Matthew Kenney

Small Business | Workplace Law

Is an English-Speaking Only Workplace Legal?

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My Business Law students are often surprised to learn that the State of Florida, unlike the United States of America, has an official language: English. See Article II, Section 9 of the Florida Constitution. So, does that mean employers can require employees to only speak English at work? Generally speaking, the answer is “no”.

Florida employers who attempt to unreasonably require an English language-only workplace may experience a similar fate to the Texas resort, which recently paid more than $2.6 Million in damages for requiring 25 Hispanic employees to speak English only.

Students often ask: If English is the official language in Florida, why is requiring an English speaking workplace illegal? The reason: Such a policy violates the Federal Civil Rights Act of 1964 (and the Florida Civil Rights Act of 1992). Preventing employees from speaking their primary language is considered National Origin discrimination because language is a manifestation of one’s birthplace.

Stated differently, racist managers might try to circumvent laws against racial discrimination by prohibiting employment based on language instead. However, government agencies and plaintiff lawyers are wise to this trick. Prohibiting certain languages in the workplace is tantamount to prohibiting certain types of people, and smart people know it.

Employees should know, however, that Federal and Florida anti-discrimination laws generally apply to workplaces with 15 or more employees. Some county ordinances (e.g. Osceola and Orange) reduce the threshold number of employees to as little as 5 or 6. However, it’s still technically legal for very small businesses to require an English speaking workplace. Immoral, perhaps…but not illegal.

This is another reason why employees should consider the size of an employer (based on the number of employees) before seeking employment. Some laws apply to employers of all sizes, while other laws apply only to some employers. Likewise, employers should know what laws will apply as their businesses grow. Again, employment law is often dependent on the size of a company based on the number of workers employed, not the amount of revenue generated.

(c) Copyright 2019. All Rights Reserved.

Beware of Legal Forms

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Parties signing contract
Contract Formation

A key to business success is the ability to distinguish a cost from an investment. In business, we’re correctly taught to reduce costs. But how do you define costs? If you look at legal fees as a cost, you’ll seek to avoid them. One seemingly smart way of reducing legal fees is using legal forms found online. However, is this a smart idea?

Words and punctuation mean things under the law. A well-drafted business contract, therefore, is tailored to your unique situation and jurisdiction. For example, it likely has parol evidence, severability, and forum clauses inserted to protect you. Just wondering: Do you even know what parol evidence is? If not, then how will you know if a parol evidence clause is missing?

I chose three random contract concepts, but could easily rattle-off a dozen more. Any transacational lawyer could. We distinguish between applying the Uniform Commercial Code versus the Common Law; know why a contract should use Oxford commas; and explain the Latin maxim Contra Proferentem to clients on a daily basis. It’s our business. We’re experts at contract review and drafting, just like you’re likely an expert in your occupation.

Drafting and interpreting contracts is a skill developed over thousands of hours of study and practice. If you hire a transacational lawyer to review a downloaded form, we will invariably find a lot of problems with that form. Some of the boilerplate language may suffice, but we’ll find problems a non-lawyer won’t recognize. Those problems can be very costly if the form is signed and becomes a binding contract.

Whoever wrote a legal form found online — if it was even written by a licensed attorney — is not protecting you, or your business. And, you’re not protecting yourself if you incorrectly view contract drafting as a cost, rather than an investment.

Sexual Harassment, Customers and Employers

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Anyone who says “the customer is always right” has never had a customer. While most customers are respectful of employees, some are very disrespectful. Being obnoxious is not illegal. However, customers who sexually harass a company’s employees are acting illegally — and the employer can be made to pay.

Sexual harassment is defined by the Equal Employment Opportunity Commission as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.” Consider these statistics to provide some context into the pervasiveness of this problem:

  • The Association of Flight Attendants reports that 68% of flight attendants have experienced sexual harassment by fliers.
  • National Public Radio reported that 53% of hotel housekeepers have experienced sexual harassment from guests.
  • Harvard Business Review reported that 90% of female (and 70% of male) restaurant servers have experienced sexual harassment, with incidents from customers more than doubling incidents involving managers.

Unfortunately, many companies ignore such harassment as part of a longstanding “the customer is always right” culture. The customer isn’t always right, and employers have to step-up on behalf of their employees. Sexual harassment is never acceptable. Employers need to get their minds around this concept…or they’re going to lose good employees; and write big settlement checks needlessly.

