By Jason Jordan
For the Oregon Beer Growler
A bartender is legally liable for serving alcohol to a patron who becomes intoxicated and then injures a third party. Does a business face similar exposure when it hosts a social event where alcohol is served, such as an open house or employee picnic?
According to the Insurance Information Institute, liquor liability exposure is not limited to those whose primary business is the sale of alcoholic beverages. Most states currently have social host statutes or common law that holds private event hosts liable for the actions of their guests. You are considered a social host if you provide alcohol to individuals in a non-commercial manner. It is important to know the law in your jurisdiction and to take the appropriate steps to control your risk.
Create a Risk-Management Program
An important first step in limiting your liquor liability is to implement a risk-management program. The liquor liability program must have the support of management, be communicated to supervisors and employees and include a policy advising employees to drink responsibly at company events.
The program should describe the procedures for handling intoxicated guests. This includes delegating who will assess the situation, such as hotel security or someone from your organization, and outlining appropriate actions for dealing with or removing a guest who has overindulged.
In the Event of an Incident
If an incident occurs, fill out a liquor liability incident report documenting measures taken to control the intoxicated person. This helps your defense in the event of an alcohol-related accident.
In addition to proper liquor liability planning and education, review your company’s current general liability insurance policy to determine your coverage in social-host situations.
Remember, even with the proper coverage, a liquor liability policy does not eliminate your exposure if alcohol service is in violation of a statute or a minor/intoxicated person is served.
It’s also important to have a program in place that includes the following recommendations when working with third-party vendors:
· When working with a vendor, such as a caterer or bartender, verify they are licensed and insured.
· Stipulate in your vendor’s contract that only those who have received alcohol-awareness training should serve or sell alcohol at your event.
· Require the vendor to provide a certificate of liability insurance to include liquor liability coverage naming your company as additional insured.
Promoting Safety and Sobriety at Company-Sponsored Events
To promote the safety and sobriety of your employees and guests at company-sponsored events, review the following recommended control measures:
· Serve drinks to guests rather than offering a self-serve bar.
· Set up bar stations instead of having servers circulating the room; if offered, people are inclined to accept drinks they wouldn’t have otherwise ordered.
· Place table tents at each bar reminding employees and guests to drink responsibly.
· Don’t price alcohol too low, as it encourages over-consumption.
· Offer a range of low-alcohol and alcohol-free drinks at no charge.
· Require servers to measure spirits.
· Always serve food with alcohol.
· Close the bar an hour before the scheduled end of the party.
· Do not offer a “last call,” as this promotes rapid consumption.
· Never raffle alcohol or hold contests that involve buying or drinking alcohol.
· Entice guests to take advantage of safe transportation options by subsidizing taxis or promoting a designated driver program.
· If your event includes a program or speaker, schedule it after dinner and drinks are served. This allows additional time for alcohol to wear off.
Before your company hosts its next event, contact Propel Insurance. We can review your coverage and assist in developing a risk-management plan that keeps safety at the center of your company-sponsored events.
As a classically trained chef and insurance expert in the craft beverage industry, Jason has honed his palate for flavors as well as his skills in risk assessment. And he prides himself on his expertise in delivering the quality of service and knowledge, carefully crafted and tested over time, which his clients expect and deserve.
By Fred Czuba
For the Oregon Beer Growler
Whether you are on the consuming end of the craft beverage food chain or designing recipes for your next holiday ale, both parties have one element in common: The Love of Story.
Every craft producer has one. Every customer wants to hear one. But too often in our haste to sell and to buy, we pay far too much attention to the price point on the shelf, forgetting that packaging — and labeling in particular — is not just a list of ingredients. Perhaps it is because so many have forgotten what a good story is.
A good story doesn’t just list what’s inside the bottle. Back in the ‘70s, America went through a fad where generic labeling was trendy. Simple black-and-white packaging identifying mayonnaise, red wine and beer were amusing, and the contents inside were decent examples of what was labeled, but there was no connection between seller and buyer. Seldom a second purchase. No child on your lap next to the fire saying, "Read me this story again daddy. It's my favorite." No mother would read to their child from a book simply labeled, "Fairy Tale," and no child would be interested. They want to see the cover, the pictures. They want to know the names of the characters — root for the underdog and have their hearts race for the imperiled hero, even though they know how it ends. That is the essence of story, and a connection that every manufacturer hopes to build with their customer.
