Earlier this week, the Lancaster Planning Commission recommended the approval of a change in zoning for a parcel of land that will be used by Lancaster General Health and Franklin & Marshall Community College.
]]> The two organizations have requested that about 30 acres of land be shifted from being a designated central manufacturing space to one for mixed use. The land in question is between Harrisburg Avenue and Dillerville Road, according to the Central Penn Business Journal.The property is currently owned by a rail company, and is part of a nearly $50 million project to move a rail yard from the space to a former brickyard dump in Manheim Township. If the zoning change is approved, the property should be transferred to the college and the health company sometime before the end of 2013.
The college and health system will use the space together, perhaps for medical education and administrative purposes.
When organizations are developing and making changes, it often helps to work with commercial real estate professionals in order to identify property that suits their needs. This rezoning request is reportedly well suited to the area's strategic plans. It is important that zoning requests have a likelihood of success and that too much time and money are not wasted on developing plans for real estate that will not be feasible.
Source: Central Penn Business Journal, "Zoning change likely for F&M and LGH future project," Holly White, May 17, 2012
]]>After a U.S. Department of Labor investigation in 2007 revealed that Wal-Mart was misclassifying thousands of its employees--and thus not paying overtime properly--the huge company was ordered to pay $5 million in back wages and almost $500,000 in civil penalties last week.
]]> Thousands of effected employees across the country will reportedly receive the back payments from a third-party. A federal administrator has been quoted in news reports saying that she hopes this high-profile case will serve as a lesson to other employers about the risks of misclassifying employees.Harrisburg employers are wise to work with business litigation and commercial law attorneys during both the business formation stage and throughout the growth of their business to ensure they are following wage and hour laws. In addition to unexpectedly paying back wages, misclassifying employees can lead to steep civil penalties and negative publicity. Additionally, an employer might choose to design a compensation package differently depending on whether the employee is exempt or non-exempt.
A gigantic company like Wal-Mart can likely survive the financial hit and publicity blow that such a ruling will deal. However, for smaller scale businesses it really is best to get things right the first time around and avoid any potential employment disputes down the line.
Source: Business Insurance, "Wal-Mart to pay $4.8M in back wages for violations of Fair Labor Standards Act," Judy Greenwald, May 2, 2012
]]>New legislation proposed in Pennsylvania could lead to even more confusion for business owners in the state and those with headquarters in another state but offices within the Pennsylvania border. Two medical marijuana bills have left employers wondering what the future will hold in terms of compliance with laws such as the Americans with Disabilities Act.
]]> Both Senate Bill 1003 and House Bill 1653 have been introduced to General Assembly committees, and both of these bills would legalize the use of medical marijuana under certain circumstances for people in Pennsylvania. The interesting part of enacting bills such as these -- and the part that creates even more confusion for employers -- is that federal law has not classified the use of marijuana as anything but illegal.So where would enactment of the state laws leave employers? Medical marijuana would become legal for those who have a medical need. Would the "medical need" be considered a disability such that employers would have to accommodate employees with a medical marijuana license? How would you handle drug testing?
No employer can expect to know every law, requirement or regulation that has an effect on how he or she operates a business, which is why there are professions who help when a problem arises. Attorneys with experience in business litigation are not just a reactive resource after litigation arises but can also be a proactive resource before a problem begins.
Source: Business Management Daily, "What Pennsylvania employers need to know about medical marijuana," Frank P. Spada, April 22, 2012
]]>An example of this is the growth of Pita Pit restaurants in Central Pennsylvania. The Pita Pit is an Idaho-based fast-service restaurant franchise. Those familiar with it know that the menu is designed for health-conscious consumers.
]]> In 2010, two entrepreneurs from Lancaster County, along with business partners, opened Pita Pit locations in Lancaster and Harrisburg. Late next month the group will open another location in Elizabethtown and they plan to ultimately own 10 to 15 locations in Central Pennsylvania. They plan to open about four of these within the next two years, partnering with a variety of local business to open the restaurants.The healthy restaurant chain was originally founded in 1995 and it began franchising--allowing entrepreneurs to purchase the right to open a restaurant using trademarked information--in 1997. Franchising began in the U.S. a couple of years later, and the company now has more than 300 locations in North America.
The Federal Trade Commission regulates how a franchisor, the owner of the system, can sell the franchisee the rights to sell the goods or services under the franchisor's name. The transaction is somewhat complex, and it is important that the potential franchisee works with an attorney to ensure he or she is aware of the franchisor's background, any litigation or bankruptcy filings involving the franchisor, and the costs and restrictions related to opening a franchise.
