Tag: small business owners

Finding the Right Lawyer for Your Business: Part II

By: Lauren Stahl

Fancy awards, badges, and seals are not indicative of a great lawyer. And awards are not all created equal. Business owners should heed caution when looking at lists of awards on a lawyer’s website. A deeper discussion of these so-called “vanity” or “ego” awards can be found in Part I.

Finding a lawyer for your business does not have to be a daunting task. But where should you look to find a lawyer? What questions should you ask? Consider the following advice when searching for the right lawyer for your business.

Where should you start looking?

A great place to start looking for a lawyer is the American Bar Association (“ABA”). The ABA’s website has a great deal of information not only for professionals but also consumers who have legal questions. The ABA specifically has a “Hire a Lawyer” section. On this page, you can find public-service oriented referral services and other tools, such as bar directories, that can help you find a qualified lawyer.

Beyond the ABA’s website, you can search for a lawyer by city and state via a commercial lawyer referral service, such as FindLaw. Similar services are also listed on the ABA’s website.

what are the minimal skills your lawyer should have?

Depending on the type of business you have, you may need a lawyer with the following set of foundational skills:

Contracts. You will need a lawyer who is familiar with your business practices and can prepare contracts between your business and clients, suppliers, and customers. You will also need a lawyer to help you respond to contracts that other parties will want you to agree to.

Taxes and licenses. If your business is in the startup phase, you will need a lawyer who knows how to register your business for state and federal identification numbers. Beyond that, you will a lawyer who understands the tax implications of various business transactions that your business will engage in.

Business organizations. Depending on the stage of your business, you may need a lawyer to advise you on what type of business entity to form (e.g., corporation vs. limited liability company (LLC)). This lawyer should be able to discuss the advantages and disadvantages of each entity and to prepare any paperwork associated with formation.

Real estate. If you are leasing a commercial space for your business, the lease is likely complex and drafted to benefit the landlord. A lawyer with some real estate experience should have a standard “tenant’s addendum” that contains provisions to benefit your business. These provisions can be added to the standard “print form” lease document.

Intellectual property. If you have a media, design, or other creative business, a lawyer who has experience with registering products and services for federal trademark and copyright protection will certainly be helpful. Typically, these tasks are performed by lawyers who specialize in intellectual property. If your lawyer specializes in small businesses, then she likely has a working relationship with a lawyer who specializes in intellectual property.

whaT questions do you need to ask potential lawyers?

When interviewing potential lawyers for your business, don’t be afraid to ask direct questions. Here are a few examples of questions to ask:

Are you well-connected in the area? No lawyer can know everything about every area of the law. But a lawyer should be able to find solutions to your legal problems and refer you to lawyers who specialize in certain areas if needed. If your business has specialized legal needs, the right lawyer for your business should either be familiar with that area or have a working relationship with someone who is. This will prevent you from having to find a new lawyer every time you encounter a different legal problem.

Do you have other clients in my industry? The right lawyer will be somewhat familiar with the legal environment of your industry. If not, a lawyer should be willing to learn. One thing to consider is whether the lawyer represents one or more of your competitors. While lawyers must abide by principles such as client confidentiality, you do not want to risk an accidental slip of sensitive information to a competitor.

Are you experienced? It is important to ask direct questions about a lawyer’s experience. For example, if you know that you want to form an LLC, you might want to ask questions about her experience forming and handling other LLCs. 

How do you educate your clients? A lawyer should be willing to tell you what the law says and explain how it affects your business. A lawyer should be a teacher and take the time to educate you and your staff about legal matters directly impacting business operations. The right lawyer might also distribute newsletters or legal reports that describe recent. developments in the law that impact your business.

what questions do you need to ask yourself?

After interviewing potential lawyers for your business, you will also need to reflect on the interview and should ask yourself questions when determining if this lawyer is the right one for your business. For example:

Do I like this person? You should be able to communicate openly and freely with your lawyer. Trust your instincts and feelings. If you feel that you cannot trust a certain lawyer, keep looking.

Does this person communicate with me? The right lawyer will not simply tell you what you cannot do but will tell you how to do what it is that you want to do. She will discuss all available options. The right lawyer will tell you what other businesses in your situation normally do.

Is her office conveniently located? While it might be easier to meet with your lawyer remotely, consider whether you would like to meet with your lawyer in person. If so, you likely will need to visit your lawyer often in the first few years of business. Choosing a lawyer relatively close to you or your business might be beneficial to avoid wasting travel time every time you need legal advice.

main takeaway

While there is no “right” way to find an attorney or “right” question to ask, it is possible to find the right lawyer for your business. Many small businesses wait until a problem has already occurred to hire a lawyer. Don’t be one of them.

This post has been reproduced with the author’s permission. It was originally authored on April 2022, and can be found here.

Lauren Stahl, at the time of this post, is a rising 3L at Penn State Dickinson Law. She has a B.S. in Biology from Georgetown University. Formerly a medical researcher at the National Institutes of Health and Penn State College of Medicine, Lauren has interests in the intersection of health law and business law. Lauren currently serves as a Comments Editor of the Dickinson Law Review and is a member of the Health Law Society and Women’s Law Caucus. She is also Professor Prince’s Team Lead and the Lead TA for the Legal Writing program.

Sources:

https://www.forbes.com/sites/basharubin/2014/11/14/small-business-expert-how-do-you-find-and-pick-a-lawyer/?sh=31190c8b138a

https://www.americanbar.org/groups/public_education/resources/public-information/how-do-i-find-a-lawyer-/

https://www.entrepreneur.com/article/58326

Small Business Owners Beware: Proactive Measures to Avoid Costly Litigation

By: Lauren Stahl

As a small business owner, you are more likely concerned with sales, managing employees, and cash flow than potential lawsuits. However, many small business owners will face the threat of a lawsuit at some point. And the financial impact can be devastating. A recent study from the U.S. Chamber Institute of Legal Reform revealed that tort liability costs are a “significant drain on…small businesses in particular.”

For many small businesses, which survive on small profit margins, litigation costs are crippling, if not fatal. The effects of litigation can reach far beyond financial loss. An impending lawsuit can—and will—add additional stress to you and your employees. Sitting in a courtroom will not help you to maintain and grow your business. A lawsuit can also harm your business’s reputation, especially if the case is publicized by a local or national media outlet.

To avoid costly litigation, you should consider the following proactive steps to keep your business out of the courtroom and the headlines.

hire experienced lawyers

Many businesses, including small businesses, will have contracts with third parties and employees. Many legal disputes arise surrounding the interpretation of a contract. Often, litigation can be avoided if an experienced lawyer drafts or reviews those contracts.

Hiring a lawyer can be expensive. But spending $500 or $1,000, for example, to have a lawyer draft or review a contract could help the business avoid a $200,000 lawsuit. Cost is relative. A modest sum of money upfront could save a small business an extraordinary sum of money in the future. Consider, too, that something in your business will go wrong—maybe not today but someday. And at that time, a relationship with a lawyer who is willing to help on short notice will likely be necessary.

PUT EVERYTHING IN WRITING

Small business owners might have the temptation to verbally agree or shake hands on an agreement. But think again! All contracts should be in writing. As mentioned above, many legal issues arise from interpreting contracts. Putting contracts in writing will help to avoid miscommunications and misunderstandings about goods, services, expectations, and payments.

