Breakfast and Business Law

Richard G. Tisinger, Jr.

Protect Yourself

Tips to Avoid Being Sued

Protect YourselfTips to avoid being sued

Richard Tisinger, Jr.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Risk Management

• Identify, Prioritize, and Respond to Risk– Focus on areas of greatest risk– Assign Responsibility for Risk– Create policies and procedures– Communicate and Educate about Risk

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Get Insurance• A comprehensive general liability (CGL)

insurance policy and any other types of insurance specific to your industry will protect your business.

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Know the LawKnow the Basics and When to Get Help• Starting a Business• Contracts• Government Regulations• Labor and Employment• Lawsuits

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Government Regulations

• Obtain the necessary permits for your business and maintaining them

• Comply with local ordinances (zoning, permits, building codes, etc.)

• Comply with Health and Safety Laws

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Labor and Employment

• Improve Your Hiring Practices – Reference checks – Drug Testing – Credit Checks – Motor Vehicle Reports

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Labor and Employment

• Mentor & Monitor Employees• Document• Create Employee Handbook• Do Not Discriminate – Gender, Race, National Origin, Age, Pregnancy

• Address Sexual Harassment• Be Aware of Overtime• Terminate Employees with Care

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Contracts

• Put it in Writing• Beware of “form” or

“standard” Contracts• Attorney Review of

Contracts

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Business Practices

• Incorporate– Protects you against personal and financial liability

risks. – Sole proprietorships leave you open to great legal

risks.

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Business Practices

• Create Policies and Procedures– Explain to your staff

what it is you expect of them

– Evidence of your reasonableness

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Business Practices• Keep Good Records– Avoid Disputes with Clients and Vendors– Avoid Claims of Mismanagement

• Protect Records– Practices– Technology

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Business Practices

• Communicate with Clients and Vendors– Policies– Charges– Time

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Torts

• Follow the Law

• Create Policies and Procedures

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Intellectual Property • Protect your Intellectual Property• Do Not Infringe on Others IP

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Good Business Ethics

• Truthful • Keep your word• Nice• Reasonable• Resolve Disputes Early• Avoid Suing

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Stacey L. Blackmon

Employment

Law: Recent Updates

EMPLOYMENT LAW UPDATE

Americans with Disabilities Amendment ActServicemember Amendments to FMLA

Genetic Information Nondiscrimination Act

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Americans with Disabilities Act (ADA)

• Applies to employers with 15 or more employees • Prohibits discrimination against qualified employees,

or applicants, on the basis of a qualifying physical or mental disability

• Requires employers to provide reasonable accommodations to employees to perform the essential functions of their jobs

• Requires employers to engage in the interactive process with employees to determine eligibility under the ADA and, if the employee is qualified, to discuss options for an accommodation with the employee.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

AMERICAN WITH DISABILITIESAMENDMENT ACT

Effective January 1, 2009

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ADAAA

• ADAAA makes important changes to the interpretation of the definition of a "disability" by rejecting the holdings in several Supreme Court decisions and portions of EEOC's ADA regulations.

• Effect is to make it easier for an employee to establish that he or she has a disability within the meaning of the ADA.

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Disability

• Definition of Disability has not changed: – a physical or mental impairment that substantially

limits one or more major life activities; – a record of such an impairment; or– being “regarded as” having such an impairment.

• However, the interpretation of the definition has changed.

• Focus will not be on whether employee is disabled, but rather on employer compliance.

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Guidelines to Determine Whether Someone has a “Disability”

• Disability “shall be construed in favor of broad coverage” and “should not require extensive analysis.”

• An impairment need not prevent, or significantly or severely restrict, performance of a major life activity to be “substantially limiting.”

• An individual’s ability to perform a major life activity is compared to “most people in the general population,” often using a common-sense analysis without scientific or medical evidence.

• An impairment need not substantially limit more than one major life activity.

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Temporary Impairment• Temporary, non-chronic impairments of short

duration with little or no residual effects that usually will not substantially limit a major life activity.

• Examples: common cold, seasonal or common influenza, a sprained joint, minor and non-chronic gastrointestinal disorders, a broken bone expected to heal completely, appendicitis, and seasonal allergies.