Here are a few guiding tips on how a producer/storyteller can connect to their consumer/listener.
1. Engage the consumer
"We make great beer," "We use only quality ingredients" and "Growing grapes since 1972" can all be facts, but are total yawns. It works as a beginning, much like "Once upon a time," but it doesn't say much more. If I saw a label that said, "You can read the fine print, but we know you're more curious about what happens after you remove the cork," I would buy it out of pure curiosity. It's the promise of a good story that pulls you in.
2. Tell your story, not someone else's
Just because everyone makes an IPA or a pinot noir or a gin doesn't mean you have to. Bow to the market out of necessity if you must, but your story is uniquely yours. Only you can tell it. Whether this means that your Celtic roots drive you to harvest grapes for a particular wine only on the night of a full moon or you are a brewer who is the great, great, great grandson (or granddaughter) of George Washington and every batch contains a blade of grass from Mount Vernon, it's your story to tell and it’s unique.
3. Catch their eye
Most consumers judge a book by its cover. A label is not just an ingredient list, a government warning and a barcode. Everyone has that. Be creative. Whether you use paper labels, Mylar or ink decoration, think first about your story and second about the cost of creativity. Yes, budgets are important, but if your product is not jumping from the shelf to a customer's hands, then no one is reading your story. Luckily the craft beverage industry has an ample supply of designers and marketing agencies to aid you in telling your tale.
4. Make them want to read the story again
Do you leave a listener/consumer hungry for the next chapter? With so many choices on the shelf, customer loyalty is a thing of the past. You should not expect that your beer/wine/kombucha/vodka is the only one they will try. But your story should bring them back again and again and hold all others up to your standard. Do you invite them to your world/facility, engage with social media and leave a trail of breadcrumbs in the crowded forest of product choices so they can find you again? There is no one way to do this. If that were true then there would be only one light beer on the market.
And to that point: currently there is an online post attributed to the Brewer's Association asking the public to contribute funds for craft brewers to buy Anheuser-Busch InBev to "take back" craft beer. Even if this is not "fake news" or a Russian hack, one must ask why AB InBev has been so fixated on the craft beer industry for years. The answer is simple. AB InBev craves the narrative. So long as the craft industry has an interesting story to tell and expresses it in very personal ways, then connecting with the listener will yield a long and enriching experience.
Fred Czuba is a BING member and the sales manager at Tri-S Decorating in Tualatin. For nearly 30 years, he has enjoyed listening to and telling the stories of the craft beverage industry.
By Martin Perrier
For the Oregon Beer Growler
Employers can help reduce their workers’ compensation claims costs by encouraging injured employees to report incidents as soon as possible.
Strict reporting deadlines may cause workers to hide their injuries. This can allow an untreated condition to worsen or it can encourage injured workers to hire an attorney to avoid repercussions because they delayed reporting.
A study released by the National Council on Compensation Insurance (NCCI) in May 2015 showed that delayed injury reporting can increase claim costs up to 51 percent. The study showed that costs for workplace injuries for claims reported within one week were the lowest, and were higher for incidents reported one week or longer after an incident. Costs may balloon a few weeks after an incident because the small cut a worker got on his or her arm became infected, requiring surgery and antibiotics, or the pain in the knee that resulted when an employee stepped off a platform has developed into tendon or ligament damage. Workers may wait to report what seem to be minor sprains, strains or other injuries in the hope they will heal on their own. Encouraging employees to report these injuries to their supervisor as soon as possible can help these incidents from developing into costlier claims that could, for example, require surgery instead of physical therapy.
Early reporting of a workplace incident allows employees to better investigate by collecting evidence and interviewing witnesses soon after it happens. It also benefits the injured worker. Employers can help those individuals better understand the claims process, such as how they access medical care and, in more serious cases, time-loss (temporary disability) payments. Moreover, this approach pays dividends because employers are easing a worker’s concerns and employers are letting their employees know that someone cares about them. This translates into more content employees and helps with workplace morale. Late reporting of claims can not only affect an injured employee’s financial security, but it can also cause unnecessary anxiety and uncertainty.