Additionally, keeping a strong written record is important. Business owners should keep a record of all email correspondence, invoices or other statements, company policies and procedures, among other documents.

Why is keeping a written record so important? Written email correspondence can help decipher exactly what you agreed to. Invoices and other statements reveal when balances are due. Company policies and procedures should also be in writing as they can be used to demonstrate nondiscriminatory employment practices. Putting contracts in writing and keeping a written record are essential to avoid costly litigation.

DEVELOP CLEAR WORKPLACE POLICIES FOR FAIR AND CONSISTENT PRACTICES

Businesses create workplace policies to provide guidance on how to consistently handle workplace situations and manage expectations. Most policies provide direction for employees. Workplace policies help to distinguish appropriate from inappropriate behavior. They also help to maintain order within the business and ensure that its employees are treated fairly and equally.

Businesses do not need to create policies for every possible unanticipated event. Doing so would limit the ability to address individual situations and employee needs as they arise. But businesses do need policies that provide clear guidelines to ensure legal compliance and fair, equal, and consistent practices within the business. For example, business owners should develop policies to create consistency and fair treatment among employees (e.g., paid time off and benefits eligibility). Business owners may also want to create a policy that addresses appropriate employee behavior or conduct (e.g., attendance policy, code of conduct, and social media policy).

As small business owners, you should not only create clear policies but also communicate those policies with employees. You will also likely need to update and revise those policies over time to address the changing workplace and ensure compliance with the law.

Business owners should consult an experienced lawyer in developing these policies. Creating, communicating, and implementing company policies in a fair and consistent manner will help small businesses avoid litigation.

conduct research on people & companies before doing business

While not all legal disputes can be prevented, some can. Consider what hiring people who lack integrity, honesty, competence, and professionalism could do to your business. Or what doing business with less than reputable companies could do.

These types of people and companies could harm not only you or your business but also third parties, such as your customers. This exposes you to even more liability.

Prior to entering an employee or business contract, take your time. Request multiple references from potential candidates and take the time to call those references. Have conversations in a variety of settings with prospective employees, vendors, distributors, etc. Conduct social media searches.

When you are hiring, you will want to make decisions based on what will be best for your business now and in the future. While you may need to hire someone quickly, do your best to hire the right person or business. Such practices will save you time and energy in the long run. Especially if hiring the wrong person or company results in an impending lawsuit.

consider another cost-effective choice: mediation

Complaints against other employees or management in the company will arise. Having a plan for early resolution can prevent these issues from escalating.

Utilizing mediation—versus litigation—is a way for businesses to avoid the costly litigation process and move right to resolving the dispute. Through this process, a mediator works with both parties to manage communication and identify the parties’ real interests. Mediation is a great alternative to consider. Its beauty is found in its low cost, speed, and confidentiality (discussions cannot later be used in court).

main takeaway

Costly litigation can be avoided. Consider these proactive steps to keep your focus on what is important: your business.

This post has been reproduced with the author’s permission. It was originally authored on February 7th, 2022, and can be found here.

Lauren Stahl, at the time of this post, is a rising 3L at Penn State Dickinson Law. She has a B.S. in Biology from Georgetown University. Formerly a medical researcher at the National Institutes of Health and Penn State College of Medicine, Lauren has interests in the intersection of health law and business law. Lauren currently serves as a Comments Editor of the Dickinson Law Review and is a member of the Health Law Society and Women’s Law Caucus. She is also Professor Prince’s Team Lead and the Lead TA for the Legal Writing program.

 

Sources:

https://instituteforlegalreform.com/wp-content/uploads/2020/10/FINAL-Small-Business-Tort-Costs-10.20.20.pdf

https://www.forbes.com/sites/allbusiness/2019/04/21/cash-flow-challenges-facing-small-business-owners/?sh=661c14136561

https://www.sba.gov/sites/default/files/files/rs265tot.pdf

https://legal.thomsonreuters.com/en/insights/articles/small-business-attorneys-handling-more-litigation-in-house

https://www.wolterskluwer.com/en/expert-insights/workplace-rules-for-business-owners-and-employees

https://www.cohenandmalad.com/tips-for-small-businesses-to-avoid-litigation/

https://cuetolawgroup.com/how-to-protect-your-business-from-lawsuit/

https://www.hsolaw.com/blog/how-to-avoid-litigation

Open Banking in the US: What it Means for Entrepreneurs and Small Businesses

By: Anthony Francioso

Open banking technologies allow customers to share their financial data with third parties. Software, known as application programming interface (API), enables apps to access and utilize the requested data. Customers have difficulty switching banks or accessing third-party financial products without open banking capabilities because banks control their customers’ data. When consumers first attempt to link their bank accounts to third-party financial applications, they fail at a 40% rate because major banks often intentionally frustrate the process. Open banking gives customers greater control over their financial information and promotes competition and inclusion in the financial industry. This YouTube video further explains how open banking works.

In the United States, an open banking framework stems from Section 1033 of the Dodd-Frank Act. Section 1033, which became law in 2010, requires financial institutions to provide their customers with their financial data upon request. The law instructs the Consumer Financial Protection Bureau (CFPB) to implement rules and regulations to realize this objective. Until recently, the government has done little to address open banking. However, that has changed recently. In July 2021, President Joe Biden encouraged the CFPB to issue rules related to open banking. The CFPB is expected to issue rules on open banking in the near future.

open banking benefits

Open banking offers several potential benefits to entrepreneurs and small businesses. Open banking can help with lending. Major banks denied 72% of small business loan applications in 2019. Open banking allows entrepreneurs and small business owners easily apply and potentially receive loans. Open banking allows applicants to submit electronic financial information, such as proof of income and payroll data for underwriting purposes. This process is much easier than the traditional loan application, where proof of financial information is difficult to access. Therefore, competition for loans increases while costs are low. Open banking would particularly help entrepreneurs and small businesses with little to no history of credit. Such assistance can promote financial inclusion to traditionally unrepresented entrepreneurs and business owners.

Open banking can also help entrepreneurs and small businesses manage their finances. Small businesses often fail due to a lack of capital. Through open banking, entrepreneurs and small business owners can use cloud accounting to accurately track their finances. Cloud-based accounting lets the user link accounting software with their business bank accounts. Transactions automatically link between sources which save time and prevents manual entry. Open banking similarly helps with forecasting. Poor cash flow is the main reason why small businesses fail. Open banking allows apps to use financial data to make predictions and build scenarios based on the user’s financial data. These open banking abilities help busy entrepreneurs and small business owners save time and focus on things like employees, marketing, and innovation.

open banking risks

When considering open banking technologies, entrepreneurs and small business owners should consider the potential risks. One main concern is data privacy and security. When users share their financial data with a third party, cyberattacks can cause data breaches. Third-party providers also may sell or share customer data with other third parties without the customer’s consent or knowledge. Data breaches and information sharing may lead to undesired third parties having access to the user’s information. Similarly, open banking may cause overexposure to marketing. As more third parties gain access to the user’s financial data, more financial services will want to sell to them. This issue may be particularly relevant to entrepreneurs and small business owners who do not have much of a business background. While open banking helps users find personalized financial products, it could backfire.