Source: Central Penn Business Journal, "The Pita Pit franchise growing in Central Pa.," Jason Scott, April 24, 2012
]]>The employment litigation began as a class action suit filed by former outside salespeople of pharmaceutical giant GlaxoSmithKline. The salespeople claim that the company should have paid them overtime for 10 to 20 hours they worked each week in addition to their normal work schedule. The hours were reportedly necessary for the workers to put in, in order to visit doctors and promote pharmaceuticals.
]]> The federal Fair Labor Standards Act generally requires employers to pay hourly workers overtime for any hours worked in excess of 40 per week. However, there are many exceptions built into this law, including those for many white collar workers. "Outside salesmen" are listed as a specific exemption in this law.Nonetheless, the Labor Department agreed with the class action claim of the former employees of the pharmaceutical company in 2009. The Labor Department said that the exemptions were only to apply if the overtime hours actually consummated in a sales transaction.
If the Supreme Court rules in favor of the workers, pharmaceutical companies will potentially be responsible for billions of dollars in liability. The company has countered that the sales representatives receive a base salary plus performance-based commission. Overtime requirements are not a part of this package, the company has said.
The Supreme Court's decision is expected by the end of June. Pennsylvania employers who have employees that work as outside salespeople might be wise to consult with an employment law and business attorney to ensure that their employees are properly classified.
Source: Reuters, "Supreme Court hears Glaxo overtime pay case," April 16, 2012
]]>Recently, a large Pennsylvania farm was accused of animal abuse by the Humane Society of the United States. While a legal dispute has not yet ensued, Kreider Farms is fighting the allegations early on by inviting other investigations to prove that the farm is not guilty of animal abuse.
]]> Three independent investigations earlier this week reportedly found no evidence of animal mistreatment and a Department of Agriculture inspection was under way today. Kreider Farms has said it expects the DOA's investigation to corroborate the others.The Humane Society of the United States released photos and video footage last week that it said was taken by an undercover operative at one of the Kreider Farm's egg factories. The images show chickens tightly packed into cages, as well as diseased and dead chickens. There were also piles of dead hens in barns and very high ammonia levels, the Humane Society reported.
In its report, the Humane Society criticized the farm for not supporting a federal bill that would mandate higher animal welfare standards, but the farm has said that it does actually support the legislation.
It is unclear whether the Humane Society will file any legal action against the farm, or whether Kreider Farm's--which has said the footage may not have even been taken at their farm--will file a lawsuit of its own. The Humane Society's claims may hurt this farm's business, and if the claims are not true, the farm may want to pursue legal action.
Source: Central Penn Business Journal, "Kreider Farms disputes abuse claims," Tim Stuhldreher, April 13, 2012
]]>While developing or continuing an internship program in Harrisburg can be a good business idea, it can also be a risky one. Interns are usually bright, ambitious college students who are eager to gain experience, making them assets in the workplace. However, federal employment law has drawn a fine line between "employee" and "intern," and how each must be treated. Misclassifying an employee as an intern can lead to legal troubles; lawsuits regarding this issue have shown up increasingly lately.
]]> A for-profit employer may only pay an intern less than minimum wage if the internship position passes a six-point test. The position must meet the following criteria in order to be classified correctly as an internship:If all of these conditions are not met, an employee relationship exists and thus the worker is protected by federal wage and labor laws--meaning they must be paid minimum wage.
Pennsylvania businesses that are thinking about developing an internship program are wise to check in with an attorney who practices business and employment law in order to ensure that the program is in line with federal and state regulations.
Source: The Sacramento Bee, "Job Front: Hiring picture brightens for interns," Darrell Smith, March 5, 2012
]]>However, oftentimes business owners create an LLC on their own not realizing that it will be quite difficult to ever sell an interest in the LLC. A variety of tax, securities and liabilities issues prevent a business owner from simply selling an LLC interest to another party.
]]> Selling an LLC interest in Pennsylvania requires much consideration, ideally under the guidance of both an accountant and business and commercial law attorney.Because the value of the LLC interest and the nature of the sale will affect your personal tax liability, it is important to speak with an accountant about how to limit your liability before selling.
An attorney becomes important when it comes to reviewing your LLC operating agreement. Very often, operating agreements include a provision that controls the price of your interest as well as who may buy it. If there is no such provision and you leave your LLC, state law may forcibly dissolve the LLC.
An attorney can also help you to negotiate the sale as well as write a contract for the sale. Furthermore, a business and commercial law attorney will inform you of any personal liability that exists for the LLC's debts. In some cases, the new owner assumes these debts, but in others you may be liable for debts that were personally guaranteed.