• However, an impairment may still be substantially limiting even if it lasts or is expected to last fewer than 6 months, such as a 20-pound lifting restriction lasting several months.

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Mitigating Measures

• Positive effects of mitigating measures are ignored in determining whether an impairment is substantially limiting

• Except for ordinary eyeglasses and contact lenses

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Examples of Mitigating Measures include

• Medication, medical equipment and devices, prosthetics, hearing aids, cochlear implants and other implantable hearing devices, low vision devices, mobility devices, oxygen therapy, use of assistive technology, reasonable accommodations and auxiliary aids or services, behavioral or neurological modifications, and surgical interventions that do not permanently eliminate an impairment

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Impairments that are Episodic or in Remission

• An impairment that is “episodic” or “in remission” is a disability if it would substantially limit a major life activity when active.

• Examples of impairments that are episodic or in remission include: epilepsy, hypertension, multiple sclerosis, asthma, diabetes, major depression, bipolar disorder, schizophrenia, and cancer.

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Substantially Limited in Working

• An individual with a disability will usually be substantially limited in another major life activity, therefore generally making it unnecessary to consider whether the individual is substantially limited in working.

• Replaces “class” or “broad range” of jobs with the concept of a “type of work.”

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Major Life Activities (MLAs)

• MLAs include “major bodily functions,” such as functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, circulatory, respiratory, endocrine, hemic, lymphatic, musculoskeletal, special sense organs and skin, genitourinary, and cardiovascular systems, and reproductive functions.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Major Life Activities (MLAs)• MLAs also include caring for oneself,

performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, sitting, reaching, interacting with others, and working.

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“Regarded As ” Prong

• ADA prohibits discrimination if employee is “regarded as” having an impairment, regardless of whether or not it substantially limits a major life activity.

• Employer regards an individual as having a disability if it takes a prohibited action based on an actual or perceived impairment that is not transitory (lasting or expected to last for six months or less) and minor.

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“Regarded As ” Prong

• For example, taking an adverse employment action based on a sprained wrist and broken leg expected to heal normally does not amount to regarding an individual as having a disability, because these impairments are transitory and minor.

• Taking an adverse action based on carpal tunnel syndrome or Hepatitis C, or on a 2-day virus that an employer perceived to be heart disease, would amount to regarding an individual as having a disability.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

“Regarded As ” Prong

• Reasonable accommodation is not available to someone only covered under the “regarded as” prong of the definition of “disability.”

• The employee has to have a disability to be entitled to a reasonable accommodation.

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Provisions of ADA that have NOT changed:

• Interactive Process required• Reasonable accommodation standards• Undue hardship defense• Direct threat defense• Still not covered:– Current use of illegal drugs– Pregnancy– Sexual behavior disorders not resulting from physical

impairments, compulsive gambling, kleptomania, pyromania

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PRACTICAL EFFECTS OF ADAAA

• More employees will be considered to have a disability.

• Fewer awards of summary judgment to employers and more jury trials.

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Focus will be on:

• Whether specific accommodations were available or reasonable

• Whether either side was participating in the interactive process in good faith

• Whether a plaintiff was actually qualified for the job, • Whether the employer’s description of the “essential

functions of the job” is legitimate • Whether an employer made an employment decision

“on the basis of disability” or for some unrelated reason

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Practical Tips

• Carefully draft job descriptions that accurately capture the essential functions of each individual, different job position.

• Respond to requests for accommodation.• Develop policy and/or form for employee to

request reasonable accommodation.• Train managers to refer issues to HR.• Properly discipline employees based on

performance issues.Brought to you by: The Burson Center,

Carroll County Chamber of Commerce, and

FAMILY & MEDICAL LEAVE ACT

SERVICEMEMBER AMENDMENTS

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Servicemember Amendments

• National Defense Authorization Act (“NDAA”) enacted in 2008.

• Initially limited to families of National Guard and military reservists.

• Expanded to families of all active duty military personnel effective in 2010.

