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How to Survive Scrutiny of Social-media Policies

Karina L. Schrengohst

Karina L. Schrengohst

Does your company have a provision in its employee handbook that prohibits employees from publicly posting content on social-media sites that damages or defames your company or your employees? If you do, it is important to know how to tailor such a policy to survive the National Labor Relations Board’s scrutiny.

This is particularly important because, over the past year or so, the NLRB has taken an interest in social-media policy discipline and discharge cases.

As an increasing number of employees are using social media, many employers have found it necessary to include a section in their employee handbooks that prohibit certain electronic postings. Accompanying this growth is a rise in litigation involving such policies. Therefore, the importance of a carefully drafted social-media policy cannot be overstated.

The NLRB issued its first formal ruling on the legality of social-media policies on Sept. 7, 2012, finding language in an employee handbook that employers commonly use unlawful. Although this is the first NLRB decision addressing this issue, the topic of social media has received much attention from the NLRB and by administrative-law judges around the country. This recent decision reaffirms the board’s position that the National Labor Relations Act (NLRA) is broad enough to provide protection to employees who make comments about their employers via social media such as Facebook posts.

This decision is also consistent with the guidance the NLRB’s acting general counsel has issued in the past year or so that overly broad restrictions on negative statements about the workplace may make employees feel that they are prohibited from using social media to discuss job-related concerns such as wages, hours, and working conditions, and, therefore, such restrictions violate the NLRA.

In the recent case in question, the NLRB found Costco Wholesale Corp.’s social-media policy unlawful, in part, because it broadly prohibits electronic statements “that damage the company, defame any individual, or damage any person’s reputation or violate the policies” in its employee handbook. This language should look familiar to many employers, as it is commonly used in employee handbooks.

Specifically, the rule in Costco’s employee handbook stated that “any communication transmitted, stored, or displayed electronically must comply with the policies outlined in the Costco Employee Agreement. Employees should be aware that statements posted electronically (such as [to] online message boards or discussion groups) that damage the company, defame any individual, or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement, may be subject to discipline, up to and including termination of employment.”

The board found that Costco’s policy could be construed as prohibiting concerted communications, such as speech critical of the company’s treatment of employees or working conditions, and such restriction on Section 7 rights violates the NLRA. Section 7 of the NLRA guarantees employees, whether in a union or non-unionized work environment, the right to engage in concerted activities for the purpose of mutual aid and protection. In other words, all employees have the right to discuss the terms and conditions of their employment.

Although the board failed to articulate any criteria to assist employers in crafting social-media policies, this decision is important because it suggests that employers might avoid liability by including appropriate disclaimers in their social-media policies and restrictions on its application. As part of its reasoning, the NLRB criticized Costco’s policy for not having disclaimer language that the policy did not apply to communications protected under the NLRA. This suggests that express language excluding Section 7 communication from the scope of the policy might have survived the board’s review. And it is likely that the board will find policies without language that explicitly excludes protected activity under the NLRA unlawful.

In addition, as part of its reasoning, the board criticized Costco’s policy for not having language which restricts its application. This suggests that a policy that provides context to restrictions by giving specific examples of prohibited conduct that is not protected by the NLRA, such as the use of profane language; malicious, abusive, or unlawful statements; or unlawful harassment, would be more likely to survive NLRB scrutiny.

The takeaway from this decision is that, even in a non-unionized work environment, vague and overbroad social-media policies restricting disparaging comments about the company or its employees will be found unlawful by the NLRB. Furthermore, disciplining an employee under such a policy could potentially lead to unfair-labor-practice charges and wrongful-termination claims.

In light of this decision, and given the fact that the language at issue is commonly found in employee handbooks, employers should carefully review their social-media policies and consult with their employment counsel to ensure that their policies do not contain broad prohibitions on employee conduct and are tailored to survive NLRB scrutiny.

 

Karina L. Schrengohst, Esq. specializes exclusively in management-side labor and employment law at Royal LLP, a woman-owned, SOMWBA-certified, boutique, management-side labor- and employment-law firm; (413) 586-2288; [email protected]

Court Dockets Departments

The following is a compilation of recent lawsuits involving area businesses and organizations. These are strictly allegations that have yet to be proven in a court of law. Readers are advised to contact the parties listed, or the court, for more information concerning the individual claims.

 

 

CHICOPEE

DISTRICT COURT

LVNV Funding, LLC, assignee of FIA card Services, N.A. v. Sweetwater Cycles

Allegation: Unpaid balance due for monies loaned: $27,629.29

Filed: 9/5/12

 

GREENFIELD DISTRICT COURT

Trans River Marketing Co., L.P. v. Whitney Trucking Inc.

Allegation: Non-payment of waste disposal services provided: $188,160.50

Filed: 8/29/12

HAMPDEN

SUPERIOR COURT

Hanibal Technology, LLC v. Spectrum Analytical Inc.

Allegation: Breach of loan agreement: $1,500,000

Filed: 8/27/12

 

Ocean State Job Lot v. Cobalt Industries Inc.

Allegation: Defendant has failed to pay subcontractors: $116,459

Filed: 9/4/12

 

SPRINGFIELD

DISTRICT COURT

Perlman Recycling Inc. v. Tri County Recycling

Allegation: Non-payment of goods sold and delivered: $9,874.99

Filed: 8/28/12

Agenda Departments

Understanding Your Company’s Cash Flow

Oct. 24: Your business runs on cash — cash in and cash out. At a workshop titled “Understanding Your Company’s Cash Flow,” presented by the Mass. Small Business Development Center Network, attendees can learn the basics of cash flow, how to manage cash-flow projections, the timing of cash inflows and outflows, how to improve a company’s cash flow, and how cash flow is different from profit. The workshop will take place at 10 a.m. at PeoplesBank, 330 Whitney Ave., Holyoke, and will be presented by Robb Morton of Boisselle, Morton & Associates in South Hadley. For more information, call (413) 737-6712.

 

Top Trends in Politics

Oct. 24: “Top Trends in Politics @Westfield State: a Round-table Discussion of What is Happening Now” will be staged at the Woodward Center on the Westfield State University campus starting at 7 p.m. A public reception begins at 6:30. The event is described as “an exploration of election year 2012 — the issues, candidates, strategies, and political climate” — and will feature six panelists. They include Douglas Brinkley, bestselling author of Cronkite, historian, and professor at Rice University; Hendrick Hertzberg, senior editor and political commentator for the New Yorker; Shannon O’Brien, former Massachusetts state treasurer and receiver general; Dan Thomasson, nationally syndicated columnist and former editor and vice president of Scripps Howard; Lowell Weicker, former U.S. senator and U.S. representative; and Westfield State University President Evan Dobelle. For more information, visit www.westfield.ma.edu

 

Rays of Hope Walk in Springfield, Greenfield

Oct. 28: As the nation observes Breast Cancer Awareness Month, thousands of walkers and runners will be hitting the pavement to support breast health in Western Mass. as part of the 19th annual Rays of Hope – A Walk Toward the Cure of Breast Cancer, and its accompanying 3rd annual Run Toward the Cure 8K. This year’s annual walk events, presented by Health New England, are set for Springfield and Greenfield, while the run is held only in Springfield. Last year some 21,000 combined walkers and runners from Springfield and Greenfield, including over 600 teams, participated in Rays of Hope. Since 1994, the program has raised $10.25 million, all of which has remained in local communities on behalf of patients and their families affected by breast cancer. The Springfield walk and run begin at Temple Beth El on Dickinson Street, with registration set for 9 a.m. The walk in Greenfield begins at Energy Park on Miles Street, with registration at 10 a.m. The Springfield walk steps off at 10:30 a.m., preceded at 10:15 a.m. by the run, and the Greenfield walk begins later at noon. Walkers in Springfield can choose from a two- or five-mile route. The shorter route is accessible to handicapped participants, while the five-mile stroll is a little more challenging with some hills. In Greenfield, participants can select a two- or three-mile route, both of which travel up Main Street before taking different directions. Participants can register for both the walk and run online at baystatehealth.org/raysofhope, where they can also create their own personal webpage to assist them in their fund-raising efforts. For the Springfield Walk, free parking with shuttle service is available at locations near Temple Beth El, including in East Longmeadow at American Saw and East Longmeadow High School, as well as in Longmeadow at Blueberry Hill School and Longmeadow High School, and at other locations found on the Rays of Hope website. Participants are asked to refrain from parking on the side streets near the temple. In Greenfield, free parking is available in the public lots behind Green Fields Market, on Chapman Street behind Wilson’s Department Store, behind the Franklin County Court House, and in the Freedom Credit Union parking lot. Walkers are asked not to park in the Wilson’s Department Store lot for the benefit of its customers. There is no shuttle service, as all lots are within walking distance of Energy Park. Handicapped parking is available at Temple Beth El and at Energy Park for those with an official handicapped parking permit and/or license plate only. No pets, other than service dogs, are allowed at either the Springfield or Greenfield locations.

 

Equity-financing Workshop

Oct. 31: For some new or small businesses, equity financing is the most appropriate way to bring required capital into the firm. This could be the case because the businesses are high-risk, high-growth, or in need of more startup and growth capital than can be supplied by other sources. At a workshop titled “Equity Financing for High Potential/High Growth Ventures,” presented by the Mass. Small Development Center Network, attendees can learn about this attractive financing option. The program will provide an overview of equity financing and answer questions such as, what qualifies a venture for equity financing? What are the biggest mistakes you can make and the smartest things you can do while seeking equity investment? What should the venture leadership team look like? What are equity investors looking for? What matters the most in seeking equity investment? What are the major reasons why a business is funded or not funded? How are equity deals structured? And how do you set a valuation for a new venture?

The workshop, to be presented by Peter Morton of the MSBDC Network, Central Regional Office, will take place from 11 a.m. to 1 p.m. at the Scibelli Enterprise Center, 1 Federal St. in Springfield. A light lunch will be provided. For more information, call (413) 737-6712.

 

HCC Fall Open House

Nov. 1: Holyoke Community College will stage its annual Fall Open House from 5 to 7 p.m. in the Kittredge Center for Business and Workforce Development’s PeoplesBank Room. Guests can learn about HCC’s nearly 100 degree and certificate programs, as well as the school’s comprehensive support, services, student clubs and activities, financial aid, and more. Applications for admission will be accepted at the event, and there will also be individual breakout sessions for financial aid and adult learners. The open house will feature a new segment called “Conversations by Division” beginning at 6 p.m. Guests will be assigned to a separate meet-and-greet based on their intended major, led by division teams. Each divisional conversation will be followed by a short question-and-answer session and then a student panel discussion. For more information, contact the Office of Admissions at (413) 552-2321 or [email protected].

 

Writer, Essayist to Speak

Nov. 5: Anne Fadiman, a writer, essayist, and author whose first book, The Spirit Catches You and You Fall Down, won her a National Critics Book Circle Award, will visit the region as part of the Ovations series, sponsored by the Chicopee Savings Bank Endowment for Academic Excellence, the STCC Office of Academic Affairs, and the STCC Honors Program. There will two performances, at 10:10 and 11:15 a.m., in Scibelli Hall. Both are free and open to the public. The Washington Post called Fadiman’s book “an intriguing, spirit-lifting, extraordinary exploration.” The Spirit Catches You and You Fall Down tells the story of Lia Lee, the daughter of Hmong immigrants from Laos, who was diagnosed with epilepsy in 1981. What follows is the story of a clash of cultures as well as an examination of the U.S. healthcare system. The book is often taught in university literary journalism courses across the country and serves as a casebook for cross-cultural sensitivity. Fadiman also is the author of Ex Libris: Confessions of a Common Reader and At Large and at Small: Familiar Essays. She currently resides in Whately and is a professor of English and writing mentor at Yale University. For additional information about the Ovations series, contact Philip O’Donoghue at (413) 755-4233 or [email protected].

 

Employment Law and Human Resources Practices Update

Nov. 8: The Employers Assoc. of the NorthEast will stage its annual Employment Law and Human Services Practices Update at the Holyoke Hotel and Conference Center (formerly the Holiday Inn). The conference, sponsored by Johnson & Hill Staffing Services, will address the challenging state and federal legal and regulatory environment for employers, and present practical solutions and information to guide employers in their day-to-day employment decisions. The conference is designed for all levels of management — executives, corporate counsel, human-resource professionals, managers, and supervisors — who need practical and timely information to help negotiate ever-evolving employment issues. Conference presenters will include Joel Berner, chief of Enforcement for the Mass. Commission Against Discrimination; Charles Krich, principal attorney for the Connecticut Human Rights Organization; attorney Elaine Reall; and attorneys from Skoler Abbott & Presser, P.C., and EANE. For more information, contact Karen Cronenberger at (877) 662-6444.

 

40 Under Forty Reunion

Nov. 8: BusinessWest will stage a reunion featuring the first six classes of its 40 Under Forty program at the Log Cabin Banquet & meeting House inn Holyoke. The event, open only to 40 Under Forty winners, event judges, and sponsors, will begin at 5:30 and feature a talk from Peter Straley, president of Health New England, about leadership and community involvement. For more information on the event, call (413) 781-8600, or e-mail [email protected].

Nonprofit Management Sections
Colleges Tout the Value of Degrees in Nonprofit Management

Melissa Morriss-Olson

Melissa Morriss-Olson says nonprofits increasingly recognize the need to be more business-savvy.

“No money, no mission.”

That’s a commonly heard saying in the Nonprofit Management and Philanthropy graduate program at Bay Path College, a catchphrase repeated by professors and absorbed by students, many of whom already work for nonprofit organizations.

“You have to be able to manage the bottom line to fund your mission,” said Melissa Morriss-Olson, a professor in the program and Bay Path’s provost and vice president for Academic Affairs. “If you lose sight of that, all the good you want to do is not going to happen. You can’t have one without the other.”

Nonprofit organizations face tough sledding these days — with the economy sluggish and societal needs on the rise, fund-raising and program implementation is more difficult than it used to be (see story, page 16), and nonprofits increasingly realize that to compete and thrive in this environment, they have to run like for-profit businesses. One way that trend manifests itself is a proliferation in college degree programs centered on nonprofit management.

“I had founded a similar program in Chicago, one of the first academic centers for nonprofit management in the country,” Morriss-Olson said. “At the time, there were maybe 30 graduate programs in that field, and now there are well over 100 — and more than 300 colleges offer some kind of course in nonprofit management.

