For the first time in 20 years, the Department of Justice (“DOJ”) has published guidance on website accessibility matters under the Americans with Disabilities Act (“ADA”).
In the publication, posted on March 18, 2022, and available at ADA.gov, the DOJ reiterates its priority for ensuring web accessibility for people with disabilities and emphasizes this is an obligation of both state and local governments under Title II of the ADA, and businesses that are open to the public, or public accommodations, under Title III.
The guidance provides a non-exclusive listing of examples, options, and resources for assistance and guidance in making websites available to the disabled. Importantly, however, the technical assistance states that “The Department of Justice does not have a regulation setting out detailed standards, but the Department’s longstanding interpretation of the general nondiscrimination and effective communication provisions applies to web accessibility.” Thus, as the publication further notes, businesses and states have flexibility in how they comply with the ADA general requirements as to websites, but they still must ensure that the programs and services in good faith provided to the public are accessible to people with disabilities.
The publication also notes that automated accessibility checkers and overlays can be helpful tools in identifying or fixing problems, but that they need to be used carefully. The DOJ further states that pairing a manual check of a website with the use of automated checkers can give a better sense of the accessibility of the website. The DOJ also explains that the existing technical standards provide helpful guidance concerning how to ensure accessibility, and refers to the Web Content Accessibility Guidelines (WCAG) and the Section 508 standards utilized by the Federal Government for its own website.
ShuffieldLowman is ready to assist companies and clients with respect to issues that may arise from ADA website compliance. For additional questions on ADA website accessibility, please contact our commercial and civil litigation or corporate law teams. Visit our contact page here.
We enter into contracts all the time, but what exactly creates a contract? Simply put, a contract is formed when one entity makes an offer to another, and that offer is accepted. Any time you exchange money for services you have likely signed a contract with the service provider. Have you ever hired a plumber? Did you receive a written estimate that you signed to accept the estimate and begin services? If so, you’ve entered into a contract.
The three essential elements are the offer, acceptance, and consideration. To begin a contract, an offer must first be extended. Details of the agreement, as well as its terms and conditions, should be included. Simply explained, an offer is an attempt by the offeror to enter into a contract with another party. Once the offer has been made, the offeree has the option of accepting or rejecting the proposal and its terms and conditions. Finally, to have a legitimate legal agreement, something of value must be exchanged such as money, merchandise, property, protection, or services. If the parties are not trading in money, they should ensure that whatever they are trading, commonly known as their consideration, is considered valuable by the court.
Dissecting a contract even further, there are 7 key ingredients that should be included in a contract: Who, What, Where, When, How Much, The Date, and Signatures. The “Who” in the case of contracts are the parties involved. Let’s say you call a plumber to fix a leak. In this case, you and the company the plumber works for is the “who.”
The “What” is the scope of work. The scope of work is the section of a contract or agreement where all expected activities and deliverables are detailed with the goal of harmonizing expectations between both parties is known as the “tasks and deliverables section.” You and the plumber are discussing the problem and they tell you the leak is part of a bigger problem and outline what work needs to be done to correct the issue. They write up a proposal explaining the scope of work. This is the “what.”
The ”Where” is the location of the work. In the case of the plumber, your home is likely the “where” with special attention to specific locations affected such as the front or back yard, the bathroom, the kitchen, etc.
The “When” is the timeline of work. The plumber, in their written estimate that will become a contract if you sign it, will lay out the timeline for completion of the project. It may take a week to get a special part, and then a day to do the work, and another day to follow up.
The “How Much” is the terms of payment. What will it cost for whatever merchandise, property, protection, or services you’d receive? Going back to our plumber example, the quote you will sign will tell you how much the services will cost and the payment timeline. Will you have to pay a deposit? Will you pay the balance upon completion?
The “Date” is simply the date the contract becomes effective. Usually, that is the date the contract is signed.
Finally, the “Signatures” close the deal and the contract is complete. The plumber has given you the scope of work, the location of the work, the timeline of the work, the expected payment terms, and has dated the estimate. Now you accept or decline. You’ve decided the plumber you’ve called is giving you a good deal, so you accept and sign the estimate.
