• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Advertise
  • About Craft Brewing Business

Craft Brewing Business

Professional Insight, Unfiltered

  • News
  • Business & Marketing
  • Ingredients & Supplies
  • Packaging & Distribution
  • Equipment
  • Webinars & White Papers
  • COVID-19

Five business-minded tips to avoid brewing up a lawsuit

September 3, 2015Joseph Gagnon

Five tips to avoid lawsuit brewery legal
Let’s hope Lady Justice doesn’t have to use that sword. Follow these five tips and you could minimize your risk of ending up on the wrong end of a lawsuit.

It’s an exciting time for the craft brewing industry. Favorable legislation has allowed breweries to increase production and create jobs. With expanding payrolls, however, comes a compliance obligation. Employment laws at the federal, state, and local level can often be confusing and sometimes seem contradictory. With careful planning and consideration, however, compliance is manageable. To avoid seeing your investment, hard work and passion go down the drain, consider these five common potential pitfalls.

1. Keep your recipes bottled up.

After countless trial and error, that recipe you developed for a knockout Double IPA isn’t just a potential award winner, it’s a trade secret. Treat it that way. Limit access to recipes and ensure that anyone who has access to them signs enforceable confidentiality, non-disclosure, non-recruiting and assignment of inventions agreements at the time of hire. That way, if someone misappropriates your proprietary information, you can take action.

2. Don’t mislabel employees as independent contractors.

Misclassification of employees as independent contractors can impose devastating costs. Worse, the Department of Labor (DOL) has recently announced an initiative to actively seek out instances of misclassification. The DOL’s new guidance essentially declares war on the independent contractor classification by significantly narrowing the qualifications for independent contractor status under an “economic realities” test. Be absolutely certain that anyone classified as an independent contractor – even someone who prefers to be classified in this manner – meets the DOL’s guidance.

3. Don’t underserve your employees: the overtime debate.

A common mistake many employers make is the assumption that paying an employee a salary makes him or her exempt from the overtime pay requirements of the Fair Labor Standards Act (FLSA). In reality, many overtime exemptions also carry a duties requirement that focuses on the employee’s core job responsibilities. Job title is irrelevant. Review all claims of exemption to make sure the employees at issue meet not only the minimum salary requirement but also the duties requirement.

Head over to our Business and Marketing content hub for even more in-depth business insight. Click here.

Also, keep in mind that the DOL has proposed rule changes that will increase the minimum salary requirement for administrative, professional, and executive exemptions (i.e. the so-called “white collar” exemptions) from a minimum of $455 per week, or $23,660 annually, to $970 per week, or $50,440 annually. Assuming these proposed rules take effect, anyone for whom these exemptions are claimed will need to earn at least the new minimum salary, or otherwise be reclassified as non-exempt and paid for overtime worked. If you must reclassify employees as non-exempt, there are options that could help you stay compliant yet reduce costs, such as implementing a fluctuating workweek.

4. Nobody works just for beer.

If you have a tasting room, or if you showcase your beers at a release party or some other event, keep in mind that volunteers who agree to help out are performing compensable work under the FLSA. To avoid a wage-hour lawsuit or scrutiny from the DOL, be certain to pay everyone who performs work for your brewery at least the minimum wage.

5. Filter potential candidates and avoid hiring a lawsuit waiting to happen.

It goes without saying, yet it often happens: A casual hiring process can lead to questionable employment decisions and problematic employees. Don’t hire the “walking lawsuit.” Instead, use a detailed and legally compliant employment application and review it for red flags. Conduct in-person interviews and ask meaningful questions. Always check references. Don’t just hire a warm body. It’s a better idea to leave a position open until you find the right candidate.

Joseph GagnonJoseph W. Gagnon is a partner of the Houston office of Fisher & Phillips LLP, a national labor and employment law firm representing management. He has extensive experience advising and defending employers in all phases of labor and employment matters, including defense of lawsuits across the state, matters before the DOL, and preventive auditing and planning that reduces the employer’s legal risks and liabilities in work-related matters. You can reach Joe at [email protected].

op-ed
COVID-19 and craft beer: This op-ed from 3 Daughters Brewing CEO Mike Harting to our elected officials says it all
TTB Permits online user
Permit limbo: The government shutdown has put the federal brewery permitting process on hold
bartender employee beer pour tulip glasses
Here’s how craft breweries can comply with updated California labor and employment laws in 2019
beer store fridge shelves distribution beer store supermarket
Properly licensed Colorado grocers, convenience stores and gas stations can finally sell full strength beer

Reader Interactions

Comments

  1. KCHopTalk says

    September 7, 2015 at 5:16 pm

    Five business-minded tips to avoid brewing up a lawsuit http://t.co/YOE6okBY03

    Log in to Reply
  2. Todd Parker says

    September 5, 2015 at 5:21 pm

    Todd Parker liked this on Facebook.