“That increase reflects a growing awareness of the nonprofit sector,” she continued. “It used to be that you fell into a job in the nonprofit sector; now it’s a much more well-defined career path for people who want to work in the sector. It’s everywhere in our country; in this area alone, probably once a month, a new nonprofit is starting.”

Kathryn Carlson Heler, director of the Master of Business Administration (MBA) program at Springfield College, said such programs are attractive not only to executives and employees of nonprofits who want to advance their skills and improve their organizations, but young people and older career changers alike who are looking to launch new enterprises or take roles in established ones.

“It’s a wonderful time for people to get an education in the nonprofit world because there are so many upcoming openings in the field,” she noted. “So many of the executives are looking forward to retirement, and there’s no one behind them.”

That said, “I’ve found that a business background is a perfect background for people in the nonprofit realm, because a nonprofit is a business — a business with a mission — and having the knowledge and skills to run a business is so important.”

Bay Path and Springfield are two area schools that have created graduate programs in nonprofit management, launching their efforts in 2006 and 2010, respectively. In this issue, BusinessWest examines the different shades of such programs — and why nonprofits, and those who lead them, are starting to take notice.

 

Different Flavors

Bay Path actually offers two separate degree programs for nonprofit professionals and those who want to get into some aspect of that world.

“One is an MS in Nonprofit Management and Philanthropy, and one is an MS in Strategic Fundraising and Philanthropy,” Morriss-Olson said. “They are distinct, both in the type of student who enrolls and the careers that each leads to.

The MS in Nonprofit Management and Philanthropy, she noted, is geared toward those who see themselves in a management role, such as executive director, director of operations, or chief financial officer. “It gives you a really good foundation for understanding the unique management and operating context that nonprofits have.

“When I came here,” she explained, “rather than just taking the Chicago program and dumping it at Bay Path, we convened a group of about 30 nonprofit leaders in the region. We invited them to campus and discussed what they saw as the more critical leadership needs of their organizations. We took that and turned it into an advisory group, and the courses are a direct response to what those leaders told us.”

Class topics range from board governance to strategic management; from finances to law and policy matters.

“One of the biggest issues we heard is the need to know how to manage a double bottom line — being not only financially viable, but also effective in realizing the mission,” Morriss-Olson said. “In the business world, you just worry about the bottom line, but in the nonprofit world, that’s not enough. You need to be mission-driven but also smart from a financial perspective.”

That unique perspective, she explained, informs the foundation of all the courses offered. “That emphasis is the focus of every single course you take, so when you graduate, you really are schooled in management issues through the lens of that unique operating context.”

Bay Path’s other track in nonprofit education is an MS in Strategic Fundraising and Philanthropy, and it was developed after the first degree program after students began requesting more coursework in fund-raising,” she explained. The program certainly provides that, with classes in communication and relationships, donor behavior, grant writing and foundation relations, capital campaigns, planned giving, and more. “Fund-raising and getting revenue is so critical for these organizations, and they want to know as much about it as they can.”

Springfield College included Nonprofit Management as a concentration in its MBA program launched just two years ago. The track is attractive to people eyeing opportunities in health care, recreation, youth, the arts, sports, and as fund-development officers, to name just a few possible career paths.

In creating a two-pronged MBA program, “we looked at what areas would be common between a for-profit business and a nonprofit, and we have a number of courses that both types of students take,” Carlson Heler said. “Those include courses on entrepreneurship, financial management, accounting, economics, and marketing. And then there are a couple of areas that are very specific to nonprofits; one is fund-raising and philanthropy, and another is governance of an organization, so we developed courses that focus on those.”

The overlap is natural, she said, at a time when nonprofits need to become more bottom-line-driven to survive.

“Foundations and corporations that donate are beginning to say, ‘we want the nonprofits who receive our money to be run like a business; we don’t want our money to be wasted,’” she noted.

Citing the research of Dennis Young of Case Western Reserve University in Cleveland, Carlson Heler noted that there are two different classes of nonprofits. One comprises bodies that come together to meet an immediate need over a finite period of time; the groups that responded to Springfield’s tornado destruction last year are a good example.

“Then there’s the nonprofit that’s a real business. They need all those business skills because they’re competing not only for dollars, but also for customers.”

Even colleges that don’t specifically offer nonprofit management degrees recognize the overlap. David Stawacz, assistant vice president for Marketing and External Affairs at Western New England University, said MBA programs in general are valued in the nonprofit world.

“It’s the most recognized degree,” he said. “The skills you pick up in an MBA are readily transferable to running a nonprofit — strategic planning, qualitative analysis, leadership, finance, marketing, even organizational behavior. It’s not the same as running a for-profit business and going to shareholders, but you still need to have all those pieces of the puzzle in place.”

WNEU has seen the interests of the business and nonprofit communities interlock in other ways, too, including its eight-week Leadership Institute offered from February through April each year in conjunction with the Affiliated Chambers of Commerce of Greater Springfield.

“A lot of our MBA faculty teach the workshop. Once a week, people take one afternoon off a week and go downtown and focus on leadership and strategic thinking,” Stawacz said. “It’s open to all, and it was geared in the beginning toward business, but a lot of nonprofit organizations found it valuable, and it has grown quite popular with some of the nonprofits.

“It has a lot of the same principles behind an MBA, but in a much shorter time, with a much broader view of things,” he added. “In eight weeks, you can only accomplish so much, but there are definitely a lot of skills you can take back to a business or nonprofit. It also helps with networking opportunities between the nonprofit world and the business world.”

 

Moving On Up

Morriss-Olson said many nonprofit employees see a degree in philanthropy studies as a sort of career ladder.

“We get a lot of people, in both degrees, who have worked their way up, then got to the point where they realized they needed a graduate degree to jump to the next level. And we have executives who may not need the degree, but want to add to their experience,” she said, adding that they’re finding it to be a worthwhile endeavor.

“They tell me, ‘finally I’ve got a vocabulary to help me understand the work I’ve been doing all these years.’ The coursework has helped them frame their own experiences in a way they find very helpful.”

It also helps them develop new strategies for dealing with the myriad demands placed on nonprofits today.

For many just entering the field, she said, “what surprises them is how much time and attention they have to spend managing constituencies, whether it’s community leaders, board volunteers, donors, client families — it goes on and on. We have a course in the curriculum on board governance and volunteer management; it focuses on how to recruit and then effectively manage a board, but also how to effectively deal with the volunteers who will help you with your mission.”

But it’s not only established professionals who are signing up for the degree. “A number of our students want to start nonprofit organizations, and they’ve found that enrolling in this program is a great way to get help doing that,” she continued. “One of the wonderful things about our country is, if you have an interest and want to do some good, it’s very easy to get together and get state and federal recognition for your cause,” she said.

In either case, Morriss-Olson said, it helps that many courses are taught by actual nonprofit executives who bring real-world experience to the classroom. “That’s helping us marry theory to practice.”

Carlson Heler said enrollment in the nonprofit side of Springfield College’s MBA program is low, but growing steadily. “As I go around and talk about it, more and more individuals are interested in the degree and see its worth,” she said, adding, however, that efforts to boost the numbers encounter two problems.

“One is that the nonprofit world has, in the past, relied heavily on workshops and conferences to pass along the knowledge that is needed to run a nonprofit,” she explained, “and people have the attitude of, ‘well, I can just go to a workshop on how to do an audit, or a workshop on how to market my program,’ instead of thinking, ‘hey, how about a degree?’

“The second thing,” she continued, “is that it costs money to get a graduate degree. It can be expensive, and a lot of nonprofits do not have the funds to send their people back to school.”

She hopes that’s changing. “I have a wonderful student out of Connecticut who is an executive director; her board is paying her whole way because they do see the benefit.”

As those benefits become more apparent, expect enrollment to rise — not only locally, but across the country. After all, knowledge is power, and nonprofit organizations fighting for every dollar can never have too much of that.

 

Joseph Bednar can be reached at [email protected]

Court Dockets Departments

The following is a compilation of recent lawsuits involving area businesses and organizations. These are strictly allegations that have yet to be proven in a court of law. Readers are advised to contact the parties listed, or the court, for more information concerning the individual claims.

 

CHICOPEE DISTRICT COURT

Lois and Daniel Stratton v. Skinner Real Estate Services Inc., Ronald Czelusniak, and Martin Caproni

Allegation: Intentional and negligent misrepresentation in the sale of a home: $4,500

Filed: 9/4/12

 

GREENFIELD DISTRICT COURT

Ace Fire and Water Restoration Inc. v. 31 Ames Street, LLC and Thomas S. Sroczyk

Allegation: Non-payment of fire-restoration services: $13,517.65

Filed: 7/25/12

 

Denis Menard v. Quality Builders and Rick Ward

Allegation: Breach of contract for failure to construct roof and shingles in a good and workmanlike manner: $20,630

Filed: 8/31/12

 

HAMPDEN SUPERIOR COURT

Patricia Castagne v. MassMutual

Allegation: Employment discrimination: $25,000+

Filed: 9/14/12

 

Tawyna-Pitts Jones v. National Union Fire Insurance

Allegation: Non-payment of settlement: $5,000

Filed: 9/10/12

 

PALMER DISTRICT COURT

Janine McGahan v. BSF Construction and Harry Fett Jr.

Allegation: Monies owed for work paid for but not completed on a kitchen-remodel project: $16,580.96

Filed: 9/7/12

 

SPRINGFIELD DISTRICT COURT

Western Mass Electric v. New England Black Chamber of Commerce Inc.

Allegation: Non-payment of utility services: $4,027.26

Filed: 8/30/12

Construction Sections
When to Classify People as Independent Contractors

Employers beware. Hiring people as ‘independent contractors’ may provide a competitive advantage that seems tempting. However, the risks of misclassifying employees as independent contractors may far outweigh the benefits.

By classifying a worker as an independent contractor rather than an employee, a business may reap certain advantages. For example, the business may not be held vicariously liable to third parties in court for the negligent acts of an independent contractor as it would for an employee. The business may also avoid paying payroll tax, including the Federal Insurance Contribution Act (FICA) and Federal Unemployment Tax Act (FUTA), and also avoid payments toward state unemployment and workers’ compensation insurance. The business may also save substantial costs by not having to enroll the individual in any employee-benefit plans.

Unfortunately, the use of independent contractors carries with it the inherent risk that the federal or state government will determine that a business should have treated a particular person, or class of persons, as employees for tax, wage-hour, unemployment, workers’ compensation, or employee-benefit-plan purposes. To avoid running afoul of state and federal law regarding misclassification of workers, businesses need to examine their independent-contractor relationships, understand the risks, and consider taking appropriate steps to reclassify or restructure their relationships with these individuals.

In determining whether an individual is an employee or an independent contractor, the most important factor is the employer’s right to direction and control over the individual. The more direction and control that the employer has, the more likely it is that the individual will be deemed to be an employee. Some of the factors to consider are whether the employer sets hours, provides an office and equipment, and gives instructions on how to perform tasks as opposed to the individual making his or her own schedule, being self-directed, and furnishing his or her own equipment and supplies. This is the test that has traditionally been applied by the IRS to determine whether a worker is an employee or independent contractor for federal employment-tax purposes.

Many states, including Massachusetts, apply different tests for determining a worker’s status. The Massachusetts Independent Contractor Law (MICL) is among the strictest in the country and creates a presumption that an individual performing any service is an employee. To overcome this presumption, the party receiving services must establish that:

• The worker is free from its control and direction in performing this service, both under a contract and in fact;

• The service provided by the worker is outside the employer’s usual course of business; and

• The worker is customarily engaged in an independent trade, occupation, profession, or business of the same type.

The first part of the test looks at the degree of control and direction retained by the employer over the services performed by the individual. It is the employer’s burden to demonstrate that the services at issue are performed free from its direction or control and carried out with minimal instruction. An independent contractor completes the job using his or her own approach with little direction and dictates the hours that he or she will work on the job.

The second part of the test requires that the service the individual performs be “outside the usual course of business of the employer.” This requirement impacts any business that hires independent contractors to supplement its regular workforce. In 2003, for example, the Supreme Judicial Court of Massachusetts found that a newspaper had misclassified its newspaper carriers as independent contractors when the carriers were performing the usual course of business of the newspaper.

The third part of the test requires that the individual be customarily engaged in an independently established trade, occupation, profession, or a business of the same nature as that involved in the service performed. In other words, is the worker wearing the hat of an employee of the employing company, or is he or she wearing the hat of his or her own independent enterprise? This requirement may be difficult to satisfy if the independent contractor works only for one company.

The MICL is enforced by the Fair Labor Division of the Office of the Attorney General of the Commonwealth. The Attorney General’s 2008 advisory concerning the MICL states that an employer’s failure to withhold taxes, contribute to unemployment compensation, or provide workers’ compensation for an individual is not considered when analyzing whether an employee has been misclassified. Nor is the existence of an independent-contractor agreement (although, according to the attorney general, the MICL requires that all independent-contractor relationships be reflected in written agreements or job descriptions). In other words, just because an employer believes that a worker should be an independent contractor and treats that worker as such does not make it so in the eyes of the law.

The attorney general can issue civil citations and institute criminal prosecutions against businesses and individuals for both intentional and unintentional violations of the MICL. More significantly, private citizens may file civil actions in court for themselves and others similarly situated, claiming that they have been misclassified as independent contractors but are, in fact, employees entitled to all the rights and protections under the Massachusetts Wage Act. The Wage Act is a particularly potent weapon since it imposes personal liability on officers and managers of companies who violate its provisions, including the MICL. In addition, the 2008 amendments to the Wage Act require a court to award treble (three times) damages plus attorney’s fees and costs to an employee who prevails on his or her claim.

Misclassifying employees as independent contractors may also subject a business to:

• Income-tax liability for monies that should have been withheld from the ‘wages’ of the ‘employees’;

• Employer FICA and FUTA contributions;

• Potential overtime pay and other wage claim liability;

• State unemployment-insurance payments;

• Workers’ compensation insurance premiums and potential liability for workplace injuries; and

• Other civil and criminal liability. Additionally, workers may be entitled to coverage and benefits under existing employee benefit plans.