• Purpose: provide relief for families of military personnel involved in wars in Iraq and Afghanistan

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

FMLA• Covered employers must grant an eligible employee

up to a total of 12 workweeks of unpaid leave during any 12-month period for one or more of the following reasons:– for the birth and care of the newborn child of the

employee; – for placement with the employee of a son or daughter for

adoption or foster care; – to care for an immediate family member (spouse, child, or

parent) with a serious health condition; or – to take medical leave when the employee is unable to

work because of a serious health condition.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Eligible Employee

• Employed by the covered employer for at least 12 months in the previous seven year period, and

• Employed for at least 1,250 hours during the twelve months immediately preceding the requested leave.

• Employed at a worksite where 50 or more employees are employed by the employer within 75 miles of that worksite.

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Covered Employer

• All public employers regardless of size. • Private employers with at least 50 or more

employees working 20 or more calendar workweeks in the current or preceding calendar year.

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SERVICEMEMBER LEAVE

• New qualifying reasons for family members of active duty military personnel for:– Because of any qualifying exigency arising out of

the fact that the employee’s spouse, son, daughter or parent is a covered military member on active duty (or has been notified of an impending call or order to active duty)

– Care for a recovering service member

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Qualifying Exigency• Employee’s spouse, son, daughter, or parent is on (or

has been notified of an impending call to) “covered active duty” in the Armed Forces

• Short notice deployment (less than 7 days notice) – limited to 7 days leave

• Providing childcare on an urgent, immediate need basis (but not on a routine, regular, or routine everyday basis) when the need to provide such care arises from the active duty status of a covered military member for a biological, adopted, or foster child, stepchild or a legal ward of a covered military member

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Qualifying Exigency

• Attendance at military events and related activities such as pre- and post- deployment ceremonies and family support programs

• To spend time with a covered military member who is on short-term, temporary, rest and recuperation leave during the period of deployment (limited to 5 days for each instance)

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Covered Active Duty• For regular Armed Forces, deployment with the Armed Forces

to a foreign country.• For U.S. National Guard and Reserves, deployment with the

Armed Forces to a foreign country.• (Prior to the 2010 NDAA amendments, qualifying exigency

leave did not apply to family members serving in a regular Armed Forces, and there was no requirement that members of the National Guard and Reserves be deployed with the Armed Forces to a foreign country.)

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Military Caregiver Leave• Eligible employee who is the spouse, son, daughter,

parent, or next of kin of a covered servicemember to • Take up to 26 workweeks of FMLA leave in a single

12-month period • Care for a “covered servicemember” • With a “serious injury or illness”

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Covered Servicemember

• Expanded to include a veteran “who is undergoing medical treatment, recuperation, or therapy for a serious injury or illness” if the veteran was a member of the Armed Forces “at any time during the period of 5 years preceding the date on which the veteran undergoes that medical treatment, recuperation, or therapy.”

• (Prior to the 2010 NDAA amendments, military caregiver leave was limited to care for current members of the Armed Forces, including regular components and National Guard and Reserves.)

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

“Serious Injury or Illness”

• Serious injury or illness that was incurred by the member in line of duty on active duty

• Serious injury or illness that “existed before the beginning of the member’s active duty and was aggravated by service in line of duty on active duty in the Armed Forces” that may render the member medically unfit to perform the duties of the member’s office, grade, rank, or rating.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Serious Injury or Illnessof Veteran

• “a qualifying injury or illness that was incurred by the member in line of duty on active duty in the Armed Forces (or existed before the beginning of the member’s active duty and was aggravated by service in line of duty on active duty in the Armed Forces) and that manifested itself before or after the member became a veteran.”

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Next of Kin• The nearest blood relative, other than the covered

servicemember’s spouse, parent, son, or daughter, in the following order of priority: – blood relatives who have been granted legal custody of the

servicemember by court decree or statutory provision, – brothers and sisters, – grandparents, – aunts and uncles, and – first cousins

• Unless the covered servicemember has specifically designated in writing another blood relative as his or her nearest blood relative for purposes of military caregiver leave under the FMLA.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Next of KinReasonable Documentation

• Employer may require reasonable documentation or statement of family relationship.

• Examples of this “reasonable documentation” include “a simple statement from the employee, or a child’s birth certificate, court document, etc.”