Companies should have zero-tolerance policies related to customer-based harassment (and educate customers about these policies). They should empower employees and managers to confront abusive customers by denying service. Employers should keep accurate records, and create a culture where treating employees with respect is the norm.

If you are sexually harassed by a customer, you should report the incident to your Human Resource Manager. Upon notice, the company must take steps to stop the harassment. If the problem continues, you should contact an employment lawyer to put a stop to it. Alternatively, you can have your lawyer provide the notice to HR. This approach is likely to get your employer’s attention, since an employment lawyer will outline the legal ramifications should the problem continue.

Internships and the Law

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The issue of unpaid internships is a challenging aspect of business administration. In theory, internships provide a good opportunity for new job entrants. In practice, internships can land a company in legal trouble. Here is the key thing to remember: Under the law, your company cannot be the “primary beneficiary” of the relationship.

Legal principles behind unpaid internships in the USA date to 1947 when the Supreme Court articulated six rules employers must follow. The federal law applicable to internships is the Fair Labor Standards Act (FLSA) of 1938.

Do you see the problem? The laws were written during the Roosevelt and Truman Administrations. The FLSA has been amended several times across the decades, but we still see areas where the law is not harmonized with the market. Internship law is one of those areas.

The world has changed rapidly, but our internship laws have evolved slowly. This has proven problematic. Government has largely left the company/intern relationship to the market, which has resulted in exploited interns and lawsuits.

Today’s courts look to the following guidelines set forth by the Department of Labor, based upon Supreme Court precedent, to establish whether the company is the primary beneficiary, thus violating federal law:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship. (Source: US Dept. of Labor, 2019).

Businesses hiring unpaid interns primarily to save money would likely be in violation of guidelines #2, #3, and #4.

If your company is sued by a former intern, his/her lawyer will ask your HR Manager during deposition: “Was your primary motive to save money?” If the HR manager says “yes”, your company will likely lose that lawsuit.

Courts will look at the facts of each case and weigh the factors differently. The legal issue isn’t whether your company can benefit from the use of interns. The issue is whether your company is calling an employee an intern (to avoid paying wages).

Damages to a company from a successful employment claim may include double wages for the former intern, plus attorney’s fees. Inevitably, tax consequences and bad publicity will follow the verdict.

If you’re a business owner thinking about “bringing on interns” to save labor costs, you should think differently. Internships are not about you. Nor are they about your company, customers or profitability. Internships are about students. Your primary motive should be helping students. An ancillary benefit to your company is fine, but benefiting the company cannot be your primary motive.

If using internships as part of your business strategy, be sure to have a policy drafted by a business lawyer, who tailors the policy to Florida court decisions on the topic. Internships are an area where not knowing the law can cause a lot of problems.

(c) Copyright 2019. Matthew G. Kenney. All Rights Reserved.

Understanding Entrepreneurs

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While a Doctor of Business Administration student, I became frustrated during a class. My classmates were defining “entrepreneurs” broadly. I recall one classmate saying “I’ve been working with entrepreneurs for 25 years, they are all paranoid control freaks”. As an entrepreneur, I was a bit offended. But I was also curious. Was my classmate correct?

As any good doctoral student would, I researched the topic of entrepreneur personality deeply. I wrote a paper entitled “Psychographic Segmentation of the Self-Employed”. With the help of Dr. Art Weinstein (my professor and leading scholar in the field of market segmentation), we published the article in the New England Journal of Entrepreneurship.

Our research found entrepreneurs can be classified into groups. Some are altruists, others have parental relationships with their firms, some are exemplars with a talent for commerce, and some are motivated primarily by a need for control. At the very least, companies should not market to small business owners as one market. Rather, as a large market with multiple market segments.

Recently, Dr. Weinstein and I learned our article is among the most downloaded articles in the journal’s history. It’s been downloaded by thousands of people at leading companies and universities globally, and cited by numerous scholars.

My motive in writing the article was to prove education is the best cure for prejudice. Having influenced others to respect the differences between entrepreneurs, whether that influence occurs in a classroom of boardroom, is rewarding for a business educator.

However, as a lawyer there is a different benefit: Better understand entrepreneurs. An attorney who understands a client’s motives is better positioned to help the client succeed. Not every entrepreneur wants a huge business, or to build a global empire. Some just want to make a difference in their communities. Some want a lifestyle business that serves their desires, not a business that consumes their lives. That’s why I start discussions with new entrepreneurs with a simple question “What do you want from this business?” Once that question is answered, it is easier to choose the best legal structure moving forward.