Entrepreneurs and small business owners, and their lawyers, should keep in mind the regulations may have growing pains. As the industry evolves and the technology advances, the government, and financial institutions will likely have to refine and update their policies. Since no strict rules are in place yet, only time will tell if the CFPB and other relevant government agencies have accurately assessed the industry.

takeaways

Open banking allows entrepreneurs and small businesses to use their financial data to more efficiently access loans while also optimizing the way they manage their finances. Entrepreneurs and small businesses can reduce the high costs associated with traditional banking services by embracing open banking. Despite the benefits, open banking may pose cybersecurity and privacy risks as strict rules and regulations are still being developed.

Entrepreneurs and small business owners should consider open banking technologies, particularly those more focused on a specific product or innovation and with minor business background. It is important for those who wish to utilize open banking technologies to ensure they are doing business with reputable financial companies to minimize potential security concerns. Therefore, entrepreneurs and small business owners should consult with an attorney who is well-versed in this field. An attorney can help entrepreneurs and small business owners stay informed of the developing laws.

 

This post has been reproduced with the author’s permission. It was originally authored on January 22nd, 2022, and can be found here.

Anthony Francioso, at the time of this post, is a rising third-year student at Penn State Dickinson Law. Anthony is from Hamilton, New Jersey, and a graduate of Dickinson College, where he was a member of the baseball team. He is also an Articles Editor for the Dickinson Law Review.

 

 

Sources:

https://www.bloomberglaw.com/product/blaw/bloomberglawnews/business-and-practice/XB2VJHB0000000?bc=W1siU2VhcmNoICYgQnJvd3NlIiwiaHR0cHM6Ly93d3cuYmxvb21iZXJnbGF3LmNvbS9wcm9kdWN0L2JsYXcvc2VhcmNoL3Jlc3VsdHMvMDRhMjZkN2RjZWQwNmI3NTNhZjBmZDNiOTY3YmVmYTEiXV0–3b60632baa5e21350f083c87842614133067fbb5&bna_news_filter=business-and-practice&criteria_id=04a26d7dced06b753af0fd3b967befa1&search32=59hxEExvwbWRtCHg_J9tXg%3D%3Dw5JR3cQ1JTXIWSGBbbFD9hJG4BRd8z_eiKpqMbGvRVU1W6H8597oJAqca2aL2sEf6-zGUW5XbBJEk40UrVD6L5o8Ejxv8wa69DV6zhBA0f24SnXdZM4cN6NPLWLmMHfc4ecA4Nbx6CKksi1luNcrFuc_q2aquxyWxEkNeYu7WXAIfwuAxBKQTsrszni_aEYkkf_C3l21mPVErgVc348DsdyyjQApbebyiTR830uI6eo%3D

https://www.finextra.com/blogposting/21066/open-banking-for-small-businesses

https://money.usnews.com/banking/articles/what-is-open-banking

https://www.jdsupra.com/legalnews/the-road-ahead-for-open-banking-in-the-7076173/

https://www.jdsupra.com/legalnews/open-banking-navigating-the-emerging-15903/

I am an Entrepreneur: Do I need Employment Practices Liability Insurance (EPLI)?

By: Derek Toone

The short answer, YES. If you hire employees, it is in your best interest to have Employment Practices Liability Insurance. Why? Because Employment Practices Liability Insurance (EPLI) protects employers by covering the cost of certain employment lawsuits. While it may be a part of your Business Owners Policy (BOP), General Liability Policy, or other policy, often it is not. Included in this post are a few suggestions to help further protect your business and employees from the financial burden of employment-related litigation and future claims.

First, Employment Practices Liability Insurance (EPLI) has existed for decades as a risk management tool.[1] Insurance companies began offering “stand-alone” EPLI policies that included both indemnity and defense costs in the early 1990s.[2] During that time, lawsuits and policies ranged from wrongful termination, discrimination, and sexual harassment.[3] Since then, employment-related lawsuits have been on the rise, and the coverage areas EPLI protects have been expanding. For example, in 1992, there were 72,302 charges filed with the U.S. Equal Employment Opportunity Commission (EEOC), but by 2011, that number swelled to 99,947.[4] Moreover, EPLI now protects employers by covering such things as breach of employment contract, wrongful discipline, mismanagement of employee benefit plans, workplace harassment, and wrongful infliction of emotional distress.

Next, while it may seem like large corporations, with scores of employees, are more likely to need EPLI, employers of all sizes can benefit by having EPLI coverage. That is because most EPLI policies protect the employer from more than just claims by full and part-time salaried employees. Some policies go as far as protecting against claims from hourly, seasonal, and temporary employees. This is important because if you hire a third-party “temp help,” you may incur the type of liability EPLI is meant to protect. For example, a temp help agency usually handles hiring, firing, performance, and salary of the temp employee. Yet, if a claim for sexual harassment or discrimination arises between your business and the employee, though the employee works through the temp agency, your business can still be held liable for the cost of litigation. Or, if an employee’s actions negatively impact a customer, in such cases as sexual conduct or discrimination, your business may also be held liable and incur litigation costs. These examples are a few among many that demonstrate when others work for you, EPLI may be needed. So, if you think you are already covered under an existing policy, consider checking again to confirm EPLI coverage.

Finally, there is a bigger problem that lies outside the question of EPLI. An independent study by the EEOC found that “only 30% of employees experiencing harassment on the basis of gender, race, national origin, disability, and other protected classes make internal complaints, and less than 15% file formal charges.”[5]  If the EEOC’s 2011 research of 99,947 were applied to these findings, one can see that the number of filed cases compared to the supposed actual cases is staggering. So, what does this mean for an entrepreneur? To speak candidly, too many workplaces have a problem. Unless you as the entrepreneur have safeguards, it is easy to create a situation, even inadvertently, where an employee could be mistreated and likely have a good claim against you and your business. To help remedy this, some jurisdictions have imposed a legal duty on employers to conduct training on an annual basis. Generally, these trainings are required by law when an organization employs fifty or more employees. You may want to consult with an attorney to determine what is required of you as this law varies state-to-state. Nevertheless, even if your operation is small or just starting out, still consider the benefit of the following list as ways to help mitigate employment-related liability:

      • During the onboarding stage, set clear expectations. State that such things as sexual harassment, a hostile environment, hazing, discrimination, etc. are not allowed to any degree, by anyone within the company. The following is a good resource to consider as you create your Discrimination and Sexual Harassment Policies.
      • Create and provide employees and new hires with access to your company’s policies highlighting these expectations. The following link is a sample Sexual Harassment Policy.
      • Require employees to sign an Acknowledge of Receipt and Understanding of the Policy form once they have read the policy and have been given sufficient time to ask questions about it. Here is a Sample Acknowledge of Receipt for Your Business form.
      • Set future training dates, even if the training is a short presentation, dedicated solely to reminding employees your companies expectation. The following link offers additional resources for Workplace Harassment Training.

In conclusion, an entrepreneur who plans to hire help should heavily consider EPLI coverage—or confirm whether some sort of EPLI coverage is included in their current policy. Protecting the business by using EPLI, however, is only one part of mitigating employment-related liability; it is equally, if not more important, to place safeguards by creating a company policy to further protect your business and employees by preventing misconduct from happening altogether. Both are needed, and the entrepreneur should consider adopting both to mitigate their employment-related liability.

This post has been reproduced with the author’s permission. It was originally authored on February 12, 2022, and can be found here.