• Using a birth certificate or other court document to document the familial relationship outside the immediate family may be difficult.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Length of Leave

• Eligible for up to 26 work weeks of FMLA leave to care for a recovering service member.

• Eligible for up to 12 work weeks of FMLAleave for ALL other qualifying reasons.

• No employee is eligible for more than 26 work weeks of FMLA during any 12 month period.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

FMLA Employer Notice Requirements• Notice of eligibility within 5 business days of receipt

of notice of qualifying reason for leave – no magic words required from employee

• Notify employee of reason if employer determines employee is not eligible

• Written notice to employee if additional documentation is needed to determine if qualifying reason (Rights & Responsibility Notice)

• Written notice that leave is designated as FMLA leave within 5 business days in most cases

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Train Managers & Supervisors• To recognize and handle leave requests from

employees. • No magic words required from employee to

request FMLA leave.• Managers must know qualifying reasons for

FMLA leave. • Proper discipline of performance issues.• No retaliation.• Maintain records.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Title II of the Genetic Information Nondiscrimination Act of 2008

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

• Effective November 21, 2009.• Under Title II of GINA, it is illegal to

discriminate against employees or applicants because of genetic information.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

GINA• Prohibits the use of genetic information in

making employment decisions, • Restricts acquisition of genetic information by

employers and other entities covered by Title II, and

• Strictly limits the disclosure of genetic information.

• The EEOC enforces Title II of GINA

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

“Genetic Information”

• Genetic information includes information about an individual’s genetic tests and the genetic tests of an individual’s family members, as well as information about any disease, disorder, or condition of an individual’s family members (i.e. an individual’s family medical history).

• Family medical history is included in the definition of genetic information because it is often used to determine whether someone has an increased risk of getting a disease, disorder, or condition in the future.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Discrimination Because of Genetic Information

• The law forbids discrimination on the basis of genetic information when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoffs, training, fringe benefits, or any other term or condition of employment.

• An employer may never use genetic information to make an employment decision because genetic information doesn’t tell the employer anything about someone’s current ability to work.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Harassment

• Under GINA, it is also illegal to harass a person because of his or her genetic information.

• Harassment can include, for example, making offensive or derogatory remarks about an applicant or employee’s genetic information, or about the genetic information of a relative of the applicant or employee.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Harassment

• Although the law doesn't prohibit simple teasing, offhand comments, or isolated incidents that are not very serious, harassment is illegal when it is so severe or pervasive that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted).

• The harasser can be the victim's supervisor, a supervisor in another area, a co-worker, or someone who is not an employee, such as a client or customer.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Retaliation

• Under GINA, it is illegal to fire, demote, harass, or otherwise “retaliate” against an applicant or employee for filing a charge of discrimination, participating in a discrimination proceeding (such as a discrimination investigation or lawsuit), or otherwise opposing discrimination.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Unlawful to Acquire Genetic Information, except:

• Inadvertent acquisitions of genetic information do not violate GINA, such as in situations where a manager or supervisor overhears someone talking about a family member’s illness.

• Genetic information (such as family medical history) may be obtained as part of health or genetic services, including wellness programs, offered by the employer on a voluntary basis, if certain specific requirements are met.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Exceptions for Acquiring Genetic Information

• Commercially and publicly available documents like newspapers is permitted, as long as the employer is not searching those sources with the intent of finding genetic information.

• Genetic monitoring program that monitors the biological effects of toxic substances in the workplace is permitted where the monitoring is required by law or, under carefully defined conditions, where the program is voluntary.

• Employers who engage in DNA testing for law enforcement purposes as a forensic lab or for purposes of human remains identification is permitted, but the genetic information may only be used for analysis of DNA markers for quality control to detect sample contamination.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Confidentiality

• It is unlawful for an employer to disclose genetic information about applicants or employees.

• Employers must keep genetic information confidential and in a separate medical file. (Genetic information may be kept in the same file as other medical information in compliance with the Americans with Disabilities Act.)

• There are limited exceptions to this non-disclosure rule.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Practical Tips

• Do not include inquiries about family medical history for:– post-offer, pre-employment medical exams– fitness-for-duty exam

• Inform physician conducting the medical exam of GINA requirement to avoid common questions about family medical history.