Source: Reuters, "3 Things To Do Before You Sell Your LLC Interest," Jennifer K. Halford, March 29, 2012
]]>An Associated Press story which circulated the nation this week told the stories of job applicants all over the country who are being asked by hiring managers to turn over their Facebook passwords. Employers are reportedly doing this to check prospective job candidate's backgrounds. The public seemed to see this as a breach of privacy and now Facebook has responded with a warning to employers who engage in these hiring practices.
]]> Facebook has said that asking job candidates or employees for their passwords is an invasion of privacy and that it may pursue legal action if employers continue to do this. The statement, made by Facebook's chief privacy officer, also said that doing this may open the employers up to discrimination claims if they do not hire a candidate after learning of certain affiliations via Facebook.Several states are currently working to explicitly outlaw this practice, including Maryland and Connecticut. The Department of Justice does consider it to be a federal crime when someone enters a social network in violation of its terms of service. Nonetheless, it has also said it is unlikely that the government would prosecute such crimes.
Employers in Pennsylvania should keep a close eye on this issue. Any employers that currently screen job applicants in this manor would be wise to speak with an employment law attorney about whether this may present any legal issues.
Source: PCMag.com, "Facebook Condemns Those Requesting Passwords of Interviewees, Employees," Leslie Horn, March 23, 2012
]]>The project has run into a bit of red tape during ongoing reviews with Lower Allen's Board of Commissioners. Wal-Mart needs flood plain maps revised in order to build on the site, and the board is seeking a ruling from the Federal Emergency Management Agency before deciding on the matter.
]]> The engineering consultants who are working on Wal-Mart's plans say the flood plain maps need to be updated with more accurate information about the course of a small tributary of Yellow Breeches Creek. If FEMA and the board of commissioners deny the request, Wal-Mart's plans will need to be changed.While Wal-Mart stores are very large and must meet far-reaching and detailed regulations in order to be built, even small businesses go through extensive approval processes with local governments before opening up shop.
When developing a new business, there are many levels of approval that one must receive from the local government and business authorities. For this and other reasons, it is very important to make very intentional and pointed business plans, and to study any potential barriers very thoroughly. It can be very costly to go far into the development process only to have to start over because of an unchangeable zoning regulation or restriction. It can be helpful to work with business and corporate law professionals during this process as they may be able to foresee many of these potential roadblocks.
Source: Central Penn Business Journal, "Lower Allen waiting for FEMA ruling before Wal-Mart vote," Jim T. Ryan, March 13, 2012
]]>A woman is currently suing her former employer, a Pennsylvania-based chiropractor, alleging that the employer fired her because she missed 11 days of work due to pregnancy complications. However, her employer has filed a counter-suit, claiming that the woman broke an employment contract under employment law.
]]> The woman alleges that she missed 11 days of work because of a severe form of morning sickness. When she called her employer to say that she would be coming back into work, the employer told her not to do so, she said. Several days later the employer reportedly cancelled the worker's health insurance and later hired a replacement.The woman was under a four-year contract which stated that if she left the business during this period, she would owe $50,000, for which the employer is now counter-suing.
Under Title VII of the Civil Rights Act of 1964 it is illegal to discriminate against a woman because of a medical condition related to childbirth or pregnancy in addition to childbirth and pregnancy.
However, under the Family and Medical Leave Act, maternity leave is only required f employers with 50 or more employees, and this appears to be why the small chiropractor's office believed it did not need to offer the woman leave. Additionally, court papers show that the woman's boss recalls that the woman quit her job over the phone-not that she said she would like to come back in to work, as she has claimed.
Pennsylvania employers who encounter lawsuits or are faced with interpreting employment law are often wise to consult with small business employment lawyers.
Source: ABC News, "New Jersey Woman Alleges Pregnancy Discrimination While EEOC Calls for Updates to Laws," Susanna Kim, Feb. 16, 2012
]]>According to the data, the commonwealth ranked number three in the nation for corporate and industrial real estate projects, and Harrisburg-Carlisle ranked number five among mid-sized metropolitan areas. To qualify, the real estate projects had to either: create 50 new jobs, cost at least $1 million or add at least 20,000 square feet of space.
]]> Pennsylvania saw just more than 450 new projects or existing facilities expand in 2011, according to the report. The only states that saw more projects were Ohio and Texas. Harrisburg-Carlisle was home to 27 projects or expansions.At the same time as this news broke, suggesting that the commonwealth is fostering new and existing businesses, so too did news that Pennsylvania ranks the worst for corporate tax burden.
According to the Washington, D.C.,-based Tax Foundation, Pennsylvania's tax burden on companies is the worst of all 50 states, specifically for mature companies with their headquarters housed in the commonwealth. At the same time, Pennsylvania ranked in the top 10 best states for the tax burden on manufacturing facilities, according to the report.