Derek Toone, at the time of this post, is a recently graduate from Penn State Dickinson Law. He completed a dual master’s in Human Resources and Business Administration at the Jon M. Huntsman School of Business. Prior to law school, Derek worked in Human Resources at USUHR. He also worked at the Salt Lake County District Attorney’s Office and Goldman Sachs. Derek is passionate about Business and Employment Law and seeks to help Entrepreneurs correctly leverage human capital through lean management and positive group dynamic training.

Sources:

[1], [2], [3] Stephanie D. Gironda & Kimberly W. Geisler, Employment Practices Liability Insurance: A Guide to Policy Provisions and Challenging Issues for Insureds and Plaintiffs, 33 A.B.A. J. LAB. & EMP. L. 55 (2017).

[4] Janet R. Davis & Gary L. Gassman, The Ins and Outs of Employment Practices Liability Insurance Coverage and Claims, 42 BRIEF 23 (2013).

[5] Lily Zheng, Harvard Business Review (2020) Do your Employees Feel Safe Reporting Abuse and Discrimination, available at https://hbr.org/2020/10/do-your-employees-feel-safe-reporting-abuse-and-discrimination.

Additional Sources:

[6] Jeffrey P. Klenk, Emerging Coverage Issues in Employment Practices Liability Insurance: The Industry Perspective on Recent Developments, 21 W. NEW ENG. L. REV. 323 (1999).

[7] Joseph P. Monteleone & Emy Poulad Grotell, Coverage for Employment Practices Liability under Various Policies: Commercial General Liability, Homeowners’, Umbrella, Workers’ Compensation, and Directors’ and Officers’ Liability Policies, 21 W. NEW ENG. L. REV. 249 (1999).

[8] SHRM, Anti-harassment Policy and Complaint Procedure (includes Dating/Consensual Relationship Policy Provision), available at https://www.shrm.org/resourcesandtools/tools-and-samples/policies/pages/cms_000534.aspx

Green Responsibility: Understanding the Regulations Affecting Small Business Owners

By: Lisa Dang

Small business owners must navigate a complex maze of environmental laws. The Environmental Protection Agency (EPA) has issued a number of regulations to oversee and control the impact businesses have on the environment. While businesses must adhere to the EPA’s environmental regulations, these acts are often complex and difficult to understand. To make matters worse, studies have shown that environmental regulations disproportionately burden small businesses and may impose more stringent requirements on new operations.[1]

Regulations to keep in mind while operation your business

Environmental policies and regulations are constantly changing and being updated. It is important to know which regulations can affect your business.

CLEAN WATER ACT

The Clean Water Act (CWA)[2]  regulates the discharge of pollutants into navigable waters in order to restore and maintain the chemical, physical, and biological integrity of U.S waterways. The CWA prevents businesses from emptying wastewater or other pollutants into surface water (e.g., streams, rivers, lakes, reservoirs, wetlands, and creeks) unless they have a permit. However, a limited number of activities are exempt from acquiring permits, such as qualifying farming activities.

If your business requires discharging pollutants (e.g., sewage, solid waste, chemical waste, discarded equipment, and biological materials) into waterways, it is necessary to obtain a National Pollutant Discharge Elimination System (NPDES) permit. The permit can be issued by the EPA or by state government agencies. NPDES permits, if approved, will provide the right to discharge a limited amount of a specified pollutant.

CLEAN AIR ACT

The purpose of the Clean Air Act (CAA) is to reduce emissions that pollute ambient or outdoor air to protect human health and the environment.[3] The specific requirements affecting your business will often depend on 1) how badly your local air is polluted, and 2) the kinds and quantities of pollutants your business emits into the air. It is difficult to populate a single list that details every kind of small business that will be affected by the CAA but you should keep in mind that your business may be subject to one or more controls if your business:

        • Services and repairs motor vehicles or air conditioning systems
        • Performs work involving auto body painting, the degreasing of machinery, and agricultural chemicals
        • Operates a print shop, bakery, or dry cleaners
        • Sells or distributes gasoline, heating oil, or other petroleum products
        • Emits volatile organic compounds and nitrogen oxides in an area where smog has been identified as an air quality problem
HAZARDOUS WASTE REGULATION

Many small businesses may not even be aware that they generate hazardous waste. Almost all retail stores, including grocery or convenience stores, drug stores, and home improvement stores produce hazardous waste. The Resource Conservation and Recovery Act (RCRA) governs the management of hazardous waste.[4] The EPA has established three categories for the disposal of hazardous waste, which depends on how much waste a business generates:

        1. conditionally exempt small quantity generators (CESQG) (produces less than 220 lbs of hazardous waste per month)
        2. small quantity generators (SQG) (produces between 220–2,200 lbs per month)
        3. large quantity generators (LQG) (more than 2,200 lbs per month)

The majority of business owners will probably fall into the first or second category (CESQG or SQG). Similar to small businesses affected by the CAA, waste is typically generated by dry cleaners, construction operations, car repair shops, photo processing shops, and pesticide user/ application services.

   What Counts as Hazardous Waste?

Waste is any solid, liquid, or gas that is either chemically or biologically discarded, burned, incinerated, or recycled. Hazardous waste is classified into three broad categories.

 

        1. Listed waste: often comes from manufacturing processes or commercial product chemical waste. Your waste is considered hazardous if it is on one of the four lists published in the Code of Federal Regulations, 40 CFR Part 261.
        2. Character waste: exhibits characteristics of ignitable waste, corrosive waste, reactive waste, or toxic waste.
        3. Mixed Radiological Wastes: has both a hazardous and a radioactive component.
   Managing and Disposing of Hazardous Waste

First, most small businesses will fall into the SQG category and therefore must obtain an EPA identification number. CESQGs are exempt from this requirement. Second, SQGs are permitted to accumulate the waste on-site for up to 180 days without a permit. Last, SQG may send their waste only to a regulated Treatment Storage and Disposal Facility or recycler. Managing and disposing of hazardous waste may be complicated. Check with your appropriate state authority to ensure you are properly handling, storing, and transporting hazardous waste.

COMPLIANCE AND PENALTIES: HOW TO AVOID VIOLATIONS

The penalties for violating regulatory acts such as the CWA, CAA, and the improper treatment, storage, or disposal of hazardous waste impose a significant financial burden that small businesses might not be able to absorb. Each year, the EPA publishes an annual inflationary increase to the fine amounts for civil penalties assessed under its authority.[5] As of January 12, 2022, the penalty for violations are as follows:

        • Clean Water Act (CWA): $59,973
        • Clean Air Act (CAA): $109,024
        • Resource Conservation and Recovery Act (RCRA, Hazardous waste): $109,024

Over the past decade, the EPA has recognized the burden environmental regulations place on small businesses. The EPA has developed several comprehensive guidelines and has required states to develop assistance programs specifically to address the needs of small businesses to ensure regulatory compliance.[6] Under the RCRA, the EPA provides industry-specific guidance to help with hazardous waste management.

Furthermore, the EPA will eliminate or significantly reduce penalties for small businesses that voluntarily discover violations of environmental law and promptly disclose and correct them under the Small Business Regulatory Enforcement Fairness Act. A business has 21 days from the time it discovers that a violation has, or may have, occurred to disclose the violation in writing to EPA.

conclusion

Understanding and complying with the various environmental regulations that may affect your small business ensures your business will not bear the significant financial burdens imposed by civil penalties. Although the regulations may seem daunting for a small business, following the guidelines set by the EPA or contacting your state’s Small Business Environmental Assistance Program (SBEAP)[7] will help you to meet regulatory compliance.