    Log in to Reply
  3. Serge Lubomudrov says

    September 5, 2015 at 5:21 pm

    Serge Lubomudrov liked this on Facebook.

    Log in to Reply
  4. South Carolina Attorneys At Law says

    September 4, 2015 at 5:21 pm

    South Carolina Attorneys At Law liked this on Facebook.

    Log in to Reply
  5. BeallBreweryIns says

    September 4, 2015 at 11:31 am

    5 pointers to keep your #CraftBrewery on the business level: http://t.co/spE38ExuzW via @craftbrewingbiz

    Log in to Reply
  6. JosephWGagnon says

    September 4, 2015 at 8:38 am

    Five business-minded tips to avoid brewing up a lawsuit http://t.co/GLAYN2M7FP via @craftbrewingbiz

    Log in to Reply
  7. Blake's Hard Cider Co. says

    September 3, 2015 at 4:51 pm

    Blake’s Hard Cider Co. liked this on Facebook.

    Log in to Reply
  8. Mike Bernstein says

    September 3, 2015 at 2:51 pm

    Mike Bernstein liked this on Facebook.

    Log in to Reply
  9. LVRGLLC says

    September 3, 2015 at 2:18 pm

    #CraftBeer #CraftBrewing #Beer #BeerBiz Five business-minded tips to avoid brewing up a lawsuit http://t.co/341VJgnq07

    Log in to Reply
  10. Jeff Platt says

    September 3, 2015 at 12:51 pm

    Jeff Platt liked this on Facebook.

    Log in to Reply
  11. debdobson says

    September 3, 2015 at 12:35 pm

    RT @CraftBrewingBiz: Five business-minded tips to avoid brewing up a lawsuit: http://t.co/wVwiB7NPXS Legal insight from @labor_attorneys.

    Log in to Reply

Trackbacks

  1. Prevent Lawsuits from Starting in Your Brewery | Insurance & Financial Services says:
    January 18, 2018 at 11:10 am

    […] Limit access to recipes and ensure that anyone who has access to them signs enforceable confidentiality, non-disclosure, non-recruiting and assignment of inventions agreements at the time of hire. That way, if someone misappropriates your proprietary information, you can take action, recommends Craft Brewing Business. […]

    Log in to Reply

Leave a Reply Cancel reply

You must be logged in to post a comment.

Primary Sidebar

Latest News

  • Beer rebrands continue: Ballast Point, Fremont, New Glory and Blue Point (also, enjoy some tips for your refresh)
  • Colorado Strong launches public awareness campaign to help independent breweries
  • Here’s a video recap of 2020 from Deep Ellum Brewing, complete with dubstep score
  • Malt maker Rahr purchases all of eco energy maker Koda

Sign up for our newsletter

unsubscribe from list

Most Popular Today

Recent Features

  • Beer rebrands continue: Ballast Point, Fremont, New Glory and Blue Point (also, enjoy some tips for your refresh)
    January 21, 2021
  • virginia-beer-co-renovationHow Virginia Beer Co. used the shutdown to overhaul its facility (and keep people employed)
    January 19, 2021
  • Clean air, clean beer: New Ingersoll Rand oil-less reciprocating air compressors are ideal for breweries (aeration to canning)
    January 18, 2021
  • Non-alcoholic beer brand Athletic Brewing closes $17M+ in funding with famous backers, selects Crafted ERP, eyes big growth
    January 18, 2021
  • Watch: This awareness video on human trafficking from beer wholesaler Markstein Sales will move you to action
    January 14, 2021
  • Distribution updates: Massachusetts brewers celebrate franchise reform, Yuengling goes to Texas with Molson Coors and more from Bell’s, Stone and beyond
    January 14, 2021

Footer

  • Email Newsletter Sign Up
  • About Craft Brewing Business
  • Contact Us
  • Advertise on Craft Brewing Business
  • Media Kit Download
  • Privacy and Terms

© 2021 · CBB Media LLC

Continue ...

sponsored by