You now have a contract with the plumber’s company. You have been given an offer, you have accepted, and you have met the consideration standards. In doing so you have met all seven key ingredients for a contract. You know the who, what, where, when, how much, have the date, and have given your signature to confirm your intent to follow through with the agreement. Our commercial litigation, real estate, construction teams, and other attorneys within our practice areas are here to advise our clients on their options based on the specific terms outlined in their contracts. For more information and assistance with a contract, you can contact us here.
Planning for key employees is an important aspect of the growth of any business. Key employees can either drive value to your company or create a roadblock down the line when preparing for an exit transaction. This is why, as a business owner, it’s never too early to plan for ways to retain and reward key employees through the ultimate sale of your business.
Luckily, your first resort for keeping a key employee happy does not automatically mean giving up ownership. We have seen an uptick in companies using constructs like “phantom stock,” “equity participation shares” and other similarly named plans that, in essence, motivate an employee by enhancing their opportunity for participating in the growth of the company and giving them “skin in the game” all without selling actual shares in the company.
Why not actual stock?
Employees and employers alike are sometimes surprised to find out that issuing actual stock to an employee typically means that the employee must pay income and employment taxes on the value of the stock in the year in which they receive it (as if the stock was cash compensation). There are ways around this, such as requiring the employee to pay for the stock or issuing options to buy stock at a later date. But unless the employer is willing to give them the cash to pay for the stock, which additionally also triggers income and employment taxes, employees will rarely exercise their stock options until an exit transaction is imminent, and will have at that point already forfeited the potential tax benefits of stock ownership. In addition, employees holding actual stock in their employer have the rights to call owner meetings, inspect books and records, review financials, and exercise various other rights of a stockholder under state law. For pass-through entities in particular, employees will have to be issued K-1 statements that will hold up the filing of the employee’s own personal tax returns, and they may potentially have to pay taxes on “distributable” income of the company that they never actually receive. Further, once an employee holds actual stock, it is very difficult to get it back (in the event of a termination, for instance) without that employee’s sign-off. For all of these reasons, we are seeing more and more emerging and established companies steer clear of awarding actual stock to their key employees.
What is a Phantom Stock Plan?
A phantom stock plan is a compensation plan that provides key employees the financial benefits of actual stock without the tax and other legal issues involved in ownership. This allows key employees to still participate in the growth and profitability of the company.
Who are the Key Employees?
Key employees are typically those that meet the following criteria: they are highly compensated or they carry out management-level duties (as defined by the Department of Labor), and in either case, they must be able to negotiate their compensation packages. Employees that do not fall into one of these buckets are typically not eligible for phantom stock plans.
How is a Phantom Stock Plan Structured?
The value of the phantom stock units can be measured by the value of the company stock. There are two main types of phantom stock plans: “appreciation” plans and “full value participation” plans. The full value participation plan pays both the value of the underlying stock and any appreciation in the value. The appreciation-only plan pays just the increase in value of the stock share going forward from the issuance of the shares. For either of these plans, employers will often pick a percentage of the company or a specific number of shares that are used as the basis of the calculation of the value of what is due to the key employee.
The payout under the plan will often be based upon revenue, EBITDA, multiples and ultimately the value of the company upon exit.
Further, the employer can choose to vest the plan benefit over a certain number of years, give vesting credit to certain employees for years served, or make the plans fully vested from inception.
When is the key employee paid?
A phantom stock plan will typically payout upon the occurrence of an exit transaction. The payment of the value accruing to the key employee will typically be structured to be contingent on them remaining with the company through at least until the end of the transaction and often up to one or two years after the completion of the transaction. Some plans also have other payment triggers, to the extent they occur prior to an exit transaction, such as the key employee’s death, disability, retirement, or termination of employment. Regardless of the payment trigger, the plan will specify if the payment will be made in one lump sum or as payment installments over time once one of the payment triggers occurs.