There are many factors that are important regarding commercial real estate development and property. The regulations as well as tax laws are ever changing. It is often wise to work with an experienced area commercial real estate attorney in order to be sure your business is well-situated for the present and for the future.
Source: Central Penn. Business Journal, "Report: Pa. No. 3 for new corporate sites," Tim Stuhldreher, March 2, 2012
Source: Central Penn. Business Journal, "Tax Foundation: Pa. ranks worst for state tax burden," Jim T. Ryan, March 2, 2012
]]>When it comes to making payments to employees, sometimes some of the issues that arise may become the subject of a dispute between the employee and the employer. Disputes can arise for any number of reasons, especially considering that employees and employers may have different expectations. For example, failure to meet certain subjective goals can negatively affect one's compensation significantly, sometimes leading to disagreements concerning compensation.
]]> The board of directors of AT&T recently reduced the compensation package of its CEO. The AT&T board blames its CEO in large part for a failed acquisition attempt of T-Mobile by AT&T, along with billions that had to be paid to T-Mobile in order to withdraw from the deal. As a result, they felt that it was appropriate to cut the CEO's pay by more than $2 million.While this amount may sound like an extraordinary pay cut, his total 2011 income was approximately $22 million. To put things in perspective however, this was a 20 percent pay cut from the prior year.
Will the CEO of AT&T be unhappy with his reduced compensation package? For most of us that would certainly be difficult to understand. However, it is possible that he may disagree with the determination of his decrease in pay under his employment contract. If so, there is always the possibility that he would dispute that determination by bringing and employment litigation against his employer.
Source: CNNMoney, "AT&T CEO pay docked $2 million for T-Mobile debacle," Stacy Cowley, Feb. 22, 2012
]]>Harrisburg employers may be interested in a workers' compensation appeals case that recently addressed whether Facebook and MySpace photos should be allowed to be admitted into evidence.
]]> The case took place in Arkansas and stemmed from the actions of a 27-year-old man who worked in a warehouse showroom. He sustained a hernia almost three years ago when a refrigerator fell on him in the showroom. When his temporary workers' compensation disability benefits expired more than one year later, he applied for an extension, citing "excruciating pain."The Arkansas Compensation Commission denied the extension application, finding that he had no further medical needs related to the injury and that photos posted to Facebook and Myspace--depicting him partying and drinking alcohol--contradicted his claims of excruciating pain.
The man appealed this decision and asked that the appeals court ban the photos from evidence. His attorneys claimed the photos were a disgrace to the court and that they were irrelevant.
The appeals court allowed the photos and reaffirmed the state's workers' compensation commission. Additionally, in the court's opinion it was noted that the judge did not abuse discretion at all by allowing the photos.
This case illustrates the importance of having attorneys who are very knowledgeable about what types of evidence may or may not be appropriate. Much of what is posted to social media websites is qualified as public information; however there are still many gray areas when it comes to utilizing these types of evidence.
Source: ABC News, "Court Okays Facebook Party Photos in Workers Comp Claim," Lyneka Little, Feb. 3, 2012
]]>Kimberly-Clark Worldwide sued bargain-diaper manufacturer First Quality in March 2009, alleging that the discount diapers made by First Quality violated Huggies' patents. In April, First Quality filed a countersuit, arguing that the Pennsylvania company was attempting to monopolize the business. Now, it appears both disputes may be decided at trial.
]]> A federal judge has analyzed the differences between two different types of diapers in an effort to determine whether First Quality's infringed the patents held by Kimberly-Clark. At issue is the use of elastic across the crotch area of the diapers, and whether First Quality diapers can be said to have this element since a large portion of the elastic on their diapers is severed.The judge -- in an 11-page opinion --could not definitively answer this, and he said that the case should be decided by a jury.
Patent protection affords exclusive rights to the patent-holder. Whether a patent infringement is intentional or inadvertent, the infringer is potentially liable.
However, the federal judge has also ruled that First Quality's monopoly claim can proceed, stating that there is reason to believe Kimberly-Clark may be engaged in anticompetitive conduct under the Sherman Act.
The Sherman Act is a federal statute on competition law which prohibits certain business activities that reduce competition.
If the parties do not settle in the meantime, a jury will decide whether First Quality diapers do infringe on the patents of Kimberly-Clark's, and whether Kimberly-Clark is simply using its patents to disrupt competitors with costly lawsuits.
Going to trial is sometimes the most expensive and ineffective means to resolve a business issue. Often, mediation and arbitration is the best way to arrive at satisfactory resolutions, but sometimes litigation is the only way to resolve a dispute.
Source: Courthouse News Service, "Diaper Giants Head to Trial on Patent Claims," Reuben Kramer, Feb. 3, 2012
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