There are several approaches a business can take to address these risks. It might:

• Evaluate relationships with independent contractors to determine whether the classification is proper under the MICL three-part test;

• Review all written independent-contractor agreements and modify them where appropriate;

• Ensure that all independent-contractor relationships are reflected in written agreements or job descriptions correctly describing the relationship and the party’s respective obligations;

• Begin treating misclassified independent contractors as employees; and

• Maintain independent-contractor relationships but take steps to limit potential exposure (for example, ensure that no independent contractor works more than 40 hours per week so that the business does not face potential overtime liability).

 

Keith A. Minoff is a Springfield-based attorney specializing in employment law and business litigation; (413) 301-0866.

Court Dockets Departments

The following is a compilation of recent lawsuits involving area businesses and organizations. These are strictly allegations that have yet to be proven in a court of law. Readers are advised to contact the parties listed, or the court, for more information concerning the individual claims.

 

HAMPDEN SUPERIOR COURT

Alexander C. Richardson v. HSBC Bank, USA National Assoc., as trustee for Wells Fargo Home Equity Assets Backed Securities

Allegation: Chapter 93A damages for wrongful foreclosure without following statute: $100,000

Filed: 8/13/12

 

David Walczak v. Mass Central Railroad Corp.

Allegation: Negligent maintenance of railroad track causing plaintiff to be thrown from his bike: $35,509.91

Filed: 8/13/12

 

Norman Lloyd Jr. v. Adam Quenneville Roofing & Siding Inc.

Allegation: Failure to pay earned commission: $40,000

Filed: 8/20/12

 

Rachel L. Beiermeister v. Crackel Barrel Old Country Store Inc.

Allegation: Employment discrimination: $2,003,000

Filed: 7/31/12

 

HAMPSHIRE SUPERIOR COURT

Amhad Development Corp. v. Amherst Assoc. Development Inc.

Allegation: Breach of construction contract: $50,000

Filed: 7/12/12

 

Felix Perez v. Anthony’s Dance Club Inc., et al

Allegation: Negligence causing personal injury: $40,000+

Filed: 7/27/12

 

R.E. Laplante Construction Inc. v. Harold L. Eaton Associates Inc.

Allegation: Breach of contract to supply accurate land survey: $25,000+

Filed: 7/2/12

 

Ruth M. Braman v. Ian Modesto, D.M.D

Allegation: Negligence in extraction of 22 teeth: $100,000+

Filed: 7/13/12

 

Western Mass Recycled Metals v. ABC&D Recycling Inc.

Allegation: Breach of management and operation agreement: $125,000+

Filed: 8/3/12

 

SPRINGFIELD DISTRICT COURT

Liberty Mutual Insurance Co. v. Avery Investment Properties, LLC

Allegation: Balance due on workers’ compensation insurance policy: $43,272

Filed: 8/10/12

 

Polygon US Corp. v. Simard’s Family Restaurant

Allegation: Non-payment of labor and materials provided for water-damage restoration: $4,006.38

Filed: 8/10/12

 

West Springfield Auto Parts v. Brake King

Allegation: Non-payment of goods sold and delivered: $97,929.35

Filed: 8/14/12

 

West Springfield Auto Parts v. Rycorp Inc.

Allegation: Non-payment of goods sold and delivered: $51,565.21

Filed: 8/14/12

 

WESTFIELD DISTRICT COURT

Tighe & Bond Inc. v. Struever Bros. Eccles & Rouse Inc.

Allegation: Breach of contract and balance due for engineering services rendered: $36,513.89

Filed: 8/9/12

Banking and Financial Services Sections
The Growing Problem of Tax-return Identity Theft

One of the great scams being perpetrated today is what’s known as tax-return identity theft. Unscrupulous thieves are using stolen identities to prepare tax returns on behalf of unsuspecting individuals, and reaping thousands of dollars per false return filed.

How big of a problem is it? Treasury Inspector General Russell George said back in May that criminals who file fraudulent tax returns by stealing people’s identities could rake in an estimated $26 billion over the next five years because the IRS cannot keep up with the volume of the fraud. That’s a sobering figure.

How do you know if you have been subject to tax-return identity theft? Basically, after you file your actual tax return, you will get a letter from the IRS that says something like, “thank you for filing your tax return. However, we already received your tax return back in February.” That should trigger a big alert that something is seriously wrong. Residents of Puerto Rico have it even worse, since they don’t need to file a U.S. tax return unless they have U.S. activity. As such, when their identities are stolen for tax-return purposes, they don’t even get a warning letter, because they may not have had to file a U.S. tax return. Thus they don’t even know their identities were stolen in the first place. As a result, Puerto Rico has become a priority for the IRS.

The identity thieves basically make up everything on the tax return and prepare the return in such a way that a huge refund is expected. The refund is sent electronically, and the thieves now have loaded-up debit cards. The average theft appears to be in area of $5,000, and the aggregate problem is in the billions of dollars.

It is absolutely imperative that people be more diligent with respect to whom they provide their private and financial information. Further, it is more important than ever for businesses to be extra diligent in the safeguarding of that information. Massachusetts General Law CMR 17 mandates that organizations maintaining private information do so with strict accordance to the law. Therefore, ask how your lawyer, accountant, tax preparer, medical center, new or used car dealer, mortgage lender, bank, etc., safeguards your personal information.

I don’t believe it is unreasonable to predict that random, educational ‘spot testing’ by taxing authorities, in the form of actual physical visits, is in the future to help alleviate the hemorrhaging of personal information. As such, the best advice I can offer to everyone is to prepare to be able to explain to clients, customers, and the IRS, for that matter, exactly how you safeguard private information.

Here’s an example. Our office is on the top floor of our building, and there is no elevator access after working hours or weekends and holidays without an access key. Besides the small fortune we invested in electronic security, our office is equipped with motion alarms and continuously recording cameras. We have a camera in our file room. With the permission of our building owner, we even have cameras outside of our leased office space. That’s how serious we have become with security.

Although this whole issue is due to unscrupulous individuals, I believe both the IRS and the Commonwealth of Massachusetts bear some responsibility here. The rush to mandate e-filing for everyone obviously happened faster than the IRS and the Commonwealth’s ability to monitor it, as we can see from the epidemic of tax-return identity theft. At least with paper returns, W-2s were attached, and the returns were signed by taxpayers and preparers. Presently, none of these safeguards are required by thieves, and the proverbial rooster is in the electronic hen house.

Tax returns can be filed electronically from anywhere; interestingly, one of the great tax-return identity-theft operations originated out of the Dominican Republic. The only reason this operation was discovered was because several New York City postal employees were contracted by the thieves to deliver tax refunds to certain P.O. boxes. The only ones captured were the postal employees, because the organizers of the fraud were never caught.

Even the IRS inadvertently discloses personal information. I am personally aware of a very recent situation where an IRS letter was inadvertently sent to the wrong address. As a safeguard, the IRS letter indicated only the last four digits of the taxpayer’s Social Security number. The recipient wanted to do the right thing and wrote a letter to the IRS with a copy of the original letter, in the hopes that the IRS would understand that they had the wrong address. The IRS responded with a “thank you, we’ll get back to you” and, as an added bonus, provided the entire Social Security number of the taxpayer to this complete stranger. Now that is a very serious breach of security. We have notified the IRS Commissioner in Washington of this particular situation, and we hope we are able to help prevent an unfortunate security breach from occurring again.

Exempt organizations need to be more careful also. Lois Lerner, the IRS director of Exempt Organizations (and a Western New England University graduate), in a speech this past April at Georgetown University, warned about “an important issue of the day.” Between 2001 and 2006, more than 132,000 charities included at least one Social Security number on their tax returns. Those were the Social Security numbers of donors, trustees, employees, directors, scholarship winners, and the tax preparers themselves (the last of which is inexcusable, given the availability of preparer tax-identification numbers). Thus, make sure that any not-for-profit organizations that you are involved with aren’t revealing anyone’s private information, because once it’s on Guidestar, it’s public.

In summary, tax-return identity theft is real, and it’s going to be with us for a while. In the interim, it is imperative to be more diligent with your private information than ever before, ask more questions of those who maintain your private information, file your tax returns as early as possible (thus circumventing a theft), and, for business owners and professionals, treat your customers’ and clients’ private information as though it were currency, because, frankly, it now is.

Paul L. Mancinone is a principal with Paul Mancinone Co., P.C. in Springfield. His practice is primarily focused on taxpayer representation before federal and state agencies, and also has a recurring client base of individuals and business entities; [email protected]

Court Dockets Departments

The following is a compilation of recent lawsuits involving area businesses and organizations. These are strictly allegations that have yet to be proven in a court of law. Readers are advised to contact the parties listed, or the court, for more information concerning the individual claims.

 

HAMPDEN SUPERIOR COURT

Easthampton Savings Bank v. JRE Masonry & Restoration Inc. and Amanda and Jerome Ezold

Allegation: Failure to make payment on a revolving line of credit: $74,711.84

Filed: 7/17/12

 

Forish Construction Co. v. Dallaswhite Corp. and DeNardo Realty, LLC

Allegation: Defendant has failed to pay for services rendered and materials supplied: $132,329

Filed: 8/9/12

 

J.D. Contracting Inc. v. Seaver Construction Inc. and Berkley Surety Group, LLC

Allegation: Breach of contract for services, labor, and materials: $439,163.54

Filed: 7/31/12

HAMPSHIRE SUPERIOR COURT

Akiva Cahn-Lipman v. Smith College

Allegation: Breach of employment contract: $86,293.92

Filed: 8/2/12

 

DGA Realty, LLC v. University Motors, LLC

Allegation: Breach of lease agreement: $100,000

Filed: 7/12/12

 

M.J. Moran Inc. v. Standard Builders Inc., Amherst Inn Owner, LLC, and Amherst Inn Co.

Allegation: Breach of contract on construction project: $703,754.55

Filed: 7/16/16

 

Safe Environment of America Inc. v. G.V.W. Inc. and Berkley Regional Insurance Agency

Allegation: Failure to pay for asbestos and other environmental services provided: $600,000

Filed: 7/10/12

 

Collins Electric Co. Inc. v. Standard Builders Inc., Amherst Inn Owner, LLC, and Amherst Inn Co.

Allegation: Breach of construction-project contract: $811,503.44

Filed: 7/16/12

 

NORTHAMPTON DISTRICT COURT

Easthampton Savings Bank v. Core Chiropratic Clinic

Allegation: Default on revolving business credit note: $12,014.66

Filed: 7/6/12

 

SPRINGFIELD DISTRICT COURT

Dolliff & Co. Inc. v. Hampden Structural Systems Inc.

Allegation: Balance due for brokerage Services provided: $8,424.32

Filed: 8/9/12

 

Liberty Mutual Insurance Co. v. Performing Arts Building and Renovation

Allegation: Non-payment on workers’ compensation policy: $6,442.04

Filed: 8/10/12

 

Patmar Supply Inc. v. Duziem Laboratories

Allegation: Non-payment of goods sold and delivered: $6,375.16

Filed: 8/7/12

 

TD Banknorth, N.A. v. Vins Inc. and James Rothera Jr.

Allegation: Default on promissory note: $20,098.34

Filed: 8/6/12

 

United Rentals v. Hergon Design Inc.

Allegation: Non-payment for materials, equipment, and services on a construction project: $10,240.40

Filed: 8/14/12

 

WESTFIELD DISTRICT COURT

Tighe & Bond Inc. v. Fortis Property Group, LLC

Allegation: Breach of contract and balance due for engineering services rendered: $12,435.91

Filed: 8/9/12

Law Sections
And How Can I Get My Ex to Help Cover These Expenses?

Melissa R. Gillis

Melissa R. Gillis

If you divorced your ex-spouse when your kids were young, it is possible that you did not consider the funding of your children’s college education in your support order. Now that they are on the brink of college, you may be looking ahead to that considerable financial hurdle and wondering how you will be able to pay for it, and how to ask your ex-spouse to contribute their fair share. You may also be wondering how college will affect existing child-support payments.

Separation agreements and divorce judgments often don’t make a specific provision for how children’s college education will be funded, what percentage of the total cost each parent will pay, and what happens to weekly child-support payments as a result, which is entirely distinguishable from college contributions.

Instead, what is most commonly seen is ‘blanket language.’ That’s the language in an agreement or order that says child support is to be paid until a child is deemed emancipated, and once each child reaches the age of college, both parents will attempt to discuss with each other how college will be paid. They also agree to discuss which college each child will attend, given their aptitudes and desires. Parents also have an understanding that they must exchange financial information and cooperate with their child’s financial-aid office. Unfortunately, such blanket language often leaves parents confused as to what the nexus should be between their weekly child-support order and each parent’s college-contribution percentage.

Reaching that perfect balance between a weekly support order and college contribution can be tricky at best. Most parents paying weekly child-support orders pursuant to the child-support guidelines can’t pay both and don’t feel that they should have to. If there have been some college funds or accounts set aside to assist paying parents, an agreement or order should dictate whether those accounts are to be utilized prior to either parent contributing out of pocket, or whether the funds within the accounts are actually a part of the contribution that a parent will be required to make.

In the case where there is no fund set aside, and a parent is now being asked to pay both a weekly support amount and contribute to college, the typical paying parent begins to feel as though their weekly support is more like alimony. They fear that they are being set up for exactly that: a request for alimony once child support is over, creating a never-ending stream of payments to a spouse they haven’t been married to for years.

The best time to discuss how to pay for college and how this affects a weekly support order is certainly not when the first tuition payment is due, but the September of that child’s senior year of high school. By then, you probably know whether your child is going to apply to a community college, a state university, Harvard (or its cost equivalent), or something in between. This gives you a feeling for what the tuition will be, whether financial aid is necessary, and how much input each parent will or wants to have in the college-selection process.

If there is a required mediation clause in the parties’ agreement or judgment, then arguably you and your ex-spouse can wait until your child’s actual acceptance is received from the institution. But be careful not to set your child’s expectations too high if you know there is simply no way to afford a $40,000-per-year tuition bill even with loans. Being practical, reasonable, and knowledgeable of the law is the key to successful negotiations in this regard.

If you and your ex-spouse can’t work out how much each should contribute, what should happen to weekly child-support payments, whether to use any college savings or investment accounts first or last, and whether to require your child to apply for student loans, scholarships, and grants without court intervention, a modification action should be filed about eight to 10 months prior to the child’s entrance to college to allow adequate time for financial discovery. During this period, you and your ex-spouse may reach resolution, but in the event that you cannot, there is enough time to have a trial on the merits and receive the judge’s decision.