At ShuffieldLowman, our corporate law and mergers & acquisitions team are here to advise clients on their options when looking to retain and reward key employees before, during, and after the exit transaction. If you have any questions, you can contact a member of our team directly or contact us through our website. Phantom stocks programs should be reviewed by an attorney to ensure it is drafted properly and meets the requirement as set by IRS code 409(a).
In an important decision issued April 7, 2021, the United States Court of Appeals for the 11th Circuit – which covers Alabama, Florida and Georgia – reversed a lower court decision and ruled that Winn Dixie’s website does not violate the Americans With Disabilities Act (“ADA”) with respect to its use by visually impaired people.
The Plaintiff in the lawsuit, Juan Gil, is legally blind and was a long-time Winn Dixie shopper. He found that Winn Dixie’s website would not function with his screen-reading technology. The website’s primary functions were to re-fill existing prescriptions for in-store pick-up and to link digital manufacturer coupons to the customer’s Winn Dixie rewards card so that the coupons are applied automatically upon check-out. Gil obtained a summary judgment against Winn Dixie in the District Court for the Southern District of Florida, which held that since its website was incompatible with screen-reader software, Winn Dixie violated the ADA. The District Court issued an injunction requiring Winn Dixie to make its website accessible to individuals with disabilities, specifically by conforming its website to the Web Content Accessibility Guidelines 2.0, and ordered other related relief.
In a 2-1 decision, a panel of the Atlanta-based Appeals Court ruled, first, that websites themselves – even if conjoined with a business that has brick and mortar facilities – is not a “public accommodation” under the ADA. On this first issue, it disagreed with rulings of other circuit courts of appeal.
Second, the 11th Circuit declined to hold that a company website may provide a “nexus” to its brick and mortar facilities so as to be viewed as part and parcel of the same, at least under the facts of this case, so as to require that the website afford accessibility to the visually impaired under the ADA.
Last, the Court held that Winn Dixie’s website did not otherwise violate the ADA by presenting “intangible barriers” to the “equal access to the services, privileges and advantages of Winn Dixie’s physical stores”, which are places of public accommodation. In reaching this, the Court emphasized that Winn Dixie’s website has only limited functionality and, most importantly, did not function as or allow points of sale. The chief advantages of the website were that it allowed the refill of prescriptions (which still needed to be picked up in the store) and also allowed manufacturer coupons to be put on a Winn Dixie shopping card (although the redemption of such coupons still had to happen within a Winn Dixie store). Gil’s inability to access these features, while sighted customers or users could, did not translate into an ADA violation. The Court distinguished other cases where sales actually occurred through the company website, and thus it may reach a different decision if presented with those facts.
As indicated above, the 11th Circuit decision is at odds with decisions of other circuit courts of appeal, thus setting up a conflict in the law which can only be resolved by the United States Supreme Court. Until the same occurs, jurisdiction and venue (that is, the court and location where the action is held) will be extremely important to, if not determinative of, the outcomes in these cases.
ShuffieldLowman stands ready to assist companies and clients with respect to issues that may arise from ADA website compliance. For additional questions on ADA website accessibility, please contact our commercial and civil litigation or corporate law teams. Visit our contact page here.
How can you protect business continuity if you get Covid-19 or someone else in your organization gets sick? From a legal prospective, review your governing documents, do you have a board structure in place, are you meeting regularly, who has authority to make day to day decisions made in the ordinary course of business in your absence? You need one or more key people who will also know the ropes and can work in your absence understanding both the big picture and processing management skills. Granting them management authority before illness happens will help them understand how to serve in this role and the work force will recognize their authority. Identify key staff and make sure they have trained someone in their department on taking on their role in the event of illness or absence.
ShuffieldLowman served as legal counsel for Colorado Boxed Beef Company (CBBC), a leading national provider of protein products during its merger with Quirch Foods, creating a leading U.S. distributor and exporter of protein and ethnic food products. CBBC was founded in 1975 with its roots beginning as a protein supplier in the southeast. Now, they are a leading supplier of protein products in the U.S., with both a national and international footprint with their distribution facilities. CBBC was the portfolio company of Altamont Capital Partners, a middle-market private equity firm based in the San Francisco Bay Area with more than $2.5 billion of assets under management. You can view the full press release HERE.
