by eclewis | Jul 3, 2015 | Business News
This year’s rankings by CNBC for best states for business are in, and Colorado has taken the #4 spot. This comes as a significant, but not surprising, improvement from last year, where we discussed CO’s position at #8 in the CNBC rankings. Take a look at a complete breakdown of the rankings by state and categories here.
The rankings are conducted by scoring each state on 10 key categories including the following (in order starting with the most valuable to the overall score): Workforce, Cost of Doing Business, Infrastructure, Economy, Quality of Life, Technology & Innovation, Education, Business Friendliness, Cost of Living, and Access to Capital. Colorado managed to snag top ten rankings in four categories including: Economy (3rd), Quality of Life (9th), Tech & Innovation (5th), and Access to Capital (8th). Colorado was noted for it’s strong economy with a low unemployment rate of 4.3% and its innovation.
I was surprised to see that the Centennial State only got 9th in the quality of life category, especially since it tied with Iowa for this position. There is so much great outdoor recreation to explore here in Colorado, but you can scrutinize the methodology and rankings yourself with the methodological breakdown available here.
Overall, this news comes as yet another of the growing number of reasons and reports demonstrating that Colorado is a great place to live and a great place to do business. Now could be a great time for you to get started and put your entrepreneurial spirit to work.
If you a ready to start doing business in Colorado, then don’t hesitate to contact the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
by eclewis | Jun 17, 2015 | Business News
On Monday, June 15th, the Colorado Supreme Court issued its ruling in Coats v. Dish, LLC, this was a high profile case in Colorado symbolizing the clash between Colorado law permitting medical marijuana use, Federal law’s criminal approach to all marijuana use, and employers’ anti-drug policies banning marijuana use. All three of these issues came together in this case between Dish Network and Mr. Coats, a former employee of the company.
Mr. Coats is a quadriplegic who tested positive for marijuana while he was employed as a customer service representative by Dish Network. He defended his use by saying that it was done after work for medical reasons and that it was legal in the state of Colorado, and he stated that he would continue to use medical marijuana. He was subsequently fired, and Mr. Coats filed a wrongful termination lawsuit against Dish Network, claiming that his medical marijuana use was protected by Colorado’s “lawful activities statute.” C.R.S. 24-34-402.5 full text available here.
The relevant part of this law for this case was a portion of section 1:
“(1) It shall be a discriminatory or unfair employment practice for an employer to terminate the employment of any employee due to that employee’s engaging in any lawful activity off the premises of the employer during nonworking hours…”
This law is a small exception to the general rule that if you are an at-will employee, then you can be fired by your employer for any or no reason at any time without direct legal consequences. This law protects employees from engaging in lawful activities that they engage in off the employer’s premises during nonworking hours. Note however that there are some exceptions even to this exception where employers may still fire for lawful, off duty conduct, but those were not at issue in this case.
Some news reports covering this story have imprecisely framed the issue. They claim that the CO Supreme Court was ruling on whether or not employees of businesses can use marijuana “off-duty.” This portrayal suggests that anyone who is employed and uses medical marijuana can no longer use it because of the ruling. This is not quite right.
What the CO Supreme Court was actually deciding was whether or not Colorado’s “lawful activities statute,” discussed above, protects employees who use medical marijuana from being fired for using it off the premises during nonworking hours. Ultimately, the CO Supreme Court determined that the word “lawful” in the law is not limited to Colorado law only. Instead, they held that it meant that it must be lawful under Colorado and Federal law, and that since all marijuana use is criminal under Federal law, then medical marijuana use would not be classified as “lawful” under the statute and would not be covered by the statute.
You may be thinking about the recent actions by the Federal government not to intervene in states where marijuana use is legal and how that related to this decision. The CO Supreme Court addressed this in a footnote:
“The Department of Justice has announced that it will not prosecute cancer patients or those with debilitating conditions who use medical marijuana in accordance with state law. Similarly, in December 2014, Congress passed the Consolidated and Further Continuing Appropriations Act that prohibited the Department of Justice from using funds made available through the Act to prevent Colorado and states with similar medical marijuana laws from “implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” Consolidated and Further Continuing Appropriations Act, 2015, Pub. Law No. 113-235, § 538, 128 Stat. 2130, 2217 (2015). However, marijuana is still a Schedule I substance, and no medical marijuana exception yet exists in the CSA. As such, medical marijuana use remains prohibited under the CSA.”