This post has been reproduced with the author’s permission. It was originally authored on February 7, 2022, and can be found here.

Lisa Dang, at the time of this post, is a rising 3L at Penn State–Dickinson Law. Dang hails from Richmond, Virginia, and graduated from the College of William and Mary with a BS in Neuroscience and Philosophy. Before coming to law school, Dang worked as a Research Assistant in the division of Hematology, Oncology & Palliative Care at Virginia Commonwealth University. Dang has a wide-range of interests and has been exploring many different classes and areas of law. In between work and school, Dang plays competitive Ultimate Frisbee.

Sources:

[1].  https://www.epa.gov/sites/default/files/2014-12/documents/do_environmental_regulations_disproportionately_affect_small_businesses.pdf

[2].  The Clean Water Act, 33 U.S.C. §1251 et seq.

[3].  The Clean Air Act, 42 U.S.C. 7401 et seq.

[4]. Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq.

[5].  https://www.federalregister.gov/documents/2022/01/12/2022-00349/civil-monetary-penalty-inflation-adjustment

[6].  https://www.epa.gov/resources-small-businesses

[7]. https://nationalsbeap.org/states  

Photo Sources:

https://www.uniteammarine.com/clean-water-united-states-u-s-clean-water-act-and-relevant-regulations/

https://www.epa.gov/hw/learn-basics-hazardous-waste

How to Alleviate the Burden of an Essential Employee Getting Called to Military Service

By: Eric Kocsis

For a small business owner, having an employee called up to active duty military service can cause significant issues for their business. In my last blog post, I discussed the Uniformed Services Employment and Reemployment Rights Act (USERRA), which provides significant employment protections for service members who are called into active service. These protections are important rights for service members, but they undoubtedly can create difficulties for small businesses. A large business may be able to temporarily fill the gap that is missing without much notice, but a small business with only few employees will definitely feel that gap–especially if that employee is an essential employee.

The Military Reservist Economic Injury Disaster Loan (MREIDL) seeks to help with this burden.  Unlike most military adjacent small business loans, the borrower does not themselves need to be in the military or a veteran–only to employ a reservist who gets called into active duty.

what is the military reservist emergency injury disaster loan?

The MREIDL is a Small Business Administration emergency injury disaster loan for small businesses who are likely to suffer substantial economic injury as a result of an essential employee being called up to active military duty during a period of conflict. For the purposes of the MREIDL, an employee is essential if they are critical to day-to-day operations of the business based on their managerial or technical expertise.

Losing an employee that is a critical portion of a small business can be devastating and bring uncertainty to the business. Many payment obligations may have been taken on prior to the employee being called up and a small business may be worried about how to pay them. The MREIDL is one way a small business can make sure they stay afloat when faced with an unexpected activation of an essential employee.

The purpose of the MREIDL is to fund ordinary and necessary operating expenses and continue to provide products and services ordinarily produced or provided by the small business. The MREIDL is not for making up lost profits or expanding the business.  If a small business is still able to fund their expenses and continue to provide their products or services, then they are not eligible for the MREIDL. The MREIDL is more of a lifeline to keep small businesses afloat, while allowing them to support the rights of their employees.

what are the terms of the loan?

The MREIDL has a cap of two million dollars, but that cap may be waived if the small business is a major source of employment, is in imminent danger of going out of business, and has reasonably used all available funds to alleviate the economic injury. The MREIDL also has a capped interest rate at 4%, but is adjusted regularly by the SBA. At the time of this post, the interest rate is 2.855%. The SBA will also set the repayment terms based on the ability of the borrower to repay–this can be up to 30 years.

are there any limitations to the mreidl?

The biggest limitation on the MREIDL is that the amount of the loan is limited to the actual amount of the substantial economic injury as a result of an essential employee being called up to active duty. The loan can also not be used to refinance debt prior to the essential employee’s absence, pay any government penalties or fines, repair physical damage, or pay dividends. The MREIDL is designed to prevent a business from suffering, because of the loss of an essential employee to military service. It is not designed to compensate for any unrelated shortcomings or issues that the business may be facing.

Also, collateral is required for loans over $50,000. A small business will not be denied a loan solely for the lack of collateral, if the SBA is reasonably sure that the business can repay the loan and that they business agrees to pledge any available collateral. Collateral may be in the form of liens or other security interest on business property or real estate.

A small business may be ineligible for the MREIDL under various circumstances. Some of these circumstances include: certain felony convictions; the business hired the essential employee after they were notified that a call-up was imminent; or the business is in certain industries, such as agriculture, non-profit work, legal gambling, religious instruction, or political activity.

The MREIDL can be a great lifeline for small businesses, but there are many restrictions that may make it difficult for some businesses. This is because the SBA treats the MREIDL like all other Emergency Injury Disaster Loans and is designed only to assist with injury to the business that is caused by the emergency.

how can a business apply for the mreidl?

To apply for the MREIDL, a business can apply through the SBA’s disaster loan assistance website. Along with a completed application, the business must also provide an IRS Form 4506-C, which allows the SBA to access their tax return information from the IRS. A business can apply for a MREIDL from the date an essential employee gets notice of an expected call-up to one year after the essential employee’s discharge from active duty service.

conclusion

Having an employee getting called to active military service is stressful enough for a small business–especially when that employee may be the heart and soul of an operation. Their service and sacrifice are important and that is why they are protected. The SBA understands this and that is why they offer the Military Reservist Emergency Injury Disaster Loan as a way to mitigate some of the problems that losing an essential employee cause.

This post has been reproduced with the author’s permission. It was originally authored on May 1st, 2022, and can be found here.

Eric Kocsis, at the time of this post, is a 3L at Penn State Dickinson Law and is an officer in the Ohio National Guard. Kocsis wrote this blog to blend those parts of his life and to write about issues that matter to service members and their small businesses.

 

Sources

https://www.sba.gov/funding-programs/disaster-assistance/military-reservist-loan 

https://disasterloanassistance.sba.gov/ela/s/article/Military-Reservists-Economic-Injury-Loans 

https://disasterloanassistance.sba.gov/ela/s/

https://www.law.cornell.edu/cfr/text/13/123.503

https://www.federalregister.gov/documents/2021/10/07/2021-21968/the-entire-united-states-and-us-territories-military-reservist-economic-injury-disaster-loan-program

Photo Sources

https://www.sba.gov 

https://www.startups.com/library/expert-advice/business-loans-for-veterans

“Not another test…..”

By: Bruce Hall

How the EEOC’s guidelines may assist employers with the use of pre-employment tests and assessments….What Are Pre-Employment Assessments & Tests | HireVue

Character and integrity. Two words you keep in mind when looking to hire employees. You strive to ensure that the employees you hire for your business are those whom you can trust. To do so, you attempt to make certain the hiring process is complete with the appropriate assessments and evaluations. Companies worldwide have long implemented pre-employment tests as part of their hiring process. These tests include cognitive tests, physical ability tests, sample job tasks, psychological mental health tests, as well as personality and integrity tests.

Why do companies use pre-employment tests?

Companies implement pre-employment tests for various reasons. The use of these tests may help employers quickly narrow down the number of applicants. These tests also assist employers to determine if the applicant has the requisite skill set for which they are applying. Lastly, if the test is sufficient in gathering the correct data, it will assist the employer with the questions they may use in the formal interview.  While these tests are helpful, they can be replete with discriminatory practices.