It’s ideal to report an injury within 24-48 hours after a workplace incident in order to keep claim costs down. While early reporting is best to manage claim costs, NCCI and safety experts say that employers should work to avoid being punitive. Harsh accident reporting policies may have the opposite effect if employees feel they could face negative consequences for missing a reporting deadline. It is vital that employers take the time to discuss early reporting with workers, and look at ways to reduce lag time for incident reports that occur weeks after an accident.
The Caputo Group makes the claims reporting process as simple as possible for our clients. We encourage our clients to report claims in a timely manner. This has a two-fold benefit: it allows the employee to enter care and treatment quickly, which can lead to a faster return to work, and it improves the bottom line for our clients.
Martin is a native of Fallon, Nev. He has been the claims manager for The Caputo Group since 2013.
By John Stephens
For the Oregon Beer Growler
A looming threat that seems nearly impossible to escape today a cyberattack. How many of you have received a notice stating that your personal information has been stolen, a major retailer was hacked or a credit bureau was compromised? This problem extends to small businesses as well, including breweries. In this article, you’ll find five easy tips to enhance cybersecurity, and since I’m a homebrewer, I thought it would be more relatable to talk about it in beer-making terms. While the world of cybersecurity is far different from the world of brewing, there are some close analogies we can use to describe the process:
· Inspecting and maintaining your equipment
· Adequate cleaning and sanitization
· Limiting those who can influence the process
· Process control
· Recurring quality checks
Inspection and Maintenance — Just like faulty equipment can result in less-than-desirable beer, the same can be said of cybersecurity. We call this “vulnerability management” and it includes all of the software patching and updating necessary to keep your computer and software secure along with the periodic checks to verify that. Software on a computer (or tablet, or laptop or smartphone), requires constant patching to ensure it’s not susceptible to exploit. Once the patches are applied, it’s necessary to validate they’ve been successfully installed. Think of this like an inspection of your equipment to make sure there are no cracks, splits or leaks that could lead to unexpected “stuff” mixing with your brew.
Cleaning and Sanitization — Another common downfall in brewing is a lack of adequate cleaning and sanitization, and it’s the same for cybersecurity — except instead of the resulting funky, undrinkable beer we’re talking about viruses and malware. Even a well-planned and well-maintained computer network can be ruined if it’s not properly cleaned and the virus removed. So just as you must scrub away the gooey remnant of the last batch clinging to your equipment, it’s important to have antivirus and antimalware systems in place to get rid of that stuff on your computer.
Process Influence — When brewing beer, who does what depends on a variety of things, including scale of operations, levels of expertise and so on. Let’s face it, regardless of the method in place, it’s not likely that you let the intern tweak the brewing process. It’s like that in cybersecurity as well, although it’s necessary to have a system in place for this. But because it’s all handled electronically, it’s not as easy as recognizing your coworkers’ faces when they arrive. Instead, people log on to their accounts with passwords, which aren’t particularly foolproof anymore. It’s important to strengthen this process by using multi-factor authentication. That simply means adding another element to validating who you say you are. This ensures only legitimate users are able to do things on your network where critical information is stored. Think of this as preventing the intern from customizing the batch!
Process Control — When you’re making beer, it’s important to control the process — whether it be the mix of ingredients or the temperature at which the beer is stored. This is true in cybersecurity as well; it’s all about control. Control involves user permissions and the ability to make changes. Consider how a batch of beer might be affected if it were fermenting in an open room with no restrictions on who could enter and make changes. Maybe someone might stop by and decide they need the airlock from this batch for their own project. If everyone can make changes, there is no consistency or control. Would you brew beer this way? If not, think about applying the same principles to your network.
Quality Checks — Brewing good beer requires a dedication to quality. And a dedication to quality means a dedication to quality control in the form of inspection and, especially, tasting. It’s like that in cybersecurity too, although not as much fun. Continual checks ensure things are running securely. Security monitoring is like quality control in brewing. If you don’t do it, you might end up with a bad batch. Even worse, you might not realize you’ve got a bad batch until you’ve taken a big swig. It’s like that in cybersecurity too, except a bad swig may be something like identity theft, encrypted files or worse.
