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Five ways to make your craft brewery employment practices more attractive to investors

January 7, 2019Stephanie Loughner

Distribution contract law
Step 1: Fancy pens.

If your brewery is on the hunt for business opportunities for growth, increased working capital decisions or even investors, it is time to do a gut check on employment practices that will be exposed when an opportunity comes knocking. Banks and investors are looking for clean, compliant and well-documented practices that will not give them or the business headaches affecting the investment. Here are five ways to audit and improve employment practices to make them attractive to capital partners.

1. Designate a human resources representative.

Depending on the size of the business and growth stage, many breweries will have founders or executives wearing many hats, including a human resources hat. Every employee should know who wears that hat. With a clear designation and written duties of the human resources representative, these basic employment practices will show a capital partner that employee relations, compliance and management are a priority.

2. Have written policies and procedures.

Every capital partner is looking at the basic competencies of its investment. A well-written employment handbook with anti-discrimination, vacation and other important policies is an absolute must to set the tone and expectations of a brewer’s workforce. Whether you are considering OSHA requirements or liquor enforcement considerations, it is important to reflect those policies and distribute them to employees to protect the business.

Continuing education: Check out our three-part series on craft brewery employee compensation

3. Employment agreements, employee offer letters, stock ownership agreements, nondisclosure and noncompete agreements should be polished and complete.

A capital partner needs to know what obligations the brewer has to its workforce with regard to pay, benefits and stock or other equity ownership. Any investor will also want to make sure a brewer has appropriate and sufficient protection of its intellectual property rights and confidential information. These documents should be consistent, thorough and complete without loose ends to worry the investor.

4. Internal investigations and employment claims should be well-documented.

Regardless of whether such investigations or reviews resulted in finding of wrongdoing, investors will request copies of any documents related to any internal investigation or review by the brewer, including any documents related to any actual or alleged misconduct by an employee, consultant, sales representative, distributor or other representative of the brewer. These types of documents are an opportunity to point out to a capital investor the time and attention that has been spent addressing such issues to minimize exposure and liability.

Is an ESOP right for your craft brewery? Here’s a handy checklist

5. Audit for uniformity in employment practices.

In the wake of the #MeToo and Time’s Up movements, employers need to periodically audit their employment practices to ensure equality in the application and hiring practices, equal pay and nondiscriminatory disciplinary practices. Brewers can conduct workplace climate surveys, hold training workshops for midlevel and senior supervisors and have strategies in place making anti-harassment a priority in a company’s strategy. These periodic reviews will, again, show how a brewer has made its own investment into its biggest asset: its employees.

Implementing these five steps can set your brewery up for future success when looking for investor opportunities. By setting in place employment practices that improve your business today, you will see long-term payoff through partnership opportunities in the future.

Stephanie Loughner is a member of the firm’s Brewing and Distilling Group and focuses her practice on helping clients with their day-to-day employment management and struggles.

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