Applicable governing laws…

Large corporations often have the funds to outsource this part of the process to companies that specialize in the development, implementation, and operation of these assessments, while small business owners may not. With that, there are governing equal employment opportunity laws that business owners should be made aware of.  Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans with Disability Act of 1990 (“ADA”), and the Age Discrimination in Employment Act of 1967 (“ADEA”) all prohibit the use of discriminatory employment tests and selection procedures. These acts prohibit assessments that discriminate based on race, color, religion, sex, national origin, age, and disability.

General information on discrimination and the governing laws are readily accessible at https://www.eeoc.gov/laws/statutes/index.cfm

How does the EEOC help?

Let’s break it down…

Fortunately, the U.S. Equal Employment Opportunity Commission (“EEOC”) has put together a list of the best practices for employers wanting to implement these tests and assessments in their selection process. Let’s break them down.

      • The EEOC suggests administering tests and other selection procedures without regard to race, color, national origin, sex, religion, age (40 or older), or disability.

The anti-discrimination laws have created protections for people that may be discriminated against based on these characteristics.

      • Employers should ensure that employment tests and other selection procedures are properly validated for the positions and purposes for which they are used. The test or selection procedure must be job-related, and its results appropriate for the employer’s purpose. While a test vendor’s documentation supporting the validity of a test may be helpful, the employer is still responsible for ensuring that its tests are valid under the EEOC’s Uniform Guidelines on Employee Selection Procedures (“UGESP”).

When deciding to use these tests, it is your job as the employer to determine that these tests are related to the function of the position in which the applicant is applying.

      • If a selection procedure screens out a protected group, the employer should determine whether there is an equally effective alternative selection procedure that has a less adverse impact and, if so, adopt the alternative procedure. For example, if the selection procedure is a test, the employer should determine whether another test would predict job performance but not disproportionately exclude the protected group.

The EEOC gives a great example here. If the test creates inequality among a protected group, an equally effective alternative should be implemented.

      • To ensure that a test or selection procedure remains predictive of success in a job, employers should keep abreast of changes in job requirements and should update the test specifications or selection procedures accordingly.

When these tests are part of your hiring process, remain diligent in your efforts to verify that the tests are still adequate in finding the best person for the job.

      • Employers should ensure that tests and selection procedures are not adopted casually by managers who know little about these processes. A test or selection procedure can be an effective management tool, but no test or selection procedure should be implemented without understanding its effectiveness and limitations for the organization, its appropriateness for a specific job, and whether it can be appropriately administered and scored.

Simply put, test your tests. Ensure that the tests and assessments are thoroughly related to the functions of the position in which the applicant is applying.

One of the primary goals of the EEOC guidelines is to ensure that employers are adhering to the governing law. These laws prohibit discrimination, disparate treatment, and disparate impact. Disparate treatment is intentional discrimination while the disparate impact is the disproportionate effect on a protected class. Yes, these tests and assessments may be meaningful in the hiring process but as a small business owner, it’s important to take the necessary precautions to ensure adherence with the law.

This post has been reproduced with the author’s permission. It was originally authored on February 10, 2022, and can be found here.

Bruce Hall, at the time of this post, is a third-year law student at Penn State Dickinson Law. An alumnus of SUNY College at Old Westbury, Bruce is a native New Yorker. Prior to law school, Bruce worked as a litigation paralegal specializing in commercial litigation and toxic torts. Upon graduation, Bruce intends to pursue a career in transactional law and legal compliance.

 

Sources:

https://www.indeed.com/career-advice/career-development/types-of-pre-employment-testing

https://www.eeoc.gov/laws/guidance/employment-tests-and-selection-procedures

https://www.indeed.com/career-advice/career-development/skills-assessment-test

Photo Sources:

https://www.hirevue.com/blog/hiring/assessment_overview

https://www.zuckermanlaw.com/tag/anti-discrimination-laws/

How The Law Tips The Scales Against Restaurant Employees

By: Cameron Crowe

As the world continues to adapt to the seismic shifts the coronavirus pandemic has caused in society, many small business owners are exploring new ways of operating and retaining employees. One of the most significant areas of concern for any business owner is finding employees willing to work for sub-par wages. As a result, the past few years have seen dramatic growth in political and grassroots movements looking to advance workers’ rights and secure fair pay for their labor.

Recent years have seen subscriptions to the subreddit “/r/antiwork” skyrocket from around 10,000 members in 2019 to over 1.7 million members as of February 2022. Another popular movement, known as “The Great Resignation,” has also hit businesses of all sizes with labor shortages, sometimes resulting in dramatically reduced operating hours or complete closure. Restaurants, in particular, have experienced some of the greatest struggles in finding and retaining employees. In October 2021, the U.S. Bureau of Labor Statistics reported that foodservice workers’ “quit rates” had risen to 6.8%, well above the 20-year average of 4.1%. In addition, according to a survey produced by PricewaterhouseCoopers, 65% of employees indicated they are actively looking for a new job, and 88% of executives admitted their company is experiencing higher-than-normal turnover rates.

Legislative Inaction & Legal Poverty Wages

The driving factor among these worker’s rights movements is a demand for better pay that at least approaches a “living wage.” The living wage is a theoretical minimum income standard that, when met, provides employees with the resources to afford a satisfactory standard of living. It is the minimum amount required to avoid falling into poverty. After all, this was the original intent behind establishing a minimum wage under the Fair Labor Standards Act in 1938, designed to provide enough income to afford a living wage. A proper living wage in 2022 would be well above the federal minimum wage requirements set out in the Fair Labors Standards Act. The FLSA currently sets the minimum wage at $7.25 as of July 24, 2009, which would earn a full-time worker just $26,200. It is estimated that a full-time worker in Pennsylvania would need to earn around $50,000, nearly double the minimum wage standard provides, to avoid poverty. While some states have enacted laws providing a higher minimum wage than the federal standard, Pennsylvania currently sets its minimum wage in line with the federal government at $7.25.

Exacerbating these problems is the fact that servers, under what is known as the “tip credit system,” are legally permitted to be paid less than the minimum wage so long as their tips each shift allows them to technically meet or exceed the state or federal minimum wage requirement that applies. A “tipped” employee is anyone who makes more than $30 per shift in tips. Assuming they meet tip minimums, the actual wage paid by owners to servers by law in Pennsylvania is a mere $2.83. This system also leaves tipped employees especially vulnerable to “wage theft” by employers because it requires employers to keep a two-tiered hourly wage system. The law says that tipped employees’ should be paid the full wage for any work done that is “untipped work,” such as sweeping, mopping, and other custodial tasks. Managing a two-tiered time management system like this leaves considerable room for wage theft, intentional or not.

Despite popular movements demanding fair pay, there does not seem to be any real engagement by State or Federal lawmakers to address the situation by raising the minimum wage to an acceptable standard. This places the impetus on business owners to figure out new methods of attracting and retaining employees who feel that the current system of wages subsidizing low wages by tipping customers is forcing them to work for poverty wages. As a method of income, tipping is also unreliable, inconsistent, and heavily dependent on a steady flow of customers. This leaves even full-time servers in a state of stress and uncertainty over whether their job can provide them with enough subsistence to survive.