There is far more to making good beer than the five the things I’ve talked about as there is far more to cybersecurity. If you think about the items we’ve addressed as being just as vital to cybersecurity as their counterparts are to good beer, neither of us will run into a bad batch.
John Stephens, CISSP, CEHv8, Security+, CHPSE, ITIL Foundation, is managing partner at Luminant Digital Security. He specializes in cybersecurity and compliance for SMBs.
By Christopher Morehead
For the Oregon Beer Growler
As you may recall from prior Oregon Beer Growler issues, the status of Oregon’s overtime rule for mills, factories and manufacturing establishments (which includes breweries) has been in constant flux since December 2016. That is when the Oregon Bureau of Labor and Industries (BOLI) unexpectedly decided to reinterpret longstanding overtime laws by requiring that manufacturing employers “pyramid” (i.e., pay both) daily and weekly overtime hours. Unsurprisingly, employers were extremely concerned with potential exposure to wage claims (including class actions) and, further, whether they’d have to completely overhaul their scheduling and pay practices.
However, after legal battles and legislative action, Gov. Kate Brown signed into law House Bill 3458 on Aug. 9, 2017, which explicitly rejects BOLI’s 2016 interpretation and brings much-needed clarity and certainty to Oregon breweries. The new law will permit breweries to pay nonexempt employees the greater of daily or weekly overtime. As a compromise with labor interests and lobbies, the law will also impose new maximum limits on hours in the workweek for manufacturing employees.
When Will the Law Take Effect?
The provision of the law affecting how manufacturing employers calculate daily and weekly overtime takes effect upon the law’s passage. The provisions that impose new maximum limits on hours in a workweek take effect Jan. 1, 2018.
Which Employees Are Covered by the Law?
As mentioned, the law applies to individuals employed in breweries. However, the law does not apply to employees “whose principal duties [are] administrative in nature or who are not otherwise engaged in the direct processing of goods in the usual course of the employee[s’] duties.”
There are also numerous exemptions. The law does not apply to supervisors, managers, foremen or forewomen, or other employees whose “primary duty” (i.e., who spend more than 50 percent of their time) supervising and directing work. In addition, employees are not considered “employed in” a manufacturing establishment if they perform duties that do not include work in connection with production machinery and are in a location that is physically separated from the actual production process by means of an architectural barrier. For example, a marketing employee working in a back office, which is physically separated from the production floor, probably would not count.
Does the Law Apply to Employees Subject to a Collective Bargaining Agreement?
No, provided that a collective bargaining agreement (1) is in effect at the employee’s worksite; (2) contains a provision that limits the employee’s required hours of work; and (3) contains a provision for the payment of overtime hours of work.
How Does the Law Change the Way in Which Overtime Pay Is Calculated?
As noted above, in December of 2016, BOLI changed its guidance to employers on the payment of daily and weekly overtime hours. Under BOLI’s revised guidance, the requirement to pay overtime wages for working more than 10 hours in a day under Oregon Revised Statutes (ORS) 652.020 and the requirement to pay overtime wages for working more than 40 hours a week under ORS 653.261 operated independently of each other, without an offset. As a result, BOLI directed employers to “pyramid” the overtime hours — i.e., calculate the amount of overtime earned by the employee under each statute and pay both overtime amounts to the employee.
The new law restores the overtime calculation method that BOLI had historically advised for employers: When employees who are entitled to daily overtime have worked more than 40 hours in a workweek and have also exceeded the maximum number of hours on one or more days in the workweek, thereby earning daily overtime, the employer should calculate overtime hours worked on both the daily and weekly bases and pay the greater amount.
The law further clarifies that a “workweek” means a “fixed period of time established by the employer that reflects a regularly recurring period of 168 hours or seven consecutive 24-hour periods.”
What Are the New Limitations on Maximum Hours in a Workweek?