The ShuffieldLowman team that advised CBBC included mergers & acquisitions partners Julia Dennis and the firm president, William Lowman, lending and M&A partner Jason Davis, and real estate counsel attorney Maia Albrecht, along with our talented team of paralegals, Darlene Crisler and Kylea Perrott.
Congratulations! You successfully navigated the Paycheck Protection Program (PPP) loan application process and you were awarded a loan from the SBA. You have spent all the funds in accordance with your advisor’s recommendations and your business’ needs. Now you would like to apply for forgiveness of that loan to turn it into a grant. What do you need to know and what actions do you need to take? Have no fear, the SBA recently issued additional guidance in the form of FAQs to assist you.
Will you need to submit documents with original signatures in ink? It is acceptable to submit digital or scanned copies of any applications or supporting documentation for your loan forgiveness request. Any signatures or consents that you need to provide may also be completed electronically. You should check with your lender/servicer, to make sure their internal rules also allow for this.
If you submit your forgiveness application during the 10-month period after the covered period of your loan ends, then you will not be required to make any loan payments until the forgiveness amount is determined by your lender.
You may elect an Alternative Payroll Covered Period if that aligns better with your payroll practices than the standard Covered Period. Payroll costs incurred during the period are eligible for forgiveness if they are paid by the following payroll date after your period ends.
If you took an Economic Injury Disaster Loan (EIDL) advance, then that amount will reduce any amount of loan forgiveness that you qualify for. If the amount of your EIDL advance exceeds your PPP loan amount, then you will not qualify for any forgiveness.
One important point to remember is that forgiveness is not all or nothing. You may obtain partial forgiveness for the portion of your loan that was expended on allowable expenses and otherwise qualifies under the workforce retention guidelines. If you only qualify for partial forgiveness, then your lender is required to: (1) notify you of the amount of your PPP loan that will not be forgiven, (2) notify you of the date that you are required to start making loan payments, and (3) continue to service your loan over its term.
When should you apply for forgiveness? Many businesses are waiting to file the application for forgiveness since SBA may continue to issue new regulations. Additionally, it appears that another coronavirus relief package is in the works in Congress. It is certainly possible that a new relief package could change the parameters around receiving forgiveness. You may wish to wait a little longer so that there is more certainty before you apply. You should discuss the timing of your forgiveness request with your advisors.
What if you don’t agree with a decision that SBA has made related to your PPP loan or forgiveness of it? There is a process to appeal any decision made by the SBA that negatively impacts you. For instance, SBA is reviewing PPP loans to determine whether the borrower was eligible for all or a portion of the loan they received, if the funds were spent appropriately, to what extent you qualify for forgiveness, etc. If you decide that you need to appeal, then you must include quite a bit of information with your appeal request (copy of the decision you are appealing, a statement of your position, the relief you are requesting, copies of tax filings for your payroll, and additional tax records). You may want to seek help from a trusted advisor to increase your chance of a successful appeal. For more information on PPP loan forgiveness guidelines, see our blog on that topic here.
To speak with an attorney from our corporate law or banking and finance departments, fill out our website contact form or call our Orlando office at 407-581-9800.
The beginning of 2020 brought substantial changes to the Florida Business Corporation Act (“FBCA”). The revised FBCA was signed into law on June 7, 2019 by Governor DeSantis and became effective on January 1, 2020.
The FBCA has not had a substantial revision since it was first revised in 1989. A comprehensive overhaul of the FCBA was warranted to bring Florida’s corporate statute up to date with modern corporate statutory trends and developments. The amendments to the FBCA are modeled after the 2016 version of the Model Business Corporation Act, albeit with several certain deviations. The revised FBCA represents an extensive change to Florida law in 2020; some of these changes include:
- Various definition and language changes;
- Provides for the expansion of a minority shareholder’s appraisal rights;
- Provides for the reservation of a corporate name for 120 days;
- Provides for increased judicial discretion in dissolution matters;
- Addresses items that may be added to articles of incorporation and, at least in one case, one topic that cannot be included in the articles;
- Allows domestic entities, such as a domestic limited liability company, and foreign entities authorized to do business in Florida to act as registered agents; and
- Authorizes a court to remove a director in a derivative proceeding under certain circumstances.