Experimenting With The Model

In light of this, some business owners have begun exploring alternative business models that don’t rely on customer tips for server wages. One potential model that has emerged is a “no-tip” system that provides a consistent hourly wage to all staff members. For example, Scratch & Co., a restaurant in the Pittsburgh area owned by Don Mahaney, has used the Covid crisis to embrace a model that provides more security and flexibility for his staff by doing away with tipping entirely. Instead, he offers employees a steady, livable wage.

Another Pittsburgh-based restaurant, Bar Marco, has been using the “no-tip” model since 2015 to great success. Within a month of implementing the system, revenues rose and overhead costs dropped significantly. Bar Marco takes this system one step further, providing its employees with a base salary, health care coverage, and 500 shares in the business. Giving employees equity in the company has increased employee awareness and investment. Being equity owners in the restaurant means any time they save the restaurant money by being more efficient or less wasteful, which directly improves their bottom line. Of course, implementing a system like this required other significant changes to balance costs, including retooling the menu to accommodate cheaper local ingredients and slightly smaller portion sizes. Nevertheless, weekly profits soon tripled from $3,000 to $9,000 profit each week, allowing the owners to pay out bonuses to the staff on top of their salaries.

Pre-pandemic, some owners had already been experimenting with these innovative business plans, but the trend has never quite caught on. While there are examples of failure and restaurants rolling back their policies to a more traditional tip-based system, that is to be expected with a paradigm shift this significant. Experimentation is the mother of invention, after all. Finding new ways to strike a balance between owner profits and employee satisfaction will continue to be a priority for workers in the future, and owners who want to retain great employees should explore these new options. Perhaps now is the perfect time for these business models to succeed.

This post has been reproduced with the author’s permission. It was originally authored on February 1, 2022, and can be found here.

Cameron Crowe, at the time of this post, is a third-year student at Penn State Dickinson Law in Carlisle, PA. Before coming to law school he worked for many years as a licensed real estate professional in the Pittsburgh area. His focus in law school has been on corporate and entrepreneurship issues with an aim to work in the business transactions sector of law after graduation. Cameron is also interested in mergers & acquisitions and energy law & policy. He has a passion for public service and recently interned at the YWCA Harrisburg Violence Intervention and Independence Blue Cross in Philadelphia, PA. He is currently interning at the Pennsylvania Office of Attorney General in the Healthcare Division.

Sources:

Livable Wage by State 2022 (worldpopulationreview.com)

Minimum Wage | U.S. Department of Labor (dol.gov)

Future of work: PwC

Great Resignation – Wikipedia

Antiwork: Unemployment for all, not just the rich! (reddit.com)

How Scratch & Co. Is Embracing Flexibility | Pittsburgh Magazine

Minimum Wage: Definition, History, Pros, Cons, Purpose (thebalance.com)

How a No-Tipping Policy Helped This Restaurant Triple Profits in 2 Months (entrepreneur.com)

Is there a no-tipping backslide among Pittsburgh restaurants? | Pittsburgh Post-Gazette

Can Employers Pay Tipped Workers Less Than Minimum Wage? (shrm.org)

How Restaurants Get Away With Stealing Millions From Workers Every Year – Eater

BJ’s Restaurants Workers Paid Just $2.13 Per Hour Doing Untipped Work, Class Action Alleges – Top Class Actions

Photos:

What Is Tip Credit? Here’s What You Need to Know. | SevenRooms

Outschool for Employers | Equality versus equity in employee benefits

24,813 Restaurant Server Illustrations & Clip Art – iStock (istockphoto.com)

Valerie Ross | Featured Entrepreneur | 2022

By: Schenley Kent

Valerie Ross is the owner and operator of Inertia Massage & Spa located in Harrisburg, Pennsylvania. Inertia Massage & Spa is a full-service spa that offers massage therapy, facials, and other therapeutic services.

Valerie has been a massage therapist for 22 years. For several years she was an adjunct massage therapy instructor at Harrisburg Area Community College. She is certified in five massage modalities and specializes in Thai massage, therapeutic, and deep tissue massage. Valerie has been a small business owner since 2008 and her business is thriving and growing despite the uncertainties of the COVID-19 global pandemic.

COVID-19 and its subsequent variants have ravaged several small businesses that have been in operations for decades; however, the pandemic has revitalized Inertia Massage & Spa. Valerie credits her small business’s success in weathering the tumultuous past 23 months to people’s increased interest in developing and maintaining healthy self-care habits.

“This is a very stressful and uncertain period we are currently living in. There is a global pandemic that does not seem to have an end in sight. People have to balance their work and their family obligations. People are struggling in many ways and looking to many different avenues of self-care to maintain their peace of mind.”

The road to “peace of mind” has increased foot traffic and the book of business at Inertia Massage & Spa. The uptick in new customers has been a welcome addition and has helped recover some of the business’s losses from the early days of the pandemic when the government mandated that all non-essential businesses must shut down for 14 days to slow the spread of COVID-19. Valerie says that it was a terrifying and uncertain time during this period. To bring in some revenue while the business was closed, the Spa sold gift cards to their established clientele that could be used for future services. This strategy helped to ease the financial burden of being closed, but it was no replacement for not operating at normal capacity. During the initial days of the pandemic, Valerie did lose some long-term clients who did not feel comfortable returning to the Spa. However, losing these clients has not slowed down the business because of the influx of new clients utilizing the Spa’s services.

In addition to providing massage therapy and esthetician services herself at Inertia Massage & Spa, Valerie also has other massage therapists who offer services at the Spa.

When asked about any staffing challenges she’s facing due to labor shortages, Valerie says, “now is a challenging time to hire massage therapists because the practitioners are in such high demand. I haven’t had much luck hiring additional staff because it is difficult to compete with larger spas or chains that have the ability to offer tuition reimbursement as an incentive to come to work for them. Unfortunately, this isn’t an option for me as an independent business owner. Recruiting new therapists is an ongoing challenge. As a result, I have had to decline some business because the demand is greater than what we can meet.”

Valerie’s advice to those who want to become entrepreneurs is, “Just Do It!” She says that you shouldn’t be scared, and never give doubt any space; otherwise, you may not take that leap of faith and go into business for yourself.

Website: https://massageharrisburgpa.com

Social Media: @InertiaMassage on Twitter, Facebook, and Instagram.

Schenley Kent, at the time of this blog, is a second-year law student at Penn State Dickinson Law School. She is interested in pursuing a career in employment law post-graduation. Schenley currently works as a law clerk at McNees Wallace & Nurick in the firm’s Harrisburg office.

Stefan Hawkins | Featured Entrepreneur | 2022

By: Kayla M. Duhaney

Stefan Hawkins, the “Good Brotha,” went viral with a post on LinkedIn about his coffee brand “Fifth Acres Coffee” in 2021. After less than twenty-four hours on LinkedIn, Hawkins’ coffee post captured over 1,300 likes, comments, and shares. Fifth Acres Coffee, LLC, is the first Black-owned coffee brand originating in Central Pennsylvania, featured, and sold in the “Good Brotha’s Book Café,” the first Black-owned coffee shop in Harrisburg, both of which are owned and operated by Stefan. The LinkedIn post that marked the start of his rising publicity shared an announcement with his community: “My coffee is available for purchase at Karn’s Food Store. Today is one for the history books, being the only Black-owned coffee brand in Central Pennsylvania and being the first Black-owned coffee brand to secure placement in a major grocery store in Central Pennsylvania. We at Fifth Acres Coffee, LLC, made history today and I can’t be prouder. We did it.”