Under the new law, ORS 652.020 is modified to impose the following additional limitations on hours in a workweek:
— Covered employees may not work more than 55 hours in any one workweek; however, an employee may “work up to 60 hours in one workweek if the employee requests or consents in writing to enforwork more than 55 hours in the workweek.”
— Breweries are likely eligible for an “undue hardship period exemption” because they process perishable products in the ordinary course of their business. The “undue hardship period exemption” allows the employer to permit employees to work up to 84 hours per workweek for four workweeks and up to 80 hours per workweek for the remainder of the undue hardship period. To claim the exemption, employers must provide notice to BOLI and obtain written consent from each affected employee.
What Are the New Enforcement Provisions?
The law makes it unlawful for employers to discharge, refuse to hire, discriminate or retaliate against employees or prospective employees who inquire about their rights to overtime compensation under the law, report violations, file complaints or decline to consent to work more than 55 hours in a workweek. Employees may file complaints with BOLI to enforce their rights or file fee-bearing private civil actions. In addition to recovering damages, BOLI has authority to assess civil penalties of up to $3,000 per violation.
By Staci Wallace
For the Oregon Beer Growler
Working with hops at Crosby Hop Farm, one can’t help but be inspired by the way the baby shoots push through the soil every spring and then reach for the sky all summer. As the shoots unfurl into leaves and climb the twine, coiling clockwise up the 18-foot trellis, watching a hop yard’s Herculean growth never gets old. To witness hops transform through the power of the sun into golden beads of lupulin loveliness every year is to understand the true meaning of solar power.
Drawing on this inspiration, we committed to our own on-farm solar array, which generates 57.6 kilowatts supplying around 30 percent of the farm’s energy needs. The rest is offset through Portland General Electric’s Green Source and Clean Wind programs. After starting down the path to solar, we realized that relying on the sun’s rays to grow was more challenging for us than it was for the hops. But Crosby plans to gradually expand our photovoltaic system until it supplies all of our energy.
Sustainability at Crosby doesn’t stop there. As a Certified B Corporation, the farm launched a zero-waste initiative and works to enhance biodiversity. In addition to avoiding or offsetting pollution and greenhouse gases to reduce our carbon footprint, our renewable energy program is a tool to enhance our relationship with the community. Nestled between a lush Nugget hop yard and xeriscaped berm, the solar array is a great conversation piece on farm tours. We especially enjoy educating middle school students about sustainable farming and business practices every year through the Adopt a Farmer program.
Embracing core values like sustainability and community keeps us in good company. Certified B Corps must continuously discover new ways to collaborate and use business as a force for good. One example of that is our partnership with Salmon-Safe. All Crosby-grown hops are Salmon-Safe certified, which enhances the quality of the hops as well as watershed beauty and vitality.
Here in the Willamette Valley, we are blessed with rich, fertile soils and an abundance of water. As good stewards of that land, the farm features 30 acres of undisturbed riparian habitat that is home to an array of native wildlife. Crosby has expanded the biodiversity around the farm by creating native habitat restoration sites and pollinator gardens that are expanded annually.
Much like the thriving native species that are a reflection of the Willamette Valley’s unique character, Crosby hops are an expression of the land that sustains their growth year after year. For example, the floral, tropical quality imparted on many varieties is Oregon putting its stamp on the crop. We’re especially excited to see how the region and its terroir will affect the newest variety we’ve planted: Comet! We can’t wait to hear the Willamette Valley’s take on this classic that’s making a comeback and known for its “wild American” aroma. Look for the Salmon-Safe certified, Crosby-grown Comet in a craft brew near you in 2018.
As the quality and sustainability manager at Crosby Hop Farm, Staci loves working with hops both in the lab and in the field. When she's not working, she and her two young sons enjoy exploring the great city of Portland and its environs through hiking, SUPing and camping.
By Jason Jordan
For the Oregon Beer Growler
With the growing popularity of craft breweries comes an increasing amount of OSHA violations. In fact, the amount of OSHA violations at breweries more than doubled between 2010 and 2015, according to the Bureau of Labor Statistics.