Owners, shareholders, officers, and directors of Florida corporations should be cognizant of the FBCA revisions and how said changes could potentially impact their rights, duties, and obligations. If you are interested in learning more about the amendments to the FBCA please feel free to contact us.
Congress passed the Paycheck Protection Program Flexibility Act of 2020 on June 3, 2020, and President Trump signed it into law on June 5, 2020. The Act made some key revisions to the Paycheck Protection Program (PPP) as well as provided further clarity for issues surrounding the forgiveness portion of the loan. Below are some of the significant amendments that businesses who applied and received PPP loans should now review and take into consideration.
1. While the CARES Act originally granted borrowers only eight weeks to spend the PPP Loan money, this new Act now gives borrowers 24 weeks from when the loan proceeds are received to use the funds and still qualify for forgiveness.
2. The CARES Act originally mandated that at least 75% of the PPP loan funds had to be used towards employee payroll in order for the loan to be forgiven. This new Act has reduced that to 60%. This means that businesses can now use 40% of the loan towards non-payroll expenses and still be eligible for forgiveness. This change was perhaps the most significant as it will make many more businesses (especially those who have not yet been able to hire back employees) eligible for loan forgiveness. Keep in mind, this means that businesses will now have 24 weeks to spend the funds on qualifying rent, utilities and mortgage payments on up to 40% of their PPP loan.
3. For loans that are not forgiven, borrowers now have a minimum of five years to repay the loan – up from the previous two years.
4. Borrowers now have until December 31, 2020 to get their “full-time equivalent” (FTE) employee count back to what it was in the reference period in order to avoid a reduction in the amount of the loan being forgiven. The original deadline was June 30, 2020.
5. The Act allows for two new exceptions for borrowers to achieve full PPP loan forgiveness even if they don’t fully restore their workforce. Borrowers were already allowed to exclude employees who turned down good-faith offers to be rehired at the same hours and wages as before the pandemic. The PPPFA adds that an employer can be exempt from the loan forgiveness reduction related to workforce restaffing if they can document that they:
- Are unable to find and hire similarly qualified employees for unfilled positions on or before December 31, 2020; or
- Are unable to restore business operations to the levels they were at on Feb. 15, 2020, due to COVID-19-related operating restrictions.
6. Under the new law, businesses can defer payment of the employer portion of the Social Security taxes until 2022 (50 percent to be paid in 2021 and the remainder in 2022), regardless of when the loan is forgiven.
7. Payments under the previous guidelines were set to be due after 6 months. Now payments are no longer due until the forgiveness amount is determined and remitted to the lender.
Although many of these changes eased some of the burdens borrowers felt, there are also some major issues that are awaiting clarification. These include:
- Forgiveness Calculation: Will businesses still be eligible for loan forgiveness if their payroll costs fall under 60% of the loan? Under the previous rule, if a company’s payroll expenses were less than 75% of the loan, they could still receive loan forgiveness, but the amount forgiven would be prorated. The way the new law is written, it is unclear whether loan forgiveness would be available for anyone whose payroll costs fall below 60% of the total loan.
- Compensation Limitations: Under the previous law, there was a cap for compensation for any employee making over $100,000. (The cap was $15,384 for the 8-week covered period). The question now is if the provision that increases the covered period to 24 weeks also allows for the salary of employees over $100,000 to be calculated at the 24-week period as well.
ShuffieldLowman’s Corporate Law and Banking & Finance teams are continuing to monitor the changes to the Paycheck Protection Program, and how these new laws will affect Central Florida businesses, banks, and lenders. To speak to an attorney, fill out our contact form.