Ultimately, this case means that if an employer fires you for using medical marijuana, the “lawful activities” statute does not protect you, so it is up to the employer to decide if medical marijuana use is acceptable. In practice, this may mean that, employed persons cannot use medical marijuana, but legally speaking, it is up to the employer to make that decision. As a Colorado business, this means that it is up to you to decide how you want to address medical marijuana use by employees, and it appears that this decision has not restricted your authority to manage employee drug use any differently than before this case was decided.
If you have questions about employment laws relating to your business, please contact the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
by eclewis | Jun 10, 2015 | Business News
Here in the 10th Circuit, where Colorado is located, it was previously considered a requirement by the courts that discrimination claims under Title VII based on a religious accommodation required the employer to have actual knowledge of the religious accommodation request from the employee or prospective employee. In practice, this would mean that an employee or applicant would have to ask the employer for such accommodation before they could be liable for discriminating against them for this reason. At first glance, this sounds like it makes sense, but in practice, things are more complex. The Supreme Court recently reversed the 10th Circuit’s approach in an 8-1 opinion in the case of E.E.O.C. v. Abercrombie & Fitch Stores, Inc.
You may have heard of some of these cases in the news, as there have been a few. The gist of the facts from these different cases is that an applicant wearing a headscarf, as part of their religious beliefs, was not hired by Abercrombie, despite being qualified. The reason for this was because of the “Look Policy” that Abercrombie has for all of its employees, which prohibits “caps” to be worn by employees (there is no definition for caps in the policy but Abercrombie states this covers anything covering up a person’s head). Note however, that Abercrombie has since altered their Look Policy to allow for such religious headwear.
In the recent case, there was no discussion between the applicant and Abercrombie regarding her wearing the headscarf, other than that she was aware that Abercrombie had a “Look Policy” (but no details of the policy were discussed). The applicant never asked if the headscarf was okay and Abercrombie never asked the applicant if they would be wearing the headscarf on the job. Abercrombie simply assumed that the applicant would be wearing it, and did not hire her, since it would violate the Look Policy. The applicant won in district court, but the 10th Circuit ruled in favor of the employer. The 10th Circuit held that an applicant must communicate the need for a religious accommodation to an employer in order for the employer to be liable for discrimination. On review, the Supreme Court held instead that the need (or presumed need) for a religious accommodation only has to be a motivating factor for their decision not to hire the applicant, and that no actual knowledge of the need for such accommodation is necessary.
What does this mean exactly? No actual knowledge is required? Basically speaking, what the court seems to be telling us is that there is a clear distinction between knowledge and motive, and that employment decisions can be motivated by something, despite the employer not knowing with complete certainty as to its truthfulness. Here’s some insight from the Court’s opinion:
“Motive and knowledge are separate concepts. An employer who has actual knowledge of the need for an accommodation does not violate Title VII by refusing to hire an applicant if avoiding that accommodation is not his motive. Conversely, an employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed.”
Here’s an example provided by the Court:
“…suppose that an employer thinks (though he does not know for certain) that a job applicant may be an orthodox Jew who will observe the Sabbath, and thus be unable to work on Saturdays. If the…employer’s desire to avoid the prospective accommodation is a motivating factor in his decision, the employer violates Title VII.“
What does this mean for businesses? It is simple, do not discriminate based on an applicant‘s (or employee’s) religious beliefs, or even based on religious beliefs that you think they have (even if you don’t know for sure). If you suspect that an applicant (or employee) will need a religious accommodation, and you make an employment decision motivated by this, then you have discriminated against that person under Title VII.
If you have questions about how to go about making employment decisions for your business in compliance with the law, please contact the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
by eclewis | Jun 3, 2015 | Business News
The next part of our series on Due Diligence will discuss Employee Due Diligence.
Now if the business you are looking to buy does not have any employees then this may be a simple process, but it may not be as simple as you would think. For example, the business that you are looking to buy may not have any employees per se, but they may instead utilize independent contractors, which may in fact be more properly classified as employees. This could bring up some significant liability and operational concerns going forward, so you will want to have these relationships carefully scrutinized by yourself and a knowledgeable attorney. This way you will know what you are getting into with this business purchase.