Craft breweries typically employ brewers who are expected to work with hazardous chemicals and dangerous equipment in confined spaces. Many of these businesses are open to the public for tours and tastings, which exposes them to further liabilities. It is important to understand what OSHA citations brewers are receiving so they can keep employees safe and prevent future citations. The following is a list of common violations:
29 CFR 1910.146 — Permit-Required Confined Spaces
Brewers spend time cleaning, servicing and performing maintenance inside equipment such as fermenters, grain silos, mash tuns and kettles. OSHA inspectors commonly cite breweries for failure to provide safe practices while working in such confined spaces.
OSHA defines a "confined space" as an area that meets the following three conditions:
· It is large enough and so configured that an employee can bodily enter and perform assigned work.
· It has limited or restricted means for entry or exit.
· It is not designed for continuous employee occupancy.
How to Avoid This Violation
OSHA requires several measures to ensure safety in confined spaces that could pose hazards to a worker, including the following:
· A written confined-space permit program — OSHA requires a written program that identifies and evaluates the hazards that may be present. It also requires testing the atmospheric conditions of a confined space, and includes instructions for summoning rescue and emergency services.
· Entry permits — Employees must receive an entry permit, signed by the entry supervisor, before performing work in a confined space.
· Worker training — Employers must provide all necessary training for employees who may enter a permit-required confined space.
29 CFR 1910.119 — Process Safety Management of Highly Hazardous Chemicals
Breweries commonly rely on ammonia refrigeration to keep their supplies cold. However, some brewers fail to realize that ammonia is one of the dangerous chemicals covered under 29 CFR 1910.119, OSHA's regulation for preventing or minimizing the release of toxic, reactive, flammable or explosive chemicals.
How to Avoid This Violation
Breweries can avoid being cited for this violation and keep employees safe by doing the following:
· Develop a process hazard analysis in accordance with the standard.
· Outline processes for operating and emergency use of refrigeration systems.
· Create written procedures, and train employees to maintain relevant equipment.
29 CFR 1910.147 — The Control of Hazardous Energy (Lockout/Tagout)
Lockout/Tagout (LOTO) violations are among OSHA's most common citations each year. Employers must adhere to specific LOTO practices and procedures to protect employees from the unexpected startup of machinery and equipment.
How to Avoid This Violation
· Create a LOTO program that protects employees from all sources of hazardous energy (including electrical energy, hydraulic pressure, gravity and heat).
· Create written procedures that cover the control of hazardous energy.
29 CFR 1910.1200 — Hazard Communication
Craft breweries are often cited for violations related to OSHA's hazard communication regulation, which governs the labeling of chemical hazards in the workplace.
How to Avoid This Violation
· Develop a hazard communication plan.
· Make sure chemicals are completely labeled and accompanied by safety data sheets.
· Train employees on how to handle and monitor the presence of chemicals.
By Douglas D. Morris
For the Oregon Beer Growler
Brewers may need to devote time and attention to other aspects of their business, besides making great beer, as the craft beer industry continues to be in transition.
After multiple years of double-digit production growth, that paced slowed in 2016, and production growth could be in single digits again in 2017. This slowing has many craft breweries rethinking their strategy. Breweries that have been using fast-growing revenue to pay for new facilities and equipment might need to raise future capital from new investors.
Also, recent sales of numerous craft breweries have attracted a lot of attention. There is every reason to think that those acquisitions will continue. These transactions may have some breweries considering a sale or merger of their own.
In this climate, it is important to discuss practical steps to take to be ready for a strategic transaction, such as a new investment or sale. The bigger questions of "Should you bring on new investors?" or "Should you sell your brewery?" need to be examined and discussed among the ownership group and perhaps a qualified business adviser, so we will forgo that discussion here.
A typical investor or buyer will conduct a due-diligence investigation into your business as part of any transaction. The investor or buyer will look for any risks that might affect the value of your business during an investigation that can be quite detailed and thorough. But the process will go more smoothly if certain issues are addressed before your first meeting with a potential investor or buyer.
Clear Ownership of the Company
Start-up breweries may have some ambiguity about who owns what. Some friends and family may have provided start-up capital; were those amounts loans or equity investments? Some contractors might provide artwork, design or construction services; were they going to be paid in cash or equity? People's memories may change when money is on the line. Now is the time to sit down and put any oral agreements and understandings in writing.