• Particularly in smaller towns, there may exist considerable knowledge (whether true or not) of family medical history.

• Train recruiters and hiring managers to avoid making a hiring (or other) decision based on personal knowledge of family history.

• Update non-discrimination policy to include GINA.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Amy L. Velasquez

E-Verify

Program: The

Basics

E-Verify

• The Basics–What is it?–Who does it apply to?–Who can I verify?–How does it work?–Does Georgia have any E-Verify

requirements?–What else do I need to know?

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics - What is it?• A free, internet based program sponsored by the United

States Citizen and Immigration Services (USCIS)• Allows employers to determine if employees are authorized

to work in the United States• Companion to the I-9 form, used since 1986• Authorized by the Illegal Immigration Reform and Immigrant

Responsibility Act of 1996• Pilot program has produced today’s version• Goals are to reduce unauthorized employment and maintain

a legal workforce• Partnership between DHS/SSA/Dept. of State

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics - Does It Apply to Me?

• Who does it apply to?– Businesses that contract with the Federal Government

AND have the FAR Clause in their contract (called qualifying contracts)

– All federal contracts (with a period of performance over 120 days and a value above $100k with exceptions) have FAR Clause as of September 8, 2009

– Speak to contracting official for details about your contract– E-Verify does not apply to employers without qualifying

federal contracts UNLESS your State requires it– If you do not contract with the Federal Government and

your State does not require you to use it, it is purely voluntary

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics - Georgia Law

• Georgia Law and E-Verify– Applies to all public employers– Applies to employers who contract with a State or

Local Government entity to provide services• Contracts for the “physical performance of services”• Contractor must E-Verify new employees • Contractor must submit an affidavit of compliance to

the local government entity • Subcontracts: include language requiring all subs to

participate and comply with E-Verify and I-9 requirements and subcontractor affidavit

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics - Who Can I Verify?

• Federal Contractors– Can choose to verify

entire workforce (and all new hires) OR

– Existing employees assigned to the federal contract AND all new hires

– NO selective verification

• Everyone Else– NEW HIRES ONLY!!– Verify within three days

the employee begins work for pay

– DO NOT prescreen potential candidates using E-Verify

– NO selective verification

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics - How Does it Work?

• Must enroll and register to use it (tutorial, deadlines)

• Input employee information using completed I-9 form

• Your computer talks to the SSA first; if no info, it talks to DHS

• SSA or DHS sends response confirming employee’s authorization to work in the U.S. or issuing a TNC (tentative non confirmation)

• If TNC, you and the employee have work to do

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics- How Does It Work? (cont’d)

• I-9– Employee completes on first day of work; employer must complete its

section by the end of the employee’s third day– Government can audit I-9 forms; employers subject to sanctions– Carefully train staff to follow I-9 instructions– No requirement to copy documents; do not ask for particular

documents– Always use current form available– Accept documents that appear to be valid– Re-verify temporary work authorization documents when expired

(employment authorization cards, H1-B visas, some student visas); DO NOT re-verify other documents

• E-Verify used after I-9 is completed using the information from the I-9

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics- How Does It Work? (cont’d)

• Some 96% of employees are confirmed authorized to work

• TNC = Temporary Non-confirmation– There is a mismatch in the I-9 information and the

information on file at SSA or DHS, or there is no information on file at SSA or DHS

– Now what?• Explain the TNC to employee; ask if he/she wants to

contest• If no contest = Final non-confirmation (terminate)

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics- How Does It Work? (cont’d)

• Employee wants to contest the TNC:• Print out sheet provided which explains the exact

mismatch in the information and contains the phone number and address of the agency the employee needs to contact to fix the issue• Employee has 8 federal government working days to fix

the problem or = Final non-confirmation (terminate)• Sometimes the agency will ask for more time, that will

show up in your computer under the case• Must close out each case (tell the computer the final

result- self termination, termination, no action…)

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics- What it is Not and Things You Need to Know