Stefan Hawkins is a Harrisburg, Pennsylvania native. In fact, the brand name and concept “Fifth Acres” pays homage to the city that created him. He was born and raised on North “Fifth” Street in South Harrisburg, locally referred to as South “Acres.” The coffee beans are sourced in African countries, and the roast variations are given geographic names such as, “Uptown blend” and “Southside blend” to align with the geographical theme of the brand. A percentage of the profit is donated to local non-profit organizations.

Stefan’s entrepreneurial spirit is new to us, but he is in familiar territory with earning many “first” achievements for the city of Harrisburg. He founded House of Vegans, CFC, the first Black vegan restaurant in the city which opened a year prior to Good Brotha’s Cafe. Stefan is also a freelance journalist part-time, writing for Harrisburg Magazine and Penn Live. He is a son, a father of five, and a pillar to the youth in his community.

Why Coffee?

In the summer of 2020, after the murder of George Floyd, there was an outcry in Harrisburg and similarly situated cities across the country to create more Black-owned spaces. Stefan, at the time working two jobs, took the opportunity to fulfill a need in his community. He started out making food on a George Foreman grill in his apartment and sold it on the weekend as a way to make some extra cash. Eventually, he saved enough money to open House of Vegans. The city of Harrisburg has a Black population of fifty-two percent; however, Black people only make up less than three percent of business owners in the city. Stefan saw a need for Black business ownership, and he invested in addressing it. The opening of House of Vegans was initially a huge success for Stefan and his family. Patrons lined up for blocks for more than six hours on a hot, grand opening day in the middle of July. Support from the community came pouring in but the restaurant became increasingly difficult to maintain due to the pandemic and other life-work obligations.

“I learned very quickly that there’s a difference between writing the check and issuing the check. The transition from employee to employer has definitely been a culture shock.”

He came, he saw, and unfortunately, he stumbled. House of Vegans  struggled due to COVID-19 and while it is closed currently, Stefan hopes to re-open sometime.

Shortly after the House of Vegans’ opening, the owners of a bakery across the street decided to move. Stefan was familiar with the owner with whom he held a short, life-changing conversation in a few words, “you should open a coffee shop,” she said. “Coffee? I’ve never poured a cup of coffee in my life,” he responded. He walked out thinking, “Hm, I should open a coffee shop.” Folks, that is all it took to spark the coffee connoisseur we have in front of us today. Not only did Stefan open his own coffee shop, but after some sourcing difficulties, he sourced, created, and marketed his own coffee brand.

“After doing some research and listening to business owners of all kinds, I have learned the importance of ownership.” When Stefan gets asked, “why coffee?” His response is often, “why not?” He saw a need and addressed it. His entrepreneurial spirit turned a hustle into his passion. He says, “this is both a hustle and a business for me. This is about longevity. I want to be the next Howard Schultz.” Howard Schultz is most famously known for being the chief executive officer of Starbucks but is also an author.

“This is my purpose; I’m trying to motivate my people. We need more black spaces. This coffee brand is about inspiring my city. I want to make an impression and impact. A good cup of coffee could change the way you approach your whole day.”

The Vision

“Nobody sees your vision like the way you see your vision,” Stefan spoke about working endlessly and tirelessly for months to facilitate a good coffee shop experience for his customers. Good Brotha’s Café has a cozy, “dark-themed” bookstore vibe featuring local Black artists’ paintings of men and women on the walls, a giant bookshelf filled with books for customers to read at their leisure, and pastries to go with the perfect cup of coffee.

“I’m the boss, customer service, operations manager, and employee – all wrapped in one. Experience was my teacher.” Fifth Acres Coffee transcends the four corners of Good Brotha’s café, which keeps Stefan’s wheels turning as he makes delivery drop-offs to supermarkets, does his own labeling, and coordinates how to be in several places at once.

Sacrifices

When asked what his largest sacrifices were, Stefan responded: “My sanity. In a good way though, because I want to put forth the best product, the best services, and the best business practices.”

When I asked Stefan about balancing his coffee shop and brand, he responded, “I got overwhelmed. Once Fifth Acres went viral, it became a stumbling block because I did not have a team.” He touched on a misconception that he was confronted with by many people, “most people think because you own your own business, you have the freedom to do what you want. Unfortunately, that could not be more wrong.” Working for four months straight from dawn to dusk has been a challenge. Stefan explains, “the workday does not stop; I just find a way to fit everybody else in.”

“When you’re growing a business, there’s no such thing as a day off. This is my legacy; I need to make sure this is successful.”

Mental health matters too though, “You can’t lose yourself along this journey. I keep asking myself: What’s the purpose? What’s driving me?”

As a Black entrepreneur, self-taught business owner, and community figure – “the scrutiny is there.” Stefan is very aware of having to watch the way he does business for the sake of his business and his image. He has worked at various fast-food restaurants and is very familiar with fast food industries, however, owning and operating his brand as a community figure has forced him to take a step back from online sales, recoup, and potentially revamp his website soon.

Good Brotha, Good Trouble

Is all press, good press? Thankfully, Stefan is constantly featured on the news for being a “good brotha” which sparked the name for his café. His claim to fame was rapid, but he appreciates the opportunity to represent Black men on the news for positive reasons: entrepreneurship, literacy, and pushing education. “This is my legacy. This is what I want to build. All I need is the people’s support.” Good Brotha’s Cafe is looking to incrementally expand into areas that are not traditionally Black. He explained it’s hard to be the first because “you’ll walk into rooms alone, not knowing what you’re walking into.” With a longtime passion for culinary arts since high school, Stefan simply wanted to find his niche within the food industry but needed to work odd jobs to get there. Finally, he has risen to the top causing a stir in his community as a young businessman, employing high school children to keep them out of trouble and advocating for higher literacy rates among Black men in his community. As a person who did not pursue any formal higher education, Stefan had to find his place. Fifth Acres Coffee is his way forward.

“This is bigger than me. I have to understand that I have a duty to keep this business model solid because I have the city on my back. I am the first Black man to make history in several business aspects within the city of Harrisburg, my city. Knowing that, I hope to inspire the next generation to fall in line without having to suffer for this generation’s mistakes.”

The Next Generation

“It takes dedication, consistency, and hard work. Most people don’t see what it takes, but I also don’t look for an applause. This is about the grind. This is about my drive to see my business succeed.” Be teachable. Learn from the mistakes of others. Stefan emphasizes the importance of formal education but also learning through practice.

    1. Be a student.
    2. Chin up. You cannot lose yourself. Keep going.
    3. Money does not always win.
    4. Invest in your vision, in every aspect.
    5. Make sure your purpose motivates you.

Fifth Acres Coffee is Black and blossoming. Stefan wants to stay in Harrisburg, give back, and help bring his community forward one cup of coffee at a time.

He inspires now and will continue to inspire!

Follow Good Brotha’s Book Cafe on social media: Facebook

Instagram

Twitter: @goodbrothasbook

Kayla Duhaney, at the time of this post, is a second-year law student at Penn State Dickinson Law. She is from Mount Vernon, New York, and is a graduate of George Mason University located in Virginia. Kayla is the Vice President of the Black Law Student’s Association and a Dickinson Law Lion Ambassador. She plans to take her education and talents back to New York City post-graduation.