Beware of Counterfeiting

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By some estimates, the cost to legitimate brands from counterfeiting is $1.8 Trillion annually. The cost of this intellectual property theft to American companies has been estimated at $600 Billion annually. Small Business owners are increasingly seeing their products knocked-off and sold on e-commerce platforms.

If you are a small business owner, it’s important to take the issue of counterfeiting seriously. Federal law provides remedies for victims. For example, if your registered trademark is violated — the remedy can be up to $150,000 per infringement. Courts can also order a defendant to pay your attorney’s fees; and pay punitive damages etc. 

If your company is a victim of counterfeiting, a business lawyer can help you understand your rights; and notify the proper authorities. Your lawyer will then likely connect you with a litigator. While it can be challenging to collect money from foreign manufacturers, plaintiffs may sue the US retailers and web-sites that facilitated the crime. Think about it: E-commerce billionaires, their employees and investors are profiting from the sale of counterfeit goods on their websites. Is that fair?

While buying counterfeit goods is not considered a crime, re-selling them is a crime. It’s a crime even if the re-seller does not know the goods are counterfeit. There is a Latin maxim: Ignorantia juris non excusat. Ignorance of the law is not an excuse. If you sell counterfeit goods, you’re breaking the law. Period.

Trademark and patent infringement are strict liability crimes. Intent does not matter. The act is what matters. A business owner has a responsibility to maintain the integrity of his or her supply chain. The criminal penalties for selling counterfeit goods can range up to $2,000,000 and 15 years in jail. Therefore, it’s a good idea to make sure anyone with purchase authority within your company knows the consequences of buying counterfeit goods.

Lastly, business owners have to understand: Counterfeiting is not a victim-less crime. Behind counterfeit goods there is nothing but greed, human suffering and environmental destruction. Nothing good comes from counterfeiting. It’s a scourge on society and commerce.

(c) Copyright 2019. Matthew G. Kenney

Hostile Workplaces

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Learning the Law: Hostile Workplace Law.

A hostile workplace is one where discrimination or offensive comments (and/or actions) are based on race, religion, sex, sexual orientation, age, national origin, disability, equal pay, pregnancy, retaliation, or sexual harassment.

Employees are legally protected from harassment and/or discrimination, under both Florida and Federal law. Offensive comments need not be addressed to an individual. For example, a manager’s general comments about women, or a minority group, would likely constitute a hostile workplace. Quid pro quo (i.e. “this for that”) harassment is illegal, and occurs when an employment decision is based on the employees willingness, or unwillingness, to do something. Sexual harassment, for example, often involves quid pro quo harassment.

Hostile workplace law is fact specific, and there are many factors affecting a victim’s right to recovery. These include, the number of employees within the company, state and federal statutes of limitation; the position of the harasser in the company; notice to the employer etc.

Remedies for victims are set by state and federal law, and may include attorney’s fees and court costs. In Florida, the maximum recovery is $100.000. Under Federal law, the maximum recovery is $300,000. Recovery can also be non-monetary, such as a promotion; or elimination of the hostile behavior. The goal of the remedy is to place the victim in the situation he/she would be in, without the discrimination or harassment.

If you are experiencing harassment and/or discrimination at work, feel free to call 407-693-2050 for a complementary consultation.

Secured Transactions

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Imagine you own a business selling goods. A good is anything tangible and movable, regardless of dollar value. A customer places an order, but then does not pay you. What do you do?

Most business owners wait, continue to wait, possibly sue, and hope they get something back. The better question is: What should you have done?

The answer: Use Article 9 of the Uniform Commercial Code to protect your business by securing the transaction. Here is how I’d show a business owner how to protect her company. I would draft a security agreement; and then file a financing statement with the state.

This way, the goods my client sold become collateral. If the buyer sold the goods, then any of the buyer’s assets will be seen as collateral too. Stated simply, my client is going to have a much better chance of getting her money. If the buyer does not pay, my client can start repossessing the buyer’s assets. What if the buyer goes bankrupt? Well, as a secured creditor my client is first in-line to collect the remaining assets. If she did not secure the transaction, she would have been at the end of the line. Let the law protect you. If you’re business is selling goods…secure every transaction. You’ll be glad you did.

Lost & Found Law

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As kids we learn the nursery rhyme “finders keepers, losers weepers”. However, when it comes to finding a lost item in a business…it’s not that simple.