Some of the documents you should be looking for are:
- Employment contracts
- Independent contractor agreements
- Non-Disclosure, Confidentiality, Intellectual Property and Non-Compete agreements
- Any employment or Human Resources policies or handbooks
- Documents showing any employee benefit plans such as (health insurance, retirement, bonuses, etc.)
All of these documents can bring up a variety of issues. You need to think about whether or not you want to continue using the same contractors and employees going forward. It may be a good idea for business continuity and transition, but it may also be a good time to make a change as well, especially if you have significant changes in mind or want to bring in key new staff of your own. The enforceability and terms of these agreements can have a substantial impact on the value and continuation of the business, and you need to be sure that you are getting a fair deal with the purchase.
Beyond the documents themselves, it may be a good idea to gauge employee feelings regarding an acquisition and possible change in management. If employees are not happy about such a large change, it could be a disaster in the making to take buy the business. Think carefully and don’t let the excitement of being an entrepreneur cloud your judgment. Trust experienced professional advisors to help you with deals of this significance.
If you need assistance with legal help and/or document drafting for your business sale, please contact the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
by eclewis | May 27, 2015 | Business News
Continuing as part of our series on Due Diligence, we have already outlined Financial Due Diligence, and this time we will take a look at due diligence regarding issues that are more legal in nature.
As part of the due diligence process, it is important that you have the legal documents of the business reviewed, just like you would the business’ financial statements. This can help identify irregularities or potential problems with the acquisition. In addition to documents to review, it may also be a good idea to interview the owners and employees of the company to see if what happens in practice with the business lines up with its legal documentation.
Some of the documents to review include:
- Articles of Incorporation/Organization, Bylaws/Operating Agreement, or any other equivalent document (like a Partnership Agreement)
- Minutes of meetings as well as any stock or other buy-sell agreements between owners regarding their ownership interests
- Documents showing capitalization of the company (meaning who are the stock or ownership interest holders)
- Major contracts the company has with its suppliers, distributors, etc.
- This can also include employment contracts
- Insurance policies benefiting the company
- Any intellectual property rights, licenses, trade secret information etc.
- Documents relating to any lawsuits against the company
These documents will indicate how the company has been formed, as well as who all of the owners are, what types of restrictions have been placed on the company or its owners, and other key legal issues. This can help determine if there will be any complications regarding the transaction, as well as if the business has been run properly and in accordance with the legal documents. Additionally, having this type of documentation reviewed can help understand the business better, which can also help in determining a good valuation of the company. Finally, having these legal documents reviewed can also provide insight into existing or potential liabilities the business is exposed to, so you can understand what you are getting yourself into by purchasing the business.
If you need assistance with legal help and/or document drafting for your business sale, please contact the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
by eclewis | May 20, 2015 | Business News
Whenever you are thinking about buying a business (or selling a business) it is expected that you will perform your due diligence before the sale is final to help decide whether or not the purchase is a good idea by verifying the material facts related to the transaction. This post discussing financial due diligence will be the first in a series discussing the different aspects of due diligence that should be performed prior to finalizing a transaction.
The idea behind financial due diligence is to help determine the value of the company you are buying by reviewing their financial documents. These financial documents should be audited independently to determine their accuracy.
- Financial statements for the past few years
- Income statements for the past few years
- Tax returns for the past few years
- Balance Sheets for the past few years
- Description and valuation of significant assets (including real estate and accompanying title and tax information, as well as information of depreciation schedule)
- Any current budgets, revenue projections, or other similar documents
- Any loan or other promissory note documentation (as well as any security interests against the business or its assets)
You want to be sure that nothing in these documents is questionable or raises any concerns about the current and future value of the company or assets that you are purchasing. You want to be sure that you have all the right information so that you can negotiate in a fair and informed way. If the other party is unable to produce these documents, that may raise a red flag as well, and you will want to be sure that you raise these issues with your professional advisors (attorney, accountant, etc.) to determine what the next course of action should be.
Big purchases can be very emotional, whether it is buying a home or a car, it can be easy to get emotionally attached to the prospective purchase. However, you don’t want to let yourself get so caught up in the emotional excitement of taking over a business that you lose site that this is a business transaction. You need to independently verify that everything is what the current owners say it is with regard to the business you are thinking about buying.
If you need assistance with legal help and/or document drafting for your business sale, please contact the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