The statute governing periodic payments of child support from one parent to another provides that, between the ages of 18 and 21, a court can award child support if a child principally resides with the custodial parent and is principally dependent upon them for support, without any requirement that a child be attending college. Between the ages of 21 and 23, a court can still award child support if a child continues to principally reside and be dependent upon the custodial parent, but they must be pursuing further education, not to exceed a bachelors’ degree.

Because there is no ‘bright-line’ rule for how judges must treat weekly support orders if a parent is also ordered to contribute to college, this opens up myriad possibilities and differing judicial decisions. It should also be noted that the actual child-support guidelines are merely discretionary and arguably do not apply after a child reaches the age of 18.

Often, practitioners will run the guidelines for children over the age of 18 anyway to give the judge a suggestion of what could be and to perform an analysis of what some combination of weekly support payments and direct college contribution would look like, in an attempt to figure out how much extra the paying parent should be asked to contribute.

That said, the resulting possibilities are endless. Some judges use the ‘1/3, 1/3, 1/3’ approach, making the parents and the child each responsible for contributing one-third of the total, whether by loans or cash equivalent. Other possibilities include:

• A straight contribution to college, only if the child will spend approximately equal time living with each parent when home from school, with termination of the weekly support order;

• An order of straight continued weekly child support to the custodial parent if the other parent doesn’t have much contact with the child;

• A combination of reduced weekly support and a percentage of college funding, depending on whether the child will live at home and the ability of a parent to pay; or even

• Both continued weekly payments plus a substantial college contribution.

The above options will all be dependent upon additional factors, including whether there are remaining non-college-age children still in the home, the non-custodial parent’s ability to pay, and the custodial parent’s inability to contribute.

Any way it’s looked at, the message is clear. Absent an agreement, and given the amount of judicial discretion present, it is imperative that a parent facing this battle have a skilled lawyer in their corner who can advocate all the intricacies in order to best suit the needs of the child without breaking the bank of one or both parents or causing an undue burden on one parent because the other refuses to provide an adequate financial contribution to their child’s higher education.

 

Melissa R. Gillis, Esq. is an attorney with Bacon Wilson, P.C. in the domestic, special education, and real estate departments; (413) 781-0560; baconwilson.com/attorneys/gillis

Law Sections
Recent Decision Could Impact Financially Challenged Borrowers

James B. Sheils

James B. Sheils

A recent Court of Appeals decision interpreting the Bankruptcy Code may result in limiting the ability of struggling commercial borrowers to obtain replacement financing from a new lender.

TOUSA Inc. was the 13th-largest homebuilding business in the U.S., with operations in Florida and many other states. It incurred significant debt to expand its business, largely through acquisitions; one such purchase involved a Florida entity. While TOUSA had numerous subsidiaries, and those subsidiaries had guarantied other debt owed by TOUSA, the subsidiaries did not guaranty the debt incurred to the original lenders providing the Florida acquisition financing.

The economic downturn, especially affecting real estate, significantly impaired TOUSA’s business, including the Florida entity it had acquired. The original lenders who provided the acquisition financing brought suit; as part of a settlement, TOUSA borrowed in excess of $470 million from a group of new lenders, whose funds were used to pay the original lenders. As collateral for the rescue loan, the new lenders obtained guaranties from TOUSA’s subsidiaries, secured by the assets of those subsidiaries. Those assets constituted collateral which had not secured the original lenders’ financing.

Despite the new funding, TOUSA ultimately sought Chapter 11 protection. The security interests of the subsidiaries were challenged by the creditors’ committee as “fraudulent conveyances,” based upon a claim that the subsidiaries did not receive “reasonably equivalent value” in exchange for the liens granted to the new lenders. The subsidiaries had not received any loan proceeds, but the new lenders argued that the funding they provided allowed TOUSA, and as a result the subsidiaries, to continue in business, even if the business ultimately failed.

The Court of Appeals endorsed the original decision of the Bankruptcy Court that ‘fair consideration’ is a fact-based determination, and that the almost-certain costs of the new loan far outweighed any perceived benefits. An argument that the subsidiaries faced an existential threat absent the new loan was rejected; the court stated that not every transfer that decreases the risk of bankruptcy for a corporation can be justified. The decision almost certainly will result in increased caution by lenders where upstream guaranties are an integral component of the financing.

The loss of the liens securing the new lenders’ loans was not the only action addressed by the Court of Appeals. The Bankruptcy Court also required the original lenders to ‘disgorge’ (i.e. pay back) $403 million received from the new lenders. The disgorgement issue involved a discussion of Section 550 of the Bankruptcy Code, which deals with recovery of property if a ‘transfer’ is avoided, as was the case with TOUSA’s subsidiaries. Section 550 allows recovery of a transfer from the initial transferee or from an entity for whose benefit such a transfer was made. The original lenders had argued that, since the liens went to the new lenders, the original lenders were ‘subsequent transferees,’ not entities that benefited from the initial transfer. The Court of Appeals disagreed; the loan agreements with the new lenders required the loan proceeds to be paid over to the original lenders.

The case was remanded to the District Court for further action regarding damages; if the initial Bankruptcy Court decision is fully upheld, the unwinding of the refinancing will result in the disgorged funds to be first used to repay the transaction costs for the new loan, then the costs incurred by the creditors committee in bringing and prosecuting the challenge and any decline in the value of the collateral, all before any funds are returned to the new lenders.

The TOUSA decision could complicate the ability of financially challenged borrowers to stay out of Chapter 11 because it raises questions regarding the enforceability, in certain circumstances, of upstream guaranties and highlights risks to lenders who are paid off by a borrower. The benefit to the total enterprise can’t be assumed to provide sufficient consideration. It’s also likely to increase the scrutiny of debtors/trustees in connection with potential claims to include prior lenders who, it will be asserted, are included in the ‘for whose benefit’ language of Section 550 of the Bankruptcy Code.

It is possible that further appeals may be taken, or that the 11th Circuit Court of Appeals may decide to have the entire court consider the case (a so-called ‘en banc’ review), but for now, the tussle with TOUSA may have chilled the air a bit for lenders to distressed businesses.

 

Attorney James B. Sheils is a shareholder with Shatz, Schwartz and Fentin, P.C., and concentrates his practice in the areas of commercial finance law, creditors’ rights, banking law, and telecommunications siting matters; (413) 737-1131.

Law Sections
So What Does That Mean for Massachusetts Employers?

John S. Gannon

John S. Gannon

In its most significant decision of the year, and arguably the last decade, the U.S. Supreme Court recently upheld most of the Patient Protection and Affordable Care Act (PPACA), the controversial health care legislation also known as ‘Obamacare.’

But a blessing from the Supreme Court only seemed to take the health care debate to more contentious levels as Republican politicians, including presidential hopeful Mitt Romney, have promised to repeal the law. Even so, businesses cannot wait for a ceasefire in Washington. Employers must forge ahead and continue efforts to implement the law as provisions pertaining to the employer-employee relationship become effective.

 

The Court’s Ruling

At the forefront of the dispute over the PPACA’s legality was a constitutional challenge to the so-called individual mandate, which requires individuals to carry health insurance or pay a penalty. Opponents argued that Congress overstepped its authority when it enacted this part of the law. The Supreme Court majority disagreed, concluding that the individual mandate is a valid exercise of Congressional power to tax. “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” wrote Chief Justice John Roberts, author of the majority opinion.

Notably, the Supreme Court rejected the Obama administration’s principal argument in support of the individual mandate. Trying to avoid labeling the provision a tax, the government contended throughout that the mandate was a valid exercise of Congress’ power to regulate interstate commerce. That contention failed. “The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity,” declared Roberts. “Such a law cannot be sustained under a clause authorizing Congress to regulate commerce.”

Massachusetts is viewed by many as the birthplace of the individual mandate. The state health care reform law includes a similar provision requiring residents of the Commonwealth to carry health insurance or pay a fine, although the formula for calculating the penalty is different from the method used under federal law.

 

Next Steps for Employers

Now that the uncertainty surrounding health care reform has been resolved, at least from a legal perspective, employers must be prepared to comply with significant provisions of the PPACA that kick in over the coming months. Starting this year, employer-sponsored group health plans will need to provide employees with a summary of benefits and coverage (SBC), which must include certain coverage details. Insurance carriers may provide the SBC notification for fully insured group plans, but plan administrators will have to provide the notification for self-funded plans.

The PPACA also requires employers to report the aggregate cost of employer-sponsored health coverage on Forms W-2. Employers that filed more than 250 Forms W-2 for tax year 2011 must ensure that the cost of coverage is reported next year. Smaller employers may be off the hook until 2014.

Beginning Jan. 1, 2013, the PPACA limits employee contributions to an FSA to $2,500 per year. The $2,500 FSA cap applies only to employee pre-tax contributions to a health care FSA, and does not affect employer contributions toward health care premiums, health savings accounts, health reimbursement arrangements, or other similar accounts.

Looking Ahead

In addition, savvy employers should begin planning to implement parts of the law set to take effect in 2014, including an employer mandate that penalizes businesses for failing to offer adequate health-insurance coverage.

The controversial employer mandate kicks in a little over a year from now. Starting in 2014, employers with more than 50 full-time employees must provide a minimum level of health-insurance coverage or pay a $2,000 penalty per full-time employee. As noted above, this concept is not entirely new to Massachusetts employers, many of which have been required to provide health insurance to employees since 2006, when the Commonwealth enacted its own version of health care reform. However, Massachusetts employers need to be aware that the penalty for failing to offer coverage is far greater under federal law.

The PPACA also requires that the coverage be ‘affordable’ and provide ‘minimum value.’ Coverage is considered affordable if the employee’s required contribution does not exceed 9.5% of household income. An employer provides a ‘minimum-value’ plan if the plan covers at least 60% of the participant’s covered expenses. If the coverage fails to meet these requirements, the employer may be subject to an excise tax of $3,000 if an employee declines to enroll in the plan.

 

PPACA Uncertainty

Calls to repeal the PPACA will echo throughout the 2012 electoral season. But rescinding the law is no small task. For starters, it will almost certainly take a makeover in the Oval Office. Until that day comes, employers need to be sure they are in compliance with the provisions of the PPACA that are set to go into effect this year and next. They also need start planning for the critical employer mandate set for 2014.

 

John Gannon is an associate in the Springfield labor and employment law firm of Skoler, Abbott & Presser, P.C., which represents employers exclusively and specializes in helping employers understand their obligations under state and federal employment law; (413) 737-4753; [email protected]

Agenda Departments

Massachusetts Chamber Business Summit

Sept. 9-11: The Massachusetts Chamber board of directors will conduct its annual Business Summit and Awards Ceremony at the Resort and Conference Center at Hyannis. The two-day meeting allows participants to meet with business professionals from across the state, as well as listen to state and local elected officials who will discuss the future of business in Massachusetts. Additionally, representatives from the Mass. Office of Economic Development will discuss loans, grants, and tax incentives available to business owners. Industry experts will also be on hand to discuss topics such as leveraging social media, search-engine optimization, and health care cost containment. The winners of the Business of the Year Award and the Employer of Choice Award will also be announced during the summit. For more information, call (617) 512-9667 or visit www.masscbi.com.

 

The Big E

Sept. 14-30: From live music and parades to sea lions and a circus, there’s something for everyone at the Big E. Country music artist Rodney Atkins will play a concert at the outdoor Comcast Arena Stage on Sept. 23 at 7:30 p.m. The Big E’s Mardi Gras Parade returns to the fair with eight custom-made floats specially designed and built by the Kern Companies of New Orleans. The Big E Super Circus features aerial daredevils the Marinofs, the wonder dogs of David Rosaire’s Perky Pekes, the equilibristic ability of Dany Daniels and Edina, comedy, and more. In addition, the Big E will feature a show with the Peking Acrobats, horse shows, the U.S. Freestyle Motocross National Championship series, hypnotist Catherine Hickland, the Sea Lion Splash show, and much more. Look for details and show times at www.thebige.com. Gates open each day at 8 a.m., and building exhibits are open 10 a.m. to 10 p.m. The Avenue of States is open 10 a.m. to 9 p.m., Storrowton Village is open 10 a.m. to 9 p.m., Craft Common is open 10 a.m. to 10 p.m., and the Midway is open Sunday through Friday, 11 a.m. to 10 p.m., and Saturdays, 10 a.m. to 11 p.m.

 

World Affairs Council Annual Meeting

Oct. 10: Hampshire College President Jonathan Lash will speak at the World Affairs Council of Western Mass. Annual Meeting & Dinner in the Mahogany Room of the Springfield Sheraton Hotel in downtown Springfield. More details will be forthcoming. Lash is an internationally recognized expert on practical solutions to global sustainability and development challenges. Before he became president of Hampshire College in 2011, he served as president of World Resources Institute (WRI), an environmental think tank with offices in eight countries and partners in more than 50 countries. WRI is an international leader on issues ranging from low-carbon development to sustainable transportation. From 1993 to 1999, Lash was co-chair of the President’s Council on Sustainable Development, a group of government, business, labor, civil-rights, and environmental leaders appointed by Bill Clinton that developed visionary recommendations for strategies to promote sustainable development. He played a key role in the creation and success of the U.S. Climate Action Partnership, which in 2007 issued the highly influential “Call to Action” on global warming. Prior to WRI, Lash held posts as director of Vermont Law School’s Environmental Law Center, Vermont secretary of Natural Resources, and Vermont commissioner of Environmental Conservation, as well as a federal prosecutor. For more information on the event, call (413) 733-0110.

 

Western Mass.

Business Expo

Oct. 11: BusinessWest will again present the Western Mass. Business Expo. The event, which made its debut last fall at the MassMutual Center in downtown Springfield, will feature more than 180 exhibitors, seminars, special presentations, breakfast and lunch programs, and the year’s most extensive networking opportunity. Comcast Business Class will again be the presenting sponsor of the event. Details, including breakfast and lunch agendas, seminar topics, and featured speakers, will be printed in the pages of BusinessWest over the coming months. For more information or to purchase a booth, call (413) 781-8600, e-mail [email protected], or visit www.wmbexpo.com.