• It is not a way to prescreen employees - used after hiring

• It does not protect you from DOL/Immigration audits• It does not give you employee’s immigration status• Cannot take any action against an employee during

TNC 8 day contest period• You must display E-Verify posters in a location visible

to employees• Enforcement – Civil and criminal penalties– Self audits

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

E-Verify: The Basics – Information and Resources

• No case law yet = no interpretation• New vocabulary, manuals, web interface as of

June 13• Online tutorials, PowerPoints, webinars

available directly from USCIS / DHS• Training is extremely important for your

human resource staff for I-9 forms and E-Verify

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

References

• 48 C.F.R. 52.222-54• O.C.G.A. § 13-10-90, et seq.• Ga Comp. R. & Regs. 300-10-1-.03• 2010 Ga. ALS 421 • http://www.uscis.gov

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Rebecca J. Dobras

Collections: Collecting from others

and dealing with your

creditors

PART 1Collecting Unpaid Debt:

How to Protect Yourself and Your Business

Collecting Unpaid Debt: Something to Think About

• After 6 months, a business only has a 50% chance of collecting a delinquent debt

• After one year, that chance drops to 25%

You might think you have the perfect customer/client…

But you never know what kind of trouble that person may run into in

the future

ANTICIPATE PROBLEMS IN ADVANCE: The Basics

• Run a Credit Check• Get all important information– Address, Phone Numbers, Where employed– Does the individual have authority to do this?

• Keep Good Records– Keep copies of invoices– Document every payment received– Keep all correspondence – letters, emails, etc

ANTICIPATE PROBLEMS IN ADVANCE: Put the Agreement in Writing

Clearly Defined TermsSigned by all parties to agreementTerms to Include

Payment Terms What is considered a defaultRepercussions for late or no paymentsInterest on Unpaid AmountAttorney’s Fees

ANTICIPATE PROBLEMS IN ADVANCE: Other Considerations

• Have a guarantor to guarantee the loan or debt

• Have the debt secured by real or personal property

What if you receive a bad check?• Criminal and civil remedies• CIVIL: See O.C.G.A. Sec. 13-6-15

1) Write a demand letter to maker of check2) You are entitled to demand:• Full amount of check• $30.00 or 5% of check value, whichever is greater• Any fees charged to you by the bank

3)If you do not receive payment within 10 days, you can take the maker to court. Entitled to:

• Full amount of check x2 (up to $500)• $30.00 or 5% of check value, whichever is greater• Any fees charged to you by the bank• Court costs

YOU ARE NOT GETTING PAID! What Now??

Your Options:1) Let it Go2) Discuss with Client and Negotiate3) Send to a Collection Agency4) Hire an Attorney and File Suit

Or any combination of the above

Considerations Before Taking Action

• How much money is owed?• Is it worth your time?• Does the debtor have the means to settle?• Might the debtor file bankruptcy?• What is your relationship with the debtor?• Will you be able to locate the debtor?• Do you want to hire an attorney or try to collect on

your own?• What is the statute of limitations for filing a court

action?

TO DO FIRST:

• Call Debtor AS SOON AS the account becomes delinquent

• Follow up with debtor if no payments are received

Your Options: Settlement

PROS Probably best way to keep a

working relationship going Can set up a payment plan

that works for everyone Can begin to receive

payments immediately Not as expensive

CONS Might not get the total

amount that you are entitled to

Debtor might still not pay and you have to start the process over

Your Options: Collection Agency

PROS Will harm debtor’s credit

score Can be more aggressive in

collection efforts than you may have time to

CONS Most agencies take a

portion of the amount owed as their fee

Collection agencies cannot garnish wages, foreclose on house, place liens on property etc

Subject to the Fair Debt Collections Practices Act

Your Options: Legal Action – Without An Attorney in Magistrate Court

PROS Cheap Faster Process is simplified Still get a binding judgment

that is enforceable

CONS Magistrate courts will not

hear cases with damages that could exceed $15,000

Not entitled to the same legal protections No jury trials No discovery

Other side is still entitled to have a lawyer

Your Options: Legal Action with AttorneyPROS

Threat of legal action may frighten debtor into payment or settlement

Lawyer know the intricacies of the law

You would be relieved of figuring out how to do it on your own

May be entitled to attorney’s fees from debtor

CONS Expensive Timely Might not see any money

for years as the court process drags on

PART 2Dealing with Creditors: How to Protect

Yourself

Word of Advice

Do NOT ignore the problem and hope it disappears!!