The origin of the “finders keepers” saying is rooted in the English case of Armory v Delamirie in 1722. Armory was a young boy working as a chimney sweep. He found a jeweled ring in a pile of ash and took it to a jeweler to have it valued. However, the jeweler removed the jewels; gave back the ring, and said the ring was worth only three halfpence.

Armory was not the owner of the jewels, rather the finder. The true owner was unknown. Until the owner was found, however, the court held that Armory had the right to possess what he found. Today, each state has property laws concerning found property. Yet, this nearly 300 year old finders rule still applies to many – but not all – situations.

The finder of property generally has title of it over subsequent claimants…but not over the true owner. So, what happens if an employee finds an item – valuable or not – in a retail store or other type of business? May he/she keep it? The answer is “no”. The found property would revert to the real estate owner’s possession until the true owner is found. In commerce, finders are not keepers. The nursery rhyme was wrong.

When a personal item is unintentionally left behind by a customer it’s considered lost. When placed-down intentionally, then forgotten, the property is considered mislaid. For example, if a customer puts her sunglasses on the service desk and forgets them…she has not lost the glasses. The glasses are mislaid. If the glasses fall from her handbag they are lost. Whether lost of simply mislaid, however, the sunglasses are still owned by the customer.

A finder only becomes an owner if the customer gives up her claim to ownership. This is known as abandonment. However, a customer is unlikely to abandoned something lost or mislaid in a business. Rather, she has an expectation that the finder will contact her. This final point gets to why the real estate owner would get ownership if the property goes unclaimed. Customers would expect a business or property owner to protect her interests.

These scenarios can get thorny in-practice, which is why it’s a good idea to have a lost and found policy. Florida code chapter 705 outlines the rules finders must follow. In Florida, finders who fail to comply with the law can be charged with theft.

(C) Copyright 2019. All Right Reserved.

A Tip to Avoid Lawsuits

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Have you ever noticed that leaders of companies love to promote their commitment to ethical business practices? Go to any public company’s annual report and do a search for the word ethical, or ethics, and you’ll see a very nice discussion about the firm’s commitment to ethical business practices. Yet, when you look at litigation trends you see that the number of disputes has never been higher. One study showed that 83% of the corporate counsel surveyed expected litigation to increase, up from 79% the previous year.

Herein lies the problem: Ethical conflicts arise in business, in part, because people don’t define the word “ethical” the same way. Stated differently, it is possible that business owners are causing ethical dilemmas — that lead to lawsuits — by not really understanding the philosophical aspects of ethics.

Leaders don’t seem to be spending enough time understanding this simple truth: What is ethical to one person may not be ethical to the next. That is, they are accusing others of being ethical without delving into the philosophical foundation of ethics. Prerequisite knowledge is as important in business as it is in school. One can’t skip the theory and go straight to practice. It isn’t a sustainable strategy.

For example, assume you are an American entrepreneur sending your production to China, which will result in 100 lost American jobs. Is this ethical?  The answer is: It depends on your ethical philosophy.

If you are an ethical egoist you would say “yes”, as you are doing something legal and in your best interest. If you adhere to Divine Command Theory (i.e. integrating religion into your decision making) you would likely say “no”, as China is officially an atheistic state.

The holder of a utilitarian view would probably say “yes” because, economically anyway, more people (i.e. customers) would benefit from the action than be harmed by it. One who adheres to Kant’s Categorical Imperative model would likely say “no”, since Chinese workers are not given the same rights and benefits as American workers.

Practical Tip: To reduce the risk of disputes, which could lead to lawsuits, you may want to state your ethical philosophy clearly to employees, customers and vendors. Most American corporate managers seem to adhere to an ethical egoist or utilitarian model, which is OK. In a free society everyone has the choice to adopt a philosophical framework that they like.

What they don’t have is the right to assume that everyone else will adopt the same model. Just because you justify an action as ethical doesn’t mean that it is. It just means that it’s ethical to you. Also, an unethical action isn’t necessarily illegal. When a conflict gets to court…ethics get thrown-out the window. All that matters is if the elements of an illegal act have been met.

Therefore, be sure to take the time to let all those you work with know your ethical philosophy. They may not agree with it, but if a conflict arises they cannot say they were unaware of it. This should reduce the risk of conflicts, which will reduce the risk of lawsuits. Sometimes lawsuits happen simply because two companies — that never should have done business in the first place — didn’t agree as to what is ethical and what is not.

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