Popcorn Bites Back

When I was a new baby lawyer, I once went to get an order signed by the commissioner before he went back on the bench.  I stood in the doorway of the chambers, waiting for him to motion me back.  He looked up, and motioned me in.  He took my order, signed it, and handed it back to me.  He let out a long sigh, and asked “Did you see that?”  He was referring to the parties who were arguing right before he ruled, and took a recess.

“Yes.” I said.  I wasn’t about to offer an opinion.

“Sometimes, I feel like people are pelting me with popcorn.”

This exchange stuck with me over the years.

Today, I went to Court late in the afternoon with an Amended Order.  The Commissioner on the bench was the one officially assigned to that location, although in 8 years of practicing in that court, it was the first time I actually came before him.  I gave my Order to the Bailiff and sat down.  A woman was before the court, seeking a restraining order against her ex husband, who was represented by his attorney who was appearing on the phone.  After a few minutes, the Commissioner asked the attorney “Was your client served with the papers for today’s hearing?”

There was a long pause.  The attorney said “I have not been authorized by my client to accept service of process, your Honor.”  At this point, the ex-wife started in, talking about how she’s NEVER had an address for him, which has always created problems.  The Commissioner stopped her, and said “Well here is how we’re going to fix this, Counselor.  You will be here in my Courtroom, tomorrow afternoon at 2 p.m.  You will have a permanent address for service of process for your client.  I don’t care if it is a P.O. Box, your office, or a diner.  But if there is no address, I will advise this woman that the court rule…CR 70 or 71, that if she has no good address, she can serve by mail to the last known address.  And you know what that means, right Counselor?”  The Attorney said “Yes.”

By now, I couldn’t conceal my grin, having encountered a similar situation years before when I practiced family law, but not having been fortunate enough to a have a Commissioner willing to deal with the issue so...directly.  The Commissioner saw my grin, and had trouble concealing his own.  “Make sure your client understands that if you aren’t here with an address for service of process, or having authorized you to accept service of process going forward, she will end up getting whatever she asks for in petitions to the Court by default.  I’ll see you tomorrow, Counselor.”

The next party got up, when he called out her name.  She got up, and was reluctant to come forward.  If I wasn’t an attorney, and had just witnessed that exchange, I’d have been reluctant to approach the bench, too.  She approached.   He asked her “You want to withdraw this restraining order?”  I could barely hear her mumble “Yes.”  His brow furrowed as he flipped through the pages.  “Why do you want to withdraw this?”  I couldn’t make out her response.  He asked her “How about I remove it all but the paragraph that says he can’t hit you?”  She replied “Ok.”  He looked at the order again.  “Is this what you want?”  She answered “Yes.”  He looked at the order again and asked “Did he ask you to this?”  “Yes.”, she replied.   He looked at her and said “I’ve looked at his record.  The police are very familiar with him.  Like they know him on sight.  From the front and back.  I’ll alter this order like we have agreed, but there is very likely a criminal restraining order in place also.”  He signed the order and gave it to her.  [There was more to this exchange, but I omitted it because I see no need to recount details that could detract from what dignity she had.  But a very telling part of the exchange was when he asked her about several social programs set up to help women in her circumstances, and was told in response to each one he named that they couldn’t help her or didn’t help her.]

During this exchange, I sat listening quietly, and thinking “I couldn’t do this.  I couldn’t listen to this stuff day after day, and not either lose my mind, or become so mean and bitter that I still couldn’t do my job.”  I am thankful for people like this Commissioner, and a great many family law attorneys who are good at what they do, and can retain a professional composure.  God bless them, because the alternative of NOT having them would be even more awful.

Anyone who thinks that the answer to society’s problems is MORE government should have to spend a week in their local court that has jurisdiction over felonies and family law cases.  Sit in court and listen to the things said in the hearings.  Walk the halls and listen to the conversations.  Listen to people as you walk through the parking lots.  And if you still think that more government is the answer, you will never understand.

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Why Having A Business Attorney Isn’t Enough

Running a business these days can be more complicated than many people think.  I frequently meet with people who are starting a business who come to me to set up a corporation or a limited liability company and discuss what they will need to do to get the administrative things out of the way so they can actually do the work they are starting the business to do.  And far too often, when the conversation departs the realm of the general information and gets down to the choices they need to make, the client will ask me “Which should I chose, the corporation or the LLC?”, and I will respond with a question of my own: “What does your CPA or accountant think you should do?”, and then I see it.  The blank stare, followed by a look of confusion.  Then the inevitable question.  “Why would I ask the accountant?  Isn’t it a legal question?”

The fact of the matter is that choice of entity is a legal question, legal considerations are not the only considerations.  If your concern is for liability protection, there really is no difference between a corporation and an LLC (if you observe the formalities).  From my perspective as a business attorney, the nature of the business itself, and how the business will be owned will weigh more into the decision than the question of liability.  But there can be some serious tax considerations that may, and should, override other considerations.  This is why I want to know who the client’s CPA is, and what their CPA thinks about the choice of entity, and provisions that may be necessary in a shareholder’s agreement or an operating agreement.   This approach may seem unnecessarily costly to some clients, but tax planning at the beginning of a business venture is far less costly than trying to mitigate a tax problem later, or as I am fond of saying “Fixed haircuts cost extra.”

But your team as a business owner shouldn’t just stop with your attorney and your CPA.  You should also have an experienced insurance professional.  When I meet with resistance at this suggestion, I explain it like this: “You hire the CPA to keep more of what you earn.  You hire me to keep your personal stuff separate from your business stuff.  But you need to hire a good insurance person to keep your business.”

There are a number of things that a business does that requires insurance.   If you lease space, your lease invariably requires you to carry general liability protection.  If your business owns vehicles, you need to insure them.  If you deal with the public, you need insurance.  Dealing with one person or group on this can help you to make sure that you aren’t under insured, over insured, or paying for overlapping coverage when you didn’t plan to do so.

Some people are successful in business because they get lucky.  More people are successful because they plan for success.  A good business team, all working together can help you put together a plan that fits your business, and is tailored to your goals.

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Filed under Business Law, Pieces of the puzzle, Planning