Clear Ownership of Brands
Branding and trademarks are as valuable to brewers as their great recipes. Obviously, breweries should ensure that their brands are protected in the places where they currently sell product. Breweries should also confirm that there is a clear path to protection in places targeted for future expansion after an investment or acquisition. A brand idea that works great in Oregon might not be available in Idaho or California. It is frustrating to invest in a brand that cannot work in the long run. Reviewing your brand and product strategy with an intellectual property lawyer will help your brewery plan for future growth and resolve potential difficulties early on.
Good Business Policies and Legal Compliance
Good general operating practices and legal compliance will naturally help lead to good business results, less risk and better profitability. Proper financial and accounting reporting and procedures will help you stay informed about your company's business and help reduce fraud and embezzlement. Appropriate insurance coverage is another important layer of protection.
Naturally, legal compliance is important as well. One vital component of this is following updated employment policies. As your brewery grows, you may add more staff. And as your staff head count increases, more and more federal, state and city employment laws will apply to your company. It can be especially difficult to track the different laws relating to medical and sick leave. Reviewing your current situation and future growth plans with professionals who track and understand these laws will help to ensure that your business has the right policies and procedures in place and to minimize claims and liability.
Understanding Important Agreements
It is also important to review the brewery's key agreements, such as leases and distribution. Good landlords and distributors will want to be good business partners with your brewery and help you grow your business. The language in some distribution agreements may unintentionally interfere with that growth by making it difficult to expand with new products, owners or in different territories. For example, contracts might limit changes of control or assignments, or might grant exclusive rights. As your brewery's strategies shift, it will be helpful to review your key agreements to ensure that they are flexible and meet your needs.
Some of these projects might take some time to address. Meanwhile, you also have the rest of your brewery's normal day-to-day operations to handle. It could benefit both you and your business to begin to resolve any issues now rather than waiting until a transaction is underway. If time is urgent, then you might be forced to make rushed decisions and unnecessary compromises.
You may ultimately decide not to bring on investors or sell your brewery. But if you consider these suggestions, and run your business so that it is attractive to investors or buyers, it may make your business run more smoothly and profitably for your current ownership group.
Doug Morris is a member of Miller Nash Graham & Dunn’s business and alcoholic beverage law teams in Portland. His practice focuses on general corporate representation of businesses, from high-technology and high-growth companies to breweries, nonprofits, and social enterprises. Doug can be reached by phone at 503-205-2533 or by email at email@example.com.
By the Brewers Association
For the Oregon Beer Growler
The Brewers Association (BA) — the trade association representing small and independent American craft brewers — recently released 2016 data on U.S. craft brewing growth. With more than 5,300 breweries operating during the year, small and independent craft brewers represent 12.3 percent market share by volume of the overall beer industry.
In 2016, craft brewers produced 24.6 million barrels and saw a 6 percent rise in volume on a comparable base and a 10 percent increase in retail dollar value. Retail dollar value was estimated at $23.5 billion, representing 21.9 percent market share. By adding 1.4 million barrels, craft brewer growth outpaced the 1.2 million barrels lost from the craft segment, based on purchases by large brewing companies. Microbreweries and brewpubs delivered 90 percent of the craft brewer growth.
“Small and independent brewers are operating in a new brewing reality still filled with opportunity, but within a much more competitive landscape,” said Bart Watson, chief economist, Brewers Association. “As the overall beer market remains static and the large global brewers lose volume, their strategy has been to focus on acquiring craft brewers. This has been a catalyst for slower growth for small and independent brewers and endangered consumer access to certain brands. Small and independent brewers were able to fill in the barrels lost to acquisitions and show steady growth, but at a rate more reflective of today’s industry dynamics. The average brewer is getting smaller and growth is more diffuse within the craft category, with producers at the tail helping to drive growth for the overall segment.”