It Usually WON’T!

Your Rights: Fair Debt Collections Practice Act

If you owe money, collection agencies cannot:1) Harass you2) Use abusive or profane language3) Threaten you4) Call you after 9 pm or before 8 am 5) Call you at work6) Give you any misleading information

Your Rights: Fair Debt Collections Practice Act (Cont.)

What To Do If Collection Agency Violates Act:• Keep a written log of each time any kind of

abuse or harassment occurs• File a formal complaint with the Federal Trade

Commission• Send complaint to Georgia’s Governor’s Office

of consumer affairs and to creditor• File suit against collection agency and creditor

for violations of FTC regulations

Your Rights: Power of Creditors

Creditors on their own have no power to:1) Garnish your wages2) Sell your home

3) Place you in prison

Only Courts Can Order These - So do not let empty threats frighten you into hasty action.

In Over Your Head? Prioritize Your Debts

• Always make family necessities your top priority

• Mortgage payments should also be a top priority

• Essential utilities next• Car Loans• Unpaid child support could land you in jail• Credit Cards, Other unsecured loans: LAST

Handling Unpaid Debts:When You Only Have Small Debts

• Small debts need to be repaid as soon as possible

• Speak to creditors • See if they are willing to work out alternative

arrangements

Handling Unpaid Debt:When You Have Large or Multiple Debts

• Do not try to pay off large debts in their entirety as fast as possible

• Your Options1) Speak to creditors directly2) Talk to a debt settlement agency or a lawyer to negotiate on your behalf3) Bankruptcy

Kristin H. Dial

Business

Structures: Overview of common

business structures &

issues regarding

commercial leases

Overview

• Business Structures– Types– Advantages

• Commercial Leases– Terminology – Common Issues

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Why Form an Entity?

• LIABILITY PROTECTION• Tax reasons • Administrative (banking, hiring employees)• Authority for contracts, transacting business,

etc.

Types of Entities

• Corporations– C Corporation– S Corporation

• Limited Liability Companies (LLC)• Partnerships– FLP (Family Limited), LLLP (Limited Liability Limited)– General, Limited

• Others– Estates– Trusts

Pros/Cons of Entities in General

Advantages• Liability Protection• Accounting procedures• Separation of

businesses/records• Privacy• Facilities co-ownership• Taxation

Disadvantages• Reporting requirements• Procedural

requirements• Documentation• Setup/Administrative

costs

Corporations

• Formation/Documentation– Articles of Incorporation– Bylaws– Resolutions of Directors/Shareholders– Shareholders Agreement

• Membership/Management– Shareholders– Directors– Officers

Corporations

• Advantages– Separate legal entity – Shareholders not liable for debts PROVIDED

formalities followed– S-Corp (pass-through taxation)

Corporations

• Disadvantages– Strict procedural requirements • Annual meetings, record keeping, use title & seal, etc.• “Pierce the corporate veil”

– Administrative dissolution– Dissolution/distribution– C-Corp (double taxation)– Limitations on Shareholders

Limited Liability Company

• Formation/Documentation– Articles of Organization– Operating Agreement– Consent of Members

• Membership/Management– Members– Managers (optional)– Officers (optional)

Limited Liability Company• Advantages– Flexibility– Liability protection PROVIDED formalities followed– Pass-through taxation

• “Disregarded entity” • Choice of alternate tax classification

– Ease of dissolution/distributions– Estate planning uses– Flexibility in membership (ownership)– No annual meeting or seal

• Disadvantages– Fairly “new” type of entity– Formalities for liability protection

Partnerships

• Formation/Documentation– Partnership Agreement– Certificate of Limited Partnership

• Membership/Management– General Partners– Limited Partners

Partnerships

• Advantages– Flexibility– Established case law / procedures– Limited Partnerships – gifting / control /

management

• Disadvantages– LIABILITY of General Partners

Entity Selection

• Liability protection• Employment issues• Taxation issues (consult accountant)• Ownership structure• Setup costs• Procedural/administrative requirements• Reporting requirements