 

40 Under Forty Reunion

Nov. 8: BusinessWest will stage a reunion featuring the first six classes of its 40 Under Forty program. Details on the event will be forthcoming. What is known is that it will be staged at the Log Cabin Banquet & Meeting House in Holyoke, and will be open only to 40 Under Forty winners, sponsors, and their guests, as well as judges of the first six contests. For more information on the event, call (413) 781-8600, or e-mail [email protected].

Court Dockets Departments

The following is a compilation of recent lawsuits involving area businesses and organizations. These are strictly allegations that have yet to be proven in a court of law. Readers are advised to contact the parties listed, or the court, for more information concerning the individual claims.

CHICOPEE DISTRICT COURT
Air Distribution Corporation v. Curry Realty, LLC and Curry Automotive, LLC
Allegation: Plaintiff asserts its mechanics lien rights for materials provided in a construction project owned/leased by the defendants: $20,330
Filed: 7/25/12

Lisa Pereira v. Hampton Inn
Allegation: Negligent maintenance of property causing slip and fall: $3,343.12
Filed: 7/19/12

FRANKLIN SUPERIOR COURT
Donald K. Carew v. Riverside Industries Inc. and Carolyn M. Dineen
Allegation: Motor vehicle negligence and personal injury: $45,906.85
Filed: 6/13/12

LaMountain Brothers Inc. v. Pan Am Southern, LLC
Allegation: Action to enforce a mechanics lien upon the property of the defendant: $91,733.33
Filed: 6/17/12

HAMPDEN SUPERIOR COURT
Carol and John Walsh v. New Tradition Millwork Inc.
Allegation: Breach of construction agreement: $29,692
Filed: 6/21/12

Edward and Joan Haley v. Verizon New England Inc.
Allegation: Placement of utility poles without owner’s consent: $2,800
Filed: 6/28/12

Hampden Bank v. Patient Edu, LLC
Allegation: Non-payment of promissory note: $1,175,000
Filed: 6/25/12

Isabel and Jose Sanchez v. Hani Haddad, M.D. and Valley Women’s Health Group, LLV
Allegation: Medical malpractice: $25,000+
Filed: 6/25/12

Lillian Colon, as administratrix of the estate of Jose Colon v. The Mardi Gras
Allegation: Negligence in security causing wrongful death when the decedent was shot and killed by another patron of the Mardi Gras: $1,000,000+
Filed: 6/26/12

PALMER DISTRICT COURT
Camerota Truck Parts v. L.J.R. Trucking, Inc. and Robert Levesque
Allegation: Failure to pay for goods provided and breach of contract: $10,299.95
Filed: 7/6/12

SPRINGFIELD DISTRICT COURT
A-Tech Commercial Parts & Service Inc. v. Kentucky Fried Chicken
Allegation: Non-payment of goods sold and delivered: $7,483.22
Filed: 6/21/12

Baystate Elevator Company v. Western New England University
Allegation: Non-payment of labor and materials for repair and maintenance of elevators: $8,760.00
Filed: 7/31/12

Bradco Supply v. C.S. Alexander Inc.
Allegation: Non-payment on promissory note: $3,910
Filed: 7/6/12

Perkins Paper Inc. v. Chez Josef Inc.
Allegation: Non-payment of goods sold and delivered: $4,075.64
Filed: 6/25/12

Sesac Inc. v. Skyplex
Allegation: Breach of performance license agreement: $6,160.07
Filed: 7/5/12

Agenda Departments

NEBA Golf Tournament
Aug. 26: New England Business Associates (NEBA) will host a golf tournament on at Tekoa Country Club in Westfield. Proceeds from the tournament will benefit NEBA’s skills-training, supported-employment, academic-achievement, and self-employment programs for individuals with disabilities. The tournament will begin with a shotgun start at 1 p.m., and an awards and dinner ceremony will follow the finish. Sponsorship opportunities are available, and all golfers will have an opportunity to participate in contests and win prizes. To participate in the tournament and/or become an event sponsor, visit neba.eventbrite.com or contact David Parkinson, tournament director, at (413) 821-9200, ext. 145, or [email protected].

Massachusetts Chamber Business Summit
Sept. 9-11: The Massachusetts Chamber board of directors will conduct its annual Business Summit and Awards Ceremony at the Resort and Conference Center at Hyannis. The two-day meeting allows participants to meet with business professionals from across the state, as well as listen to state and local elected officials who will discuss the future of business in Massachusetts. Additionally, representatives from the Mass. Office of Economic Development will discuss loans, grants, and tax incentives available to business owners. Industry experts will also be on hand to discuss topics such as leveraging social media, search-engine optimization, and health care cost containment. The winners of the Business of the Year Award and the Employer of Choice Award will also be announced during the summit. For more information, call (617) 512-9667 or visit www.masscbi.com.

World Affairs Council Annual Meeting
Oct. 10: Hampshire College President Jonathan Lash will speak at the World Affairs Council of Western Mass. Annual Meeting & Dinner in the Mahogany Room of the Springfield Sheraton Hotel in downtown Springfield. More details will be forthcoming. Lash is an internationally recognized expert on practical solutions to global sustainability and development challenges. Before he became president of Hampshire College in 2011, he served as president of World Resources Institute (WRI), an environmental think tank with offices in eight countries and partners in more than 50 countries. WRI is an international leader on issues ranging from low-carbon development to sustainable transportation. From 1993 to 1999, Lash was co-chair of the President’s Council on Sustainable Development, a group of government, business, labor, civil-rights, and environmental leaders appointed by Bill Clinton that developed visionary recommendations for strategies to promote sustainable development. He played a key role in the creation and success of the U.S. Climate Action Partnership, which in 2007 issued the highly influential “Call to Action” on global warming. Prior to WRI, Lash held posts as director of Vermont Law School’s Environmental Law Center, Vermont secretary of Natural Resources, and Vermont commissioner of Environmental Conservation, as well as as a federal prosecutor. For more information on the event, call (413) 733-0110.

Western Mass.
Business Expo
Oct. 11: BusinessWest will again present the Western Mass. Business Expo. The event, which made its debut last fall at the MassMutual Center in downtown Springfield, will feature more than 180 exhibitors, seminars, special presentations, breakfast and lunch programs, and the year’s most extensive networking opportunity. Comcast Business Class will again be the presenting sponsor of the event. Details, including breakfast and lunch agendas, seminar topics, and featured speakers, will be printed in the pages of BusinessWest over the coming months. For more information or to purchase a booth, call (413) 781-8600, e-mail [email protected], or visit www.wmbexpo.com.

40 Under Forty Reunion
Nov. 8: BusinessWest will stage a reunion featuring the first six classes of its 40 Under Forty program. Details on the event will be forthcoming. What is known is that it will be staged at the Log Cabin Banquet & Meeting House in Holyoke, and will be open only to 40 Under Forty winners, sponsors, and their guests, as well as judges of the first six contests. For more information on the event, call (413) 781-8600, or e-mail [email protected].

Departments Incorporations

The following business incorporations were recorded in Hampden, Hampshire, and Franklin counties and are the latest available. They are listed by community.

AGAWAM

Squires Bistro Inc., 161 Main St., Agawam, MA 01001. Frederick C. Withee, 111 Cottonwood Lane, Agawam, MA 01001. Bistro/restaurant.
 
ATHOL

North Quabbin Trails Association Inc., 100 Main St., Athol, MA 01331. Robert Curley, 329 Bearsden Road, Athol, MA 01331. To sustain and work toward outdoor trail development, maintenance, and improvements, and to create stewardship with other
outdoor organizations, groups, and individuals to further this goal.

CHICOPEE

Out of Wood Inc., 291 Burnette Road, Chicopee, MA 01020. Phil Karwonski Jr.,
55 Yvette St., Chicopee, MA 01020. To engage in the sale and service of bowling equipment and supplies.

Yankee Auto Sales Inc., 162 Chicopee St., Chicopee, MA 01013. Russel R. Foisy, 16 Lathrop St., South Hadley, MA 01075. Used auto sales.

GREENFIELD

Smith Ventures Inc., 73 River St., First Floor, Greenfield, MA 01301. Tyler S. Smith, same. E-commerce.

HOLYOKE

Gilburg Global Enterprises Inc., 88 Westfield Road, Holyoke, MA 01040. Karen L. Gilburg, same. E-commerce.

LEE

Genesis of Lee Inc., 980 Pleasant St., Lee, MA 01238. Khandubhai Patel, same. Hotel.

LUDLOW

HK Collections Inc., 78 Glenwood St., Ludlow, MA 01056. Hanil Kang, same. The operation of a debt-collection agency.

LONGMEADOW

Goldsmith, Katz & Argenio, PC., 1350 Main St., Suite 1505, Springfield, MA 01103. Jonathan R. Goldsmith, 104 Fairhill Dr., Longmeadow, MA 01106. Law practice.
 
 
NORTHAMPTON

Igualidad as Friends of the Paulo Freire Social Justice Charter School Inc., 67 Woodlawn Ave., Northampton, MA 01060. Janet M. Sheppard, same. To provide educational and financial support to the children at the Paulo Freire Social Justice Charter School.

PITTSFIELD

J. Allen’s Clubhouse Grille Inc., 15 Marcella Ave., Pittsfield, MA 01201. David Powell, same. Restaurant.

SOUTHAMPTON

The Greater Easthampton St. Patrick’s Day Committee Inc., 22 Pomeroy Meadow Road, Unit 1, Southampton, MA 01073. Nancy L. Lech, same.

SPRINGFIELD

Accountable Care Clinical Services, P.C., 354 Birnie Ave., Springfield, MA 01107. Phillip F. Gaziano M.D.,16 Peak Road, Wilbraham, MA 01085. Practice medicine.

Campus Neighbors of Springfield MA Inc., 15 Birchalnd Ave., Springfield, MA 01119. Shawn Corbitt, 69 Ashland Ave, Springfield, MA 01119. Nonprofit corporation.

CHC Realty Manager Inc., 1145 Main St, Springfield, MA 01103. Elizabeth Glenn. 664 Roosevelt Ave., Springfield, MA 01109. Domestic profit corporation.

Hampden Investment Corporation II, 19 Harrison Ave., Springfield, MA 0110. Glenn S. Welch, 55 Rosewood Dr., Suffield, CT 06078. Security corporation status under Massachusetts general laws.

Hidden Capitol Group Inc., 1350 Main St., Springfield, MA 01103. Christopher Lessard, same.

Iglesia Pentecostal Jehova-Jireh Inc., 712 Dwight St., Holyoke, MA 01040. Jaqueline Villanueva, 1375 Dwight St., Springfield, MA 01109. Church.

Keep Youth Dreaming and Striving Inc., 1498 Plumtree Road, Springfield, MA 01119. Latoya Bosworth, 43 Pearl St., Chicopee, MA 01013. Charitable organization dedicated to making contributions to tax exempt 501(c)3 organizations.

Naranjan Inc., 55 Briarwood Ave., Springfield, MA 01118. Sukhbrir Kaur, 22 Hopkins Dr., New Haven, CT 06512. Restaurant.

One Source General Contractors Inc., 36 Colonial Ave., Springfield, MA 01109. Dennis Forbes, same. General contractor.

SOUTH HADLEY

IQRA Inc., 24 Michael Dr., South Hadley, MA 01075. Amir Paracha, same.
 
LBLeasing Inc., 27 Hadley St., outh Hadley, MA 01075. Carol D. White, Same. Leasing of vehicles.

TURNERS FALLS

Humphrey Garden Design and Landscape Inc., 8 Burnett St., Turners Falls, MA 01376. Kevin Humphrey, same. Landscaping service.

WEST SPRINGFIELD

1st Stop Café Inc., 369 Walnut St. Ext., Agawam, MA 01001. Jennifer K. Haile, 55 Irving St., West Springfield, MA 01089. Coffee shop and restaurant.

F.T.N. Realty Inc., 1424 Piper Road, West Springfield, MA 01089. Thomas J. Nault, same. Own, rent, lease, and manage real estate.

WESTFIELD

Bahre’s Cure Cancer Concerts, Corp., 40 Pinewood Lane, Westfield, MA 01085. Jason E. Bahre Sr., same. Non-profit organization established to host public concerts to raise money/donations, which will be donated to the American Cancer Society.

Complete Tax Service Inc., 85 Reservior Ave., Westfield, MA 01085. Shelley Hope Lacross, same. Bookkeeping and tax-preparation services.

Mancino Farms Inc., 354 North Road, Westfield, MA 01085. Joeseph A Mancino, Same. Farming with retail sales.

TCIS Inc., 83 Ridgecrest Dr., Westfield, MA 01085. James C Tierney, Same. Private investigation services.

Banking and Financial Services Sections
Some of the Old Rules May Not Apply When it Comes to 2013
Jim Barrett

Jim Barrett

By JAMES W. BARRETT, CPA/PFS, MST

Once tax filings are taken care of for the prior year, there is always the temptation to tuck current taxes away until the end of the year, when the tendency is to focus on tax strategies that can be executed quickly because of the short period of time remaining.
It would be prudent to take a moment before summer gets into full swing to focus on strategies that may take a little more time to implement but have the potential to reap significant tax savings.
Tax circumstances can change with a single event. Life events, such as marriage or divorce, the birth or death of a family member, retirement, relocation, or a job change, will generally alter your tax position, often dramatically.
Conventional wisdom is to avoid paying taxes for as long as possible by accelerating deductions and/or deferring income. But conventional wisdom may not apply in 2012. Two ominous tax clouds loom on the horizon for 2013, adding a significant level of uncertainty and reducing the value of traditional planning techniques.
The most broadly applicable change is the imminent expiration of the so-called Bush-era tax cuts. The scheduled arrival of the new 0.9% tax on earned income and 3.8% tax on investment income, enacted to pay for the 2010 health care legislation, also should not be overlooked.
We recognize that tax planning requires you to consider a series of unknown future events. Educated guesses and reasonable assumptions go a long way, but keep in mind that no tax strategy is final until the time for changing course has passed.