Additionally, in 2016 the number of operating breweries in the U.S. grew 16.6 percent, totaling 5,301 breweries, broken down as follows:
· 3,132 microbreweries
· 1,916 brewpubs
· 186 regional craft breweries
· 67 large or otherwise non-craft brewers
Small and independent breweries account for 99 percent of the breweries in operation. Throughout the year, there were 826 new brewery openings and only 97 closings. Combined with already existing and established breweries and brewpubs, craft brewers provided nearly 129,000 jobs, an increase of almost 7,000 from the previous year.
By Christopher Morehead
For the Oregon Beer Growler
With beer festival season getting into full swing, it’s easy to turn one’s attention toward things like spending afternoons in sun-soaked beer gardens or deciding which summer release to fill your growler with (or asking yourself why you only brought one growler…). However, employers in the craft beer industry should also be aware that certain legal obligations, at least with respect to employment laws, are about to change. One is a big-time game changer. One is relatively minor (but necessary to follow). And one will relieve employers from a recordkeeping burden.
1. Oregon’s Pay Equity Bill — Pay Attention to the Details
On June 1, 2017, Gov. Kate Brown signed a bill that seeks to help ensure workers receive equal pay for equal work. The new law makes it unlawful for employers to pay employees performing comparable tasks different amounts on the basis of sex, race, religion, disability, sexual orientation, age or any other protected status. We can all agree that people should not be paid less based on any of those factors. To get there, however, all employers need to pay close attention to what the law requires.
The law specifically prohibits employers from:
· Screening job applicants based on their current or past compensation
· Setting a prospective employee’s compensation based on current or past compensation
· Inquiring about a job applicant’s salary history (including applications) until after making a job offer that includes a compensation amount
While employers can still compensate employees performing comparable work at different rates, the difference must be based on bona fide factors related to the position, such as seniority, merit, production, workplace location, training, education and experience. The potential exposure for employers facing a pay equity suit who can’t “prove their innocence” can be massive. Employees can file complaints with Oregon Bureau of Labor and Industries (BOLI) or go straight to court and seek compensatory damages (such as back pay) as well as punitive damages and attorneys’ fees and costs. In addition — and of particular concern for larger employers — companies will also be exposed to class-action lawsuits, which could easily shutter a once-thriving business.
Luckily, the law gives employers some time to prepare, as the majority of claims cannot be brought until after Jan. 1, 2019 (violations of compensation history inquiries become actionable in 2024). However, employers would be wise to start thinking about revising job applications or once-standard interview questions that would violate the law. In addition, employers may also want to take advantage of a safe-harbor provision, which limits exposure if the employer has conducted an equal-pay analysis within three years of a civil lawsuit.
2. Oregon Minimum Wage Rates Increased July 1, 2017
You may recall that, as part of the national “Fight for $15” campaign last year, Oregon passed a bill that increases the state’s minimum wage rate on an annual basis through July 1, 2022. You may also recall that different minimum wage rates apply depending on where the employer is located.
Employers in the Portland-metro area face the biggest hike and must now pay employees at least $11.25 per hour, a $1.50 increase from the 2016 requirement of $9.75. Employers in “non-urban counties” (defined as Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa and Wheeler) are required to pay employees at least $10 per hour, a $0.50 increase. All employers that are outside the Portland-metro area, but not in a “non-urban county,” must now pay at least $10.25 per hour, also a $0.50 increase from last year.
3. OSHA Electronic Recordkeeping Rule Delayed
Last year, the Occupational Safety and Health Administration (OSHA) issued a rule that, starting July 1, 2017, would have required employers to electronically file employee injury information to an electronic recordkeeping system. However, in May 2017, OSHA postponed the filing requirement for a yet-to-be-determined time period.
For those employers ready to comply with the electronic recordkeeping law, you can take that off of your to-do list for the time being. But please note that this delay does not in any way impact your ongoing obligation to comply with your OSHA Form 300, 300A and 301 recordkeeping requirements. You just don’t have to worry about your workplace accident history being posted on a public website for everyone to see.
Have a safe and wonderful summer!
Chris Morehead is an attorney in the Portland office of Ogletree Deakins, a national labor and employment law firm. He focuses on hospitality employers, with an emphasis on the craft beer industry. He can be reached at firstname.lastname@example.org or 503-552-2140.