Commercial Leases - Terminology

• Landlord / Lessor• Tenant / Lessee• Common Area Maintenance (CAM)• Trade fixtures• Quiet enjoyment

Types of Leases

In addition to rent & other costs….• Single Net– Tenant pays real estate taxes

• Double Net – Tenant pays real estate taxes + building insurance

• Triple Net– Tenant pays real estate taxes + building insurance

+ maintenance

Issues with Leases

• Rental – Annual escalation or renegotiate

• Term – Short or long period– Automatic renewal

• Termination – Ability to exit any time, only upon default, or

within certain period before renewal, etc.– Ability to sublease

Issues with Leases

• Taxes– Tenant or landlord responsible

• Insurance– Name landlord in policy

• Maintenance/Repairs– Costs, responsibilities– Floors, roof, interior vs. exterior, windows

• Destruction of Premises– Lease continue or not

Issues with Leases

• Restrictions on Uses – Types of products, services, foods, etc.

• Tenant Allowance– Pay for improvements – Paid in advance or refund for expenditures

• Tenants remedies vs. Landlord• Personal Guaranty– Understand what you’re backing up

John A. Harris

Insurance: What

should you do if you are

sued? How insurance

works and is “full

coverage” enough

coverage?

LIABILITY ISSUES / INSURANCE – GENERALLY

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

OVERVIEW– In a typical liability insurance policy, the insurer agrees to

pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury and/or death arising out of the ownership, maintenance or use of an automobile

– The liability insurer agrees to defend the insured in any action brought against the insured for bodily injury (or death) or property damage.

– The liability insurer agrees to pay the judgment up to the policy limits• Business exclusion on personal policies – make sure your business is

covered (i.e. General Commercial Liability Policy [GCL])!!!

CONTEXT IN WHICH YOU MIGHT BE SUED

– Premises Liability – i.e. “slip and fall”

– Automobile Accidents

POTENTIAL THEORIES OF LIABILITYRespondeat Superior (i.e. Agency) = Liability of ownerfor negligence of employee (“Let the master answer”).

Employers and employees can be held jointly and severally liable for the negligence of employees committed within the course and scope of employment

Respondeat Superior - “Course and Scope”

If an MVA occurs and it’s shown that the at-fault driver was operating in connection with his employment at the time, a presumption arises that the employee was operating within the course and scope of his employment at the time of the MVA.• Cell phone / texting• Medication / alcohol / drugs• Running personal errand on employer time

Going to/from work (is typically considered outside course and scope)• BUT employer permitting personal use

coupled with “on-call” status 24/7 may result in “course and scope” finding

POTENTIAL THEORIES OF LIABILITYTypes of “Negligence”

– Garden variety “Negligence” – i.e. Violating Rules of the Road

– Negligent Hiring (knew OR should have known standard)

– Negligent Retention

– Negligent Supervision

– Negligent Entrustment (actual knowledge of incompetence/recklessness)

BE SURE TO NOTIFY YOUR INSURER ASAP!

– Notify YOUR insurer even if you believe the other party was at fault

– Failure to notify may result in loss of coverage (DUTY to notify)

WHAT TO DO IF YOUR REGISTERED AGENT IS SERVED

– IMMEDIATELY submit suit papers to insurer (or insurance agent)

– 30 Days to file an Answer– Existence or non-existence and/or amount of insurance is not

relevant or admissible in the trial of a civil lawsuit for money damages involving bodily injury

– DANGERS OF DEFAULT JUDGMENT

IS FULL COVERAGE ENOUGH COVERAGE?

– Minimum Liability Limits in Georgia: $25,000– How Far Will That Go – consider this (SEE HANDOUT)

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and

Disclaimer

Nothing contained in this PowerPoint presentation is to be considered the

rendering of tax or legal advice for specific cases. Readers are responsible for obtaining

such advice from their own legal counsel. Any information contained herein is intended for educational and informational purposes only.

Brought to you by: The Burson Center, Carroll County Chamber of Commerce, and