Planning in Times of
Tax-rate Change
Intentionally raising taxable income in the current year is contrary to the long-standing general guidelines to tax planning. Historically, tax planning has focused on accelerating deductions into the current year and deferring income into future years. But, with rates scheduled to increase, what has worked in years past may not produce the best tax outcome for the future.
The basic framework to help shape your overall income-tax planning in 2012 is as follows:
• If you expect to be in a higher income-tax bracket in 2013, consider accelerating income into 2012 and deferring deductions to 2013.
• If you are forecasting a lower income-tax rate in 2013, reverse the strategy: consider deferring income and accelerating deductions.
This year and going forward, keep in mind that the focus should always be on your marginal tax rate, the highest rate at which your last, or marginal, dollar of income will be taxed. Even though overall tax rates may rise in the future, if your income will be substantially lower in 2013 than in 2012, your marginal tax rate may decrease under the graduated-tax-bracket system.
It’s also important to keep in mind a couple of additional key income-tax concepts while mapping out tax techniques for 2012:

Alternative Minimum Tax:
In years you are subject to the alternative minimum tax (AMT), your deductions may be limited. If you anticipate being subject to AMT in either 2012 or 2013, consider timing those deductible expenditures limited under the AMT regime to maximize deductibility.
Standard Deduction:
If you expect to claim the standard deduction in either 2012 or 2013, shift itemized deductions into the year in which you will not claim the standard deduction to take full advantage of the deductions.

Rising Tax Rates
Individual income-tax rates are set to rise on Jan. 1 of next year to a top rate of 39.6%, a 13% increase over the customary rates in recent years. In addition, limitations on both itemized deductions and personal/dependency exemptions are scheduled to return for 2013, potentially raising the income-tax rate another three to four percentage points for taxpayers subject to these limitations.
Further still, dividends are set to once again be taxed as ordinary income in 2013. The 15% rate enjoyed on qualified dividends for a number of years could potentially become a 39.6% rate. The top tax rate on long-term capital gains is also set to increase by roughly one-third to 20%.

Provision 2011 2012 2013
Ordinary Income Rates 10.0% No Change 15.0%
15.0% No Change  15.0%
25.0% No Change  28.0%
28.0% No Change 31.0%
33.0% No Change 36.0%
35.0% No Change 39.6%
Long Term Capital Gains 15.0% No Change  20.0%
Qualified Dividends 15.0% No Change 39.6%
AMT Exemption – Single 48,450 33,750 No Change
AMT Exemption – Married 74,450 45,000 No Change

Unfortunately, the increasing rate news does not end here; since the Supreme Court did not overturn the health care legislation, the tax impact of the legislation begins in 2013.
Taxpayers with modified adjusted gross income above $200,000 ($250,000 on a joint return) will be subject to two additional taxes:

Hospital Insurance:
A 0.9% hospital insurance (HI) tax will apply to earned income, such as wages.
Unearned Income Medicare Contribution:
A 3.8% unearned income Medicare contribution (UIMC) tax will apply to investment income, including interest, dividends, and capital gains.

For taxpayers above the threshold, the impact of these two new taxes will be broad-reaching. With the addition of the UIMC, the top rate for long-term capital gains will rise by more than 50% to 23.8%, while the top ordinary income rate will rise by more than 15% to 40.5%.
Planning now may reduce the tax burden in years to come, and the timing and composition of earnings become critical. Potentially, a bonus from your company during 2012 instead of 2013 or a 2013 capital transaction accelerated into 2012 could save significant tax dollars. With uncertainty in these rates — and all tax rates this year — midyear may not be the time to initiate the transaction, but it is an ideal time to lay the foundation.
Although the new health care taxes apply to most types of earned (HI tax) and unearned (UIMC tax) income, the new taxes will not apply to retirement-plan distributions, IRA payouts, or tax-exempt income, such as interest from state and local government bonds.
Increases in tax rates are generally adverse for most taxpayers, but with increased rates comes increased value in your deductions, making this a great year to strategize with your tax adviser about the best timing for your deductions.
Here are some 2012 and 2013 planning points to consider if the new health care taxes go into effect Jan. 1, 2013:

Mind the Income Threshold: If you expect that your 2013 modified adjusted gross income (MAGI) will be close to, or just above, the $200,000 (single filer) or $250,000 (joint filers) threshold, you may be able to avoid the HI and UIMC taxes by accelerating income into 2012. The UIMC tax applies only to taxpayers who have both net investment income and MAGI above the threshold amounts.
Adjust Your Investment Portfolio: Seek out investments that produce tax-exempt or tax-deferred income, such as non-dividend growth stocks, tax-deferred annuities, and state or local government bonds. Since it may take time to realign your portfolio, you may want to start well in advance of Jan. 1, 2013.
Spread the Gain:
Installment reporting spreads the investment income from the gain on a sale over a period of years, reducing MAGI and deferring recognition of the investment income. However, electing out of installment reporting in 2012 results in gain recognition before the higher tax rates go into effect.
Transfer Investments to Family Members: Although your children’s investment income may be taxed at your marginal tax rate under the ‘kiddie-tax’ rules, an unmarried child is subject to the UIMC tax only if the child’s MAGI exceeds $200,000. You may be able to use a family limited partnership or other technique to spread some of your investment income among your children prior to Jan. 1, 2013.

Planning Your Estate and Gifts
Absent congressional action, the $5.12 million estate-tax exemption and current top tax rate of 35%, in place for 2012, will revert to a $1 million exemption with a top tax rate of 55% beginning Jan. 1, 2013. Moreover, the estate-tax exemption will no longer be portable between spouses.
With the lifetime gift exclusion also at $5.12 million for the rest of 2012, there exists what could be a once-in-a-lifetime opportunity to transfer significant assets to the younger generation without incurring any wealth transfer taxes. On Jan. 1, 2013, the lifetime gift-tax exclusion is scheduled to revert to $1 million.
Along with the high gift-tax exemption, the generation-skipping transfer-tax exemption is also $5.12 million during 2012. So the door is open to bypass children and defer the impact of estate taxes for many years into the future.
It’s uncertain where the estate-tax exemption and tax rates will end up in future years. And with the expiring provisions, it’s a good idea to review your plan to ensure that it is up to date.
Legislation proposed in Congress limiting valuation discounts attributable to minority interests or lack of marketability also potentially affects wealth transfer. The tax cost of gifts could increase should the changes be enacted.
Since these rules have not yet gone into effect, planning potential remains. Before transferring interests in family businesses or family limited partnerships, consult with your tax adviser to discuss potential tax and valuation pitfalls.
The gift-tax annual exclusion remains at $13,000 per donee, or recipient, for 2012. With gift splitting, spouses can transfer up to $26,000 to each person before the lifetime gift-tax exclusion comes into play.
Gifting techniques you may want to consider this year include:
• Outright gifts to family members;
• Transfers to family members through a family limited partnership; and
• Transfers in trust, including irrevocable life-insurance trusts, defective grantor trusts, and charitable trusts.
Following are a series of other tax-planning opportunities to consider:

Timing of Payments
Reviewing your withholding and planned quarterly estimated tax payments now provides the flexibility to adjust payments to limit or prevent penalties and manage cash flow.
Underpaying your taxes over the course of the year will subject you to underpayment penalties, which can be reduced or eliminated by increasing your withholding or quarterly estimated tax payments. A quirk in the penalty rules treats withholding, even if it occurs late in the year, as if it had been taken evenly throughout the year, making it a powerful planning tool for individuals.
On the flip side, why remit payment too soon when you can invest those funds until April 15, 2013? As long as you will not be subject to an underpayment penalty, consider holding on to your cash as long as possible by cutting back on your withholding or lowering your remaining quarterly estimated tax payments.

Retirement Funding
You can reduce your current tax obligations and help save for your retirement in a tax-efficient manner by contributing to a tax-qualified retirement plan. Qualified plans provide tax deferral — or tax avoidance, in the case of Roth accounts — on earnings until you receive distributions.
The earlier you make the contribution, the sooner your tax-deferred or tax-free earnings begin. If you already have a retirement plan in place, consider funding it as soon as possible to allow funds to start growing now.
To qualify for a tax deduction in 2012, your retirement plan generally must be in place before the end of the year. Exceptions are IRA and SEP (simplified employee pension) plans, which can be set up and funded through April 15, 2013.
Establishing a new retirement plan requires thoughtful decision-making. Small employers (generally those with 100 or fewer employees) that set up a qualified retirement plan may be eligible for a tax credit of up to $500 per year for three years. The credit is limited to 50% of the qualified startup costs.
The following contribution limits, along with the catch-up contribution limits for those 50 and older, apply for the 2012 tax year:

Limit Limit w/Catch Up
401(k) 17,000 22,500
IRA 5,000 6,000
Simple IRA 11,500 14,000
Self-Employed 50,000 55,500

Individuals with earned income, including alimony, are generally eligible to contribute to traditional IRAs. Claiming a deduction for your contribution is another matter. It depends on your income and whether you or your spouse is covered by an employer-sponsored retirement plan.
If neither you nor your spouse are covered by an employer’s plan, you may deduct your contribution to your traditional IRA. If you or your spouse are an active participant in an employer-sponsored plan, the deduction for your IRA is phased out at adjusted gross income (AGI) levels:

Filing Status  AGI Phase-out Range
Single 58,000 – 68,000
Married filing jointly 92,000 – 112,000
Married filing separately 0 – 10,000
Spousal IRA 173,000 – 183,000

 
Many taxpayers find the long-term benefits of contributing to a Roth IRA or a Roth 401(k) outweigh the short-term financial benefits of tax-deductible contributions. While Roth contributions are not tax-deductible, none of the income earned in the Roth account will have tax consequences unless there are early distributions, in which case penalties may apply. In addition, the Roth account is not subject to the required minimum distribution rules that apply when you reach age 70.
Eligibility to contribute to a Roth IRA depends on the amount of your income level. Contributions are allowed if your modified adjusted gross income for 2012 is between $110,000 and $125,000 for singles or between $173,000 and $183,000 for joint filers.
You can still roll your retirement savings from your traditional IRA or other qualified retirement plan into a Roth IRA. However, you must pay tax on the rollover amount. Unlike in past years, income limits no longer apply to Roth rollovers.
You might want to consider a Roth rollover in 2012 if you expect to be subject to the unearned income Medicare contribution tax in future years. Although distributions from a traditional IRA are not subject to the UIMC tax, taxable IRA distributions increase your modified adjusted gross income. If your MAGI exceeds the $200,000/$250,000 threshold, your investment income will be subject to the UIMC tax.
By rolling over your traditional IRA to a Roth IRA in 2012, you will recognize the additional income before the UIMC tax goes into effect. Once you have had a Roth IRA account in place for five years, future distributions from the Roth IRA will be non-taxable and will not increase your modified adjusted gross income.
If you own a business, you may be able to avail yourself of a defined-benefit type of retirement plan. These plans often allow higher retirement contributions than other types of plans. The higher retirement benefit must be weighed against the additional cost of providing comparable retirement benefits for your employees.

Charitable Contributions from IRAs
The tax rule allowing those over age 70 to make charitable contributions from their IRA without the need to include the distribution in income expired at the end of 2011. Making these contributions directly was generally advantageous because it didn’t raise the contributor’s income for limits on itemized deductions and certain phaseouts.
Although Congress has a track record of reinstituting expired tax provisions and applying them retroactively, it is certainly not guaranteed. If you are confident that you want to make the donation regardless of the tax treatment, you can still transfer the contribution directly from your IRA to the qualified charity. If Congress decides to retroactively reinstate the donation rule, the transfer will be excluded from income just as under the pre-2012 rule.
If Congress does not reinstate the rule, any charitable donation made from your IRA will be treated in the same manner as a donation made from any other source. The distribution from the IRA will be recognized as income, and the contribution will be included on your return as an itemized deduction. While the deduction should offset the income, the benefit will not be as great as it would have been if the income had not been recognized in the first place.

Employee Health Plans
If you are not currently providing health coverage for your employees, a tax credit for small businesses may make the cost of purchasing this coverage more affordable. The maximum credit is 35% of the premiums paid by the employer.
To be eligible for the credit, the employer generally must contribute at least 50% of the total premium. The full credit is available for employers with 10 or fewer full-time equivalent employees (FTEs) and average annual wages of less than $25,000. Partial credits are available on a sliding scale to businesses with fewer than 25 FTEs and average annual wages of less than $50,000.

New Employees
Congress extended the Work Opportunity Tax Credit for employers that hire eligible unemployed veterans after Nov. 22, 2011 and before Jan. 1, 2013. The credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 for tax-exempt organizations.
The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, the hours a veteran works, and the amount of first-year wages paid. Employers who hire veterans with service-related disabilities may be eligible for the maximum credit.
If you own a business and have children, consider putting them to work during summer vacation or after school. You will be able to deduct their wages as long as you make their pay commensurate with what you would pay a non-family employee for the same services. For 2012, they can earn as much as $5,950 and pay zero income tax. If they earn $10,950 and contribute $5,000 to a traditional IRA, they will also pay zero income tax.

Capital Expensing
Generous expensing rules apply to most non-real-estate assets acquired and placed in service during 2012. The expensing election limit under Section 179 is set at $139,000 if the total amount of qualified asset purchases does not exceed $560,000. The deduction is available for most business equipment, furniture, and off-the-shelf computer software.
There are limits to the Section 179 deduction, including a requirement that the deduction not cause or increase a taxable loss. But the 50% bonus depreciation election, also available through the end of 2012, can cause or increase a taxable loss.
The key to qualifying for these enhanced deductions is that the asset must be placed in service by Dec. 31, 2012. Just ordering or paying for the asset is not enough. Considering the time it may take to identify the appropriate equipment, obtain competitive bids, order the product, have it assembled and shipped, and then get it installed and operational, now may be the time to begin the acquisition process.
With tax rates on personal income scheduled to rise in 2013, those who operate businesses as S corporations, partnerships, LLCs, and sole proprietorships will have to consider carefully whether to take advantage of the enhanced business deductions available for assets placed in service during 2012. Particularly for assets with shorter depreciable lives, forgoing the enhanced deductions for 2012 may result in more tax savings in 2013 and later years.
No one can predict the future, and predicting future actions of Congress is particularly hazardous. Congress can — and all too often does — change the tax law at a moment’s notice.
Tax planning is an ongoing process. Saving taxes is generally a good strategy, but making a bad business, investment, or personal decision just to save some tax dollars is never a good strategy.

James Barrett is managing partner of Meyers Brothers Kalicka in Holyoke; (413) 536-8510; [email protected]

Court Dockets Departments

The following is a compilation of recent lawsuits involving area businesses and organizations. These are strictly allegations that have yet to be proven in a court of law. Readers are advised to contact the parties listed, or the court, for more information concerning the individual claims.

CHICOPEE
DISTRICT COURT
TBF Financial, LLC v. JSLC Corp., and Sandra and Joseph Marlin
Allegation: Breach of lease agreement: $21,378.06
Filed: 6/15/12

HAMPDEN
SUPERIOR COURT
Aaryn Blain v. Porterhouse Media
Allegation: Breach of contractual agreement: $25,000+
Filed: 5/8/12

Country Development Corp. v. Colorful Creations Bead Co. Inc. and Patricia and Stanley Pawlowicz
Allegation: Breach of lease agreement: $77,643.88
Filed: 5/2/12

Jenco Property Maintenance Services v. ITT Power Solutions d/b/a Exelis
Allegation: Breach of contract for snow plowing: $450,000
Filed: 5/18/12

John J. Walczak v. Turley Publications
Allegation: Breach of contract: $25,000
Filed 5/31/12

Michelle Michaels v. Superior Oxygen Systems Inc. and Inova Lab Inc.
Allegation: Failure to pay promissory notes: $150,000
Filed: 5/23/12

Rafal Lasiuk v. Liquor Town
Allegation: Action for monies had and received, unjust enrichment, and fraud: $96,817.50
Filed: 5/11/12

Shawntell Lee Waldon, administratrix of the estate of Aaron Lavanta Waldon v. Helsant Inc. d/b/a LACE
Allegation: Careless and improper security and maintenance at Club 418, causing wrongful death: $500,000+
Filed: 5/16/12

HAMPSHIRE
SUPERIOR COURT
Eclipse Manufacturing Inc. v. Gillespie Corp.
Allegation: Non-payment of monies loaned: $60,000
Filed: 5/23/12

Felix Perez v. Anthony’s Dance Club
Allegation: Negligent hiring and supervision, causing personal injury: $40,000
Filed: 5/15/12

R.E. Laplante Construction Inc. v. Harold L. Eaton Associates Inc.
Allegation: Breach of contract to supply land survey: $25,000
Filed: 5/29/12

NORTHAMPTON
DISTRICT COURT
American Express Bank FSB v. Pitt-singer P&H and Donald R. Pittsinger
Allegation: Non-payment on previous judgment: $10,759.23
Filed: 5/27/12

Constellation Newenergy Inc. v. Stop n’ Save
Allegation: Non-payment of services rendered: $8,342.50
Filed: 5/17/12

Eastern Brothers, LTD, d/b/a Black River Produce v. Sunflower Inc., d/b/a Green Street Café and John A. Sielski
Allegation: Non-payment of goods sold and delivered: $10,666.94
Filed: 6/14/12

Santa Buckley Energy Inc. v. Volkswagon of Northampton
Allegation: Non-payment of services and goods: $7,016.38
Filed: 6/1/12

WESTFIELD
DISTRICT COURT
Cach, LLC v. Daval Home Services Inc. and Keith G. Roy
Allegation: Breach of credit-card agreement: $16,840.11
Filed: 5/25/12

Departments People on the Move

Mark R. Tolosky

Mark R. Tolosky

Mark R. Tolosky, president and CEO of Baystate Health, was recently awarded the prestigious 2012 William L. Lane Hospital Advocate Award from the Mass. Hospital Assoc. (MHA) in recognition of his “exceptional leadership.” During his 20-year tenure at one of the largest health systems in New England, Tolosky has helped transform Baystate Health into one of the Top 15 health care systems in the country, as recognized by Thomson Reuters. Lynn Nicholas, president and CEO of the MHA, noted that Tolosky “has driven the transformation of the North End of Springfield into a vibrant ‘medical mile,’ constructing new facilities, creating jobs, improving the local community, and contributing to the economic development of the city.” Nicholas added, “under Tolosky’s leadership, Baystate Health and Health New England are also nationally recognized for top levels of quality and safety, most notably through advances made in clinical care, the adoption of health-information technology, and the development of team-based and patient-centered medical homes.” Each year at the association’s annual meeting, the MHA publicly acknowledges one senior hospital executive who exemplifies exceptional leadership and the characteristics to which all hospital and health system leaders should aspire. Tolosky was nominated by Richard B. Steele Jr., chairman of the Baystate Health Board of Trustees, and his senior leadership team at Baystate Health. “Mark sets a stellar example as a CEO who tirelessly advocates for improvement, inclusion, responsibility, preparation, taking the high road, and the importance of collaborative, positive relationships,” noted one letter in support of Tolosky’s nomination. According to Nicholas, it was the first time in the nine-year history of presenting the award that the MHA executive committee was unanimous in its selection.
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Eugene J. Cassidy

Eugene J. Cassidy became the seventh CEO of the Eastern States Exposition (ESE) in its 95-year history on June 27. He joined ESE as Director of Finance in 1993, and was named Executive Vice President and Chief Operating Officer in March 2011. He succeeded Wayne McCary, who retired June 26 after 21 years at the helm of the West Springfield institution. “The Big E is a balance of agriculture, industry, and entertainment all designed to move the core mission of the exposition forward while retaining the roots on which it was built,” said Cassidy. He is accredited as a certified fair executive by the International Assoc. of Fairs and Expositions (IAFE) and is actively involved as a member of the budget and finance and program committees. He is a frequent presenter at IAFE meetings on the local, regional, and national levels and served as program chair of the organization’s International Convention in Las Vegas in 2010. Cassidy began his career at KPMG Peat Marwick in Springfield. He then served as treasurer of Chicopee Cooperative Bank and Colonial Mortgage Co. and was assistant vice president of Park West Bank and Trust Co., all wholly owned subsidiaries of Westbank Corp.
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Andrea Robitaille, P.E., recently joined Tighe & Bond Inc. as a Project Engineer. She brings to that position eight years of professional experience with the firm’s expanding structural-engineering team. Robitaille has provided bridge design and inspection, construction design, and transportation-planning services for numerous clients and projects throughout New England.
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David Kalman, M.D. was recently promoted to President of Springfield Medical Associates, a multi-specialty group gractice with locations in Springfield and Enfield. Kalman has been a practicing gastroenterologist since 1927.
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Amy Royal

Amy Royal

Amy Royal, founding partner of Royal LLP, the Northampton-based woman-owned boutique, management-side labor and employment law firm, has been invited to speak at the ExecuSummit 7th Annual National Employment Practices Liability Insurance Conference at Mohegan Sun in Uncasville, Conn. in October. She will present on minimizing emotional-distress damages in employment-litigation claims.
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Danielle Nicklas

Danielle Nicklas

Danielle Nicklas, an attorney with the Springfield-based firm Cooley, Shrair P.C., has been appointed to serve on the Mass. Bar Assoc. (MBA) Health Law Section Council. Each council is charged with formulating and recommending policy and legislative positions, developing CLE program content for the MBA, and producing articles for Section Review and/or Lawyers Journal. Nicklas focuses her practice on the area of health law with a concentration in health care compliance, risk management, Start, and anti-kickback regulations.
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Kevin Hart

Kevin Hart

Holyoke-based Mohawk Communications announced that Kevin Hart has joined the staff as Director of Operations. Hart has more than 15 years experience in the telecommunications field, from high-end PBX systems, to fiber installation, to managing communication networks for mid- to large-sized businesses. He will be managing the customer service department along with the outside technicians and various other projects.

Agenda Departments

NEBA Golf Tournament
Aug. 26: New England Business Associates (NEBA) will host a golf tournament on at Tekoa Country Club in Westfield. Proceeds from the tournament will benefit NEBA’s skills-training, supported-employment, academic-achievement, and self-employment programs for individuals with disabilities. The tournament will begin with a shotgun start at 1 p.m., and an awards and dinner ceremony will follow the finish. Sponsorship opportunities are available, and all golfers will have an opportunity to participate in contests and win prizes. To participate in the tournament and/or become an event sponsor, visit neba.eventbrite.com or contact David Parkinson, tournament director, at (413) 821-9200, ext. 145, or [email protected].

Massachusetts Chamber Business Summit
Sept. 9-11: The Massachusetts Chamber board of directors will conduct its annual Business Summit and Awards Ceremony at the Resort and Conference Center at Hyannis. The two-day meeting allows participants to meet with business professionals from across the state, as well as listen to state and local elected officials who will discuss the future of business in Massachusetts. Additionally, representatives from the Mass. Office of Economic Development will discuss loans, grants, and tax incentives available to business owners. Industry experts will also be on hand to discuss topics such as leveraging social media, search-engine optimization, and health care cost containment. The winners of the Business of the Year Award and the Employer of Choice Award will also be announced during the summit. For more information, call (617) 512-9667 or visit www.masscbi.com.

World Affairs Council Annual Meeting
Oct. 10: Hampshire College President Jonathan Lash will speak at the World Affairs Council of Western Mass. Annual Meeting & Dinner in the Mahogany Room of the Springfield Sheraton Hotel in downtown Springfield. More details will be forthcoming. Lash is an internationally recognized expert on practical solutions to global sustainability and development challenges. Before he became president of Hampshire College in 2011, he served as president of World Resources Institute (WRI), an environmental think tank with offices in eight countries and partners in more than 50 countries. WRI is an international leader on issues ranging from low-carbon development to sustainable transportation. From 1993 to 1999, Lash was co-chair of the President’s Council on Sustainable Development, a group of government, business, labor, civil-rights, and environmental leaders appointed by Bill Clinton that developed visionary recommendations for strategies to promote sustainable development. He played a key role in the creation and success of the U.S. Climate Action Partnership, which in 2007 issued the highly influential “Call to Action” on global warming. Prior to WRI, Lash held posts as director of Vermont Law School’s Environmental Law Center, Vermont secretary of Natural Resources, and Vermont commissioner of Environmental Conservation, as well as as a federal prosecutor. For more information on the event, call (413) 733-0110.

Western Mass. Business Expo
Oct. 11: BusinessWest will again present the Western Mass. Business Expo. The event, which made its debut last fall at the MassMutual Center in downtown Springfield, will feature more than 180 exhibitors, seminars, special presentations, breakfast and lunch programs, and the year’s most extensive networking opportunity. Comcast Business Class will again be the presenting sponsor of the event. Details, including breakfast and lunch agendas, seminar topics, and featured speakers, will be printed in the pages of BusinessWest over the coming months. For more information or to purchase a booth, call (413) 781-8600, e-mail [email protected], or visit www.wmbexpo.com.

40 Under Forty Reunion
Nov. 8: BusinessWest will stage a reunion featuring the first six classes of its 40 Under Forty program. Details on the event will be forthcoming. What is known is that it will be staged at the Log Cabin Banquet & Meeting House in Holyoke, and will be open only to 40 Under Forty winners, sponsors, and their guests, as well as judges of the first six contests. For more information on the event, call (413) 781-8600, or e-mail [email protected].

Briefcase Departments

Paid Sick Leave Sent to Study by Lawmakers
BOSTON — Backers of a bill that would require certain employers to offer workers earned paid sick leave acknowledged in recent months that it would be an uphill battle to get the legislation passed this session. They were proven right when the Joint Committee on Health Care Financing sent the bill to a study, according to the House clerk’s office, effectively killing its chances of becoming law this session, with the Legislature planning to recess at the end of July. The paid sick-leave bill was drafted by state Rep. Cheryl Coakley-Rivera and released favorably this year from the Labor and Workforce Development Committee co-chaired by the Springfield Democrat. Paid sick-leave benefits for workers have become a perennial issue on Beacon Hill, backed by a broad coalition of organizations and lawmakers who argue that legislation would improve productivity, reduce turnover in the workplace, and drive down health care costs by allowing people to seek primary care during the day rather than visiting emergency rooms after hours. Many business groups, however, including the Massachusetts Chamber of Commerce, warn that forcing employers to provide certain benefits could discourage hiring at a precarious time for the economy. Coakley-Rivera’s bill would have allowed workers at companies with more than 10 employees to earn up to seven paid sick days a year, while employers with between six and 10 employees would have been required to allow employees to accrue up to five paid sick days. Business, however, strongly resisted mandating sick leave, warning the bill could cost the economy as many as 12,000 jobs and claiming that such policies are best established by employers.

Construction Employment Stagnates in June
ARLINGTON, Va. — Construction employment stalled in June as more former construction workers left the industry, according to an analysis of new federal data released by the Associated General Contractors of America. The lack of current job openings, along with the departure of experienced workers, suggests a potential skilled-labor shortage may be developing, construction association officials warned. “Employment in the construction industry has fluctuated within a very narrow range — 1% above or below the June level of 5.5 million — for more than two years now,” said Ken Simonson, the association’s chief economist. While the latest figure was 14,000 higher than one year earlier, the June 2012 total was just 2,000 higher than in May and in June 2010. “Construction employment has essentially been stagnant for much of the past two years.” Meanwhile, the unemployment rate for former construction workers fell to 12.8%, the lowest June rate since 2008 and much better than the 15.6% rate in June 2011 or the 20.1% rate in June 2010, Simonson noted. He added that, over the past two years, nearly 750,000 experienced workers have either found jobs in other industries, returned to school, retired, or otherwise left the workforce. “It will be hard for construction firms to get those skilled workers back when demand picks back up.” There was little difference among construction segments in terms of recent job gains or losses, Simonson noted. Residential construction added 1,700 total jobs in June and 8,900 (0.4%) over 12 months. Non-residential construction firms lost 600 jobs in June but added 4,300 (0.1%) over 12 months. Within the residential segment, residential specialty trade contractors added 7,600 jobs for the month and 14,100 (1.0%) over the past year, reflecting ongoing strength in multi-family construction. In contrast, residential builders — mostly single-family homebuilders — lost 5,900 positions in June and 5,200 (–0.9%) over 12 months. Non-residential job gains for the year were concentrated among non-residential building contractors, which lost 1,000 jobs in the latest month but added 4,300 (0.7%) over 12 months. Heavy and civil-engineering construction firms shed 2,000 jobs in June and 1,800 (–0.2%) in the past year. Non-residential specialty trade contractors boosted employment by 2,400 since May but only 1,800 (0.1%) since June 2012. Association officials noted that one bright spot for the industry was the 27-month highway and transit bill the president recently signed into law. They said the legislation includes many significant reforms that will allow more existing transportation funds to be invested in highway and transit construction projects, as opposed to unrelated programs. “This measure will certainly help staunch the decline in construction employment among highway and transportation builders,” said Stephen Sandherr, the association’s chief executive officer. “Congress understands that investing in infrastructure is one of the best ways to support growth within the private sector.”

Summit Focuses on Academic Advising
SPRINGFIELD — More than 70 community-college faculty and advisors met at the Springfield Technical Community College (STCC) campus to participate in an academic advising summit on June 22 to focus on advising as a collaborative approach. The summit workshops explored national best practices in academic advising, apprised academic advisors of National Academic Advising Assoc. (NACADA) services and resources that support more effective academic advising, and detailed how to improve both individual academic-advising skills and overall campus academic programs. Sessions included topics about career exploration and advising tools, introduced advisors to the Advising Is Teaching program, and discussed important updates to advising software. Keynote speaker Susan Kolls, associate director of Student Account Services at Northeastern University and a member of the NACADA board of directors, said students today are faced with a variety of challenges. They work hard both in and outside the classroom balancing school, work, and families; they struggle with financial issues; and many are in the military, often finishing their schoolwork while in the combat zone. “We’re looking at the whole student,” said Kolls. “None of our students are only students, and if we don’t look at the things that impact them, if we only look at the academic side, we can’t help them with the things outside of school.” Knowing a student’s background, Kolls said, can help advisors understand how a student is better, or less, able to cope with their situation. Through her interactive session, Kolls questioned how to get faculty, staff, and advisors to think about all of the contributing factors that impact a student’s success. According to Kamari Collins, STCC’s director of Academic Advising, the summit allowed advisors from the region to get together and start a conversation. “It was a good way to have everyone focus and strengthen our campus as a whole, and it was a great opportunity for us to share our best practices with our colleagues at the other community colleges.” The summit, made possible through the Board of Higher Education’s Vision Project Performance Incentive Grant, was available to the four community colleges in the Western Mass. Vision Project Exchange: Berkshire Community College, Greenfield Community College, Holyoke Community College, and STCC. This was the first time STCC has hosted the summit.

Hiring Lukewarm in June
NEW YORK — Hiring was lukewarm last month, with employers adding jobs but not enough to bring the unemployment rate down. The economy added 80,000 jobs in June, the U.S. Labor Department reported, barely an improvement from the 77,000 jobs added in May. Meanwhile, the unemployment rate remained at 8.2%. Economists surveyed by CNN Money had expected to see employers add 95,000 jobs and the unemployment rate to remain unchanged. The labor market has been volatile this year, with job growth starting off strong in the first couple months of 2012. Then a disappointing slowdown in the spring led many to wonder whether the recovery was taking a turn for the worse. June’s weak growth added to those fears. The economy needs at least 125,000 jobs added each month just to keep up with population growth. Revisions from previous months also showed the economy gained 1,000 fewer jobs in April and May than originally thought. Overall, the job market has a long way to go to climb out of the deep hole left by the financial crisis. Of the 8.8 million jobs lost, only about 3.8 million have been added back. Roughly 12.7 million Americans remain unemployed, and 41.9% of them have been so for six months or more. Another 88 million out-of-work people were not even counted as unemployed because they didn’t look for a job in the last four weeks.

Opinion
Fueling the Next Wave of Biotech Growth

The staggering impact of the nationwide economic malaise has caused every state to examine what it can do to attract the industries that will drive sustainable growth over the long term. We were reminded once again of why the life-sciences industry in Massachusetts is the envy of states across the country — and why we can’t become complacent about it — when 15,000 biotech professionals from 65 countries descended on Boston for the BIO Convention last week.
The local economy has undergone a remarkable transformation in the past two decades, as industries that once dominated the local landscape have been reduced to a shell of what they once were, and newer, technology-driven industries have grown to fill the void. The life-sciences industry has experienced unprecedented growth during that time, buoyed by a unique combination of local assets, including world-class universities and hospitals; substantial federal funding for research; a strong, local venture-capital community that understands the vagaries of our industry; and, more recently, the active involvement and support of the Commonwealth.
Employment at Massachusetts biotechnology companies has grown more than 50 percent over the past decade, to nearly 50,000, and even managed to grow during the depths of recession from 2007 to 2010. The average salary of a biotech worker is more than $95,000, substantially higher than the estimated state average salary of approximately $54,000. And with construction cranes looming not just over Cambridge and the Boston waterfront, but also reaching well out into the suburbs, Central Mass., and the South Coast, it is clear that investment and optimism in the future of the industry in Massachusetts remain strong.
But it was evident at the convention how dangerous it would be to become complacent. Other states and countries were there competing to lure away our state’s biotech companies and talent. They have many tactics at their disposal, including strong financial incentives, tax breaks, lower labor costs, and, in some cases, a fairly convincing argument about quality-of-life benefits outside of our state.
I experienced this first-hand as CEO of Organogenesis Inc., a biotechnology company based in Canton that has successfully developed two regenerative medicine products that use human cells to stimulate the body’s natural ability to repair and regenerate itself.
When we began planning five years ago to expand our operations, our top choice was Massachusetts. But when other states offered us incentive packages that topped what was initially offered here, we couldn’t help but listen. When we were offered a package of incentives that would potentially make us more competitive and more sustainable, we were set to leave the state and expand elsewhere.
A lot has changed since that time, for Organogenesis and for Massachusetts. We are now in the midst of a major, multi-year expansion that will more than triple the size of our presence in Canton, to more than 300,000 square feet. Our global headquarters, R&D, and manufacturing facilities will remain in Massachusetts. The decision to remain and grow here was driven primarily by incentives provided by the state under its 10-year, $1 billion Life Sciences Initiative, signed into law in 2008. Massachusetts has provided us with grants, low-interest loans, and a competitive tax rate, and we in turn have invested five times that amount to build our new facilities. We are delivering on the pledge to create hundreds of new jobs in the years ahead.
The state’s investment in the future of Organogenesis made a critical difference at a crucial time in our history. Dozens of Massachusetts companies are wrestling with the same questions about long-term growth and sustainability. The competitive race for growing industries like ours will only get tougher.
With all that has been done to make Massachusetts a more attractive magnet for biotechnology, we will constantly be challenged to stay one step ahead of the competition.

Geoff MacKay is president and CEO of Organogenesis Inc., and chairman of the MassBio board of directors.

Features
BusinessWest Slates a 40 Under Forty Reunion for November

The 40 Under Forty class of 2012 has been saluted — see a photo montage of the June 21 gala at the Log Cabin starting on the facing page — bringing to 240 the number of people who are now in a rather exclusive club in Western Mass.
And with that critical mass, BusinessWest has decided that it’s time to bring the band back together, to steal a line from The Blues Brothers, with a reunion, slated for November 8, that will likely be the first of many, said Kate Campiti, the magazine’s associate publisher.
“Several people have suggested some type of reunion, and we were already thinking about how it would be great to bring the first classes of winners back together,” said Campiti, adding that the event will be a celebration of what is still very young talent in the four western counties of Western Mass., as well as a very unique networking experience, and perhaps a learning opportunity — organizers, including several past winners, are considering high-profile speakers from the world of business to address the group.
Details of the event will be forthcoming in the weeks and months ahead, said Campiti, adding that some things are known. The date is Nov. 8, the venue will be the Log Cabin Banquet and Meeting House, chosen for both its fine service and central location in Western Mass., and the guest list will be limited to the 240 winners, event sponsors, and program’s judges.
“‘Forty Under 40’ has become a symbol of excellence in this region, something people strive to achieve,” said Campiti. “And with six classes of winners, there is now a large, somewhat exclusive fraternity, if you will, that is quite diverse. But the members share one important quality — they’re all leaders — and it’s exciting to think about what can happen when you bring that many leaders together in one room.
“There is already a sense of camaraderie and mutual respect among the winners,” Campiti continued. “You can see this at the gala each year; people will note that someone is a previous winner and usually strike up a conversation.”
And more importantly, she went on, winners have done business with one another, sought out each other’s advice on matters, and, in general, shared opinions on the challenges and opportunities our region is facing.
“And bringing that much talent, that much insight, together can only be good for this area,” she continued, noting that the 40 Under Forty constituency now includes everything from partners in major law firms to a state senator; from thriving entrepreneurs to a high school senior — Stephen Freyman, class of 2011; from a host of non-profit managers to a police sergeant.
“The diversity and collective brain power present at a 40 Under Forty gala is amazing,” said Campiti. “Imagine what bringing six classes of winners together will be like.”
On Nov. 8, no one will have to imagine.

— George O’Brien

Law Sections
Crear, Chadwell & Dos Santos Charts an Ambitious Course

From left, Tony Dos Santos, Kimberly Davis Crear, and Jim Chadwell.

From left, Tony Dos Santos, Kimberly Davis Crear, and Jim Chadwell.

Tony Dos Santos remembers thinking — actually, the word he used was knowing — that it was definitely time for a career course change.
And as he talked about the thought process that led him to that conclusion that he needed to leave the larger-law-firm environment — in this case the Springfield-based firm Robinson Donovan — and find an opportunity to put his name over the door, he struggled somewhat in his efforts to describe it before eventually finding the terminology he was looking for.
“I just wanted to be in much greater control of my destiny,” he told BusinessWest. “I realized that being more of my own boss, being in a smaller place where there’s more flexibility and less structure, was what I was looking for at this stage in my career.”
Kimberly Davis Crear and Jim Chadwell could certainly relate.
They had come to the same basic conclusion about their careers several years earlier, and decided, separately, to leave Robinson Donovan and start their own firm. Crear did so in 2003, when she partnered with two former Robinson Donovan partners, and Chadwell joined that firm a few years later. He and Crear have remained together (the two other partners left to start their own venture), and built a solid reputation — and sizable portfolio of clients — in the realm of workers compensation defense work.
Late last year, the partners began talking with Dos Santos about broadening the base of their firm by adding his name to the letterhead and his expertise — commercial real estate and general business law — to the resume.
Those talks, which coincided with Crear and Chadwell’s need to find new quarters — their lease was up in space within the Fuller Block that will become the new home to WFCR — concluded that this was a good fit on many levels.
“We all knew each other, we’ve all worked together … we had a lot of history together,” said Dos Santos. “It’s helpful when you’re making a move to know the people you’re going to be working with and respect them.”
Chadwell agreed, and noted that the three lawyers, who have been referring clients to each other steadily for years, complement one another, and together offer a base of specialties that provides strong growth potential.
On April 1, the three partners and seven additional staff members settled into 3,500 square feet on the third floor of Monarch Place. And with the settling in period behind them, they’re focused on continued growth of their own practices and, in Dos Santos’ making that transition from lawyer to business co-owner.
For this issue and its focus on business law, BusinessWest talks with the three partners about where they eventually want to take this firm, but mostly about that notion of controlling not only their destiny — but that of their business venture.

Making Their Case
As she talked with BusinessWest about the feel of a small boutique firm and what she likes most about it, Crear pointed to the logo on her new business card.
The square image featuring three initials (‘C,’ ‘C,’ and ‘D’) as well as the ampersand, was selected after input from all three partners, who had an active role in the design process, which went fairly smoothly, she said, adding that such democracy — not to mention quick decision-making — doesn’t generally prevail at most large firms.
“I have a comfort level with this setting that I just didn’t have in a larger firm,” she explained, noting that over the past decade or so, she and Chadwell have become well versed in what both described as the “business side” of law — meaning everything from hiring personnel to handling a payroll to leasing a copier — and out of necessity.
Dos Santos, meanwhile, is still negotiating a learning curve.
“When you’re in a large firm, you don’t deal with any of the real day-to-day issues,” he said, referring to everything from IT matters to lease agreements, which he handled in this case. “You have either an executive committee or a professional executive who’s making all those decisions, and you’re just focused on practicing law; now, you’re more of a business person practicing law.”
While that transition process continues, the three partners are working to build the business they’ve formed. And for Crear and Chadwell, that means efforts to grow their already substantial portfolio in workers compensation defense work.
Both benefited substantially from the tutelage of former Robinson Donovan partner Jim Turtollotte, said Chadwell, describing him as the dean of the local workers comp defense bar, and have steadily expanded their client base over the years.
It now includes most all of the major workers comp providers, as well as self insured companies and groups, not only in Western Mass. but across the state as well.
And while such defense work generally involves the carriers, there is considerable employer involvement in such matters, said Crear, and thus the opportunity for referrals and a chance to do more and different types of work for those on the client list.
“I often have someone from the corporate piece of the company with me watching the workers comp claim,” she explained, “and as a result, we’ve been able to establish a number of relationships.”
And this is why Dos Santos is an important addition for the firm.
A partner at Robinson Donovan when he left that firm, Dos Santos specializes in all facets of commercial real estate, commercial finance, and general business law. He has significant experience representing developers, investors, and lenders regarding complex commercial real estate transactions, including acquisitions, dispositions, leasing, financing, zoning, and permitting, and recently has cultivated a niche involving affordable housing initiatives for formerly homeless veterans, including work with the nonprofit work Soldier On.
“They’re expanding exponentially, and I’ve done a lot for them,” he said of Soldier On, adding that one current project involves the former police training facility in Agawam, while another involves Veterans Administration property in Leeds.
When asked if there was anything approaching a five-year plan for the firm, Chadwell laughed and said, “we signed a five-year lease here — that’s our strategic plan.”
Elaborating, and turning more serious, he said the new venture, with its broader range of specialties, has solid growth potential. Where, when, and how that growth takes place is a function of how the three partners are able to expand their portfolios — possibly necessitating the need for more help — and whether there are logical additions to the roster of specialties that would bring more lawyers to the firm.
One possible avenue for growth is the broad realm of employment law, said Chadwell, adding that it would be a natural fit given the general business law work handled by Dos Santos and the workers comp defense services that he and Crear provide.
“I could see employment law being a tremendous fit going into the future with the nature our practices,” said Chadwell, noting that all three partners already refer out a considerable amount of work in that area. “And it’s an ever-growing practice area.”
The firm has the right of first refusal on some additional space on the third floor, said Chadwell, adding that it is hope — and expectation — that there will be need to exercise that right in the near future.

Final Arguments
As she gave a quick tour of the firm’s new offices, Crear noted that she swung a swift, mutually beneficial deal with Chadwell to take what would be considered the corner office. Dos Santos, meanwhile, got a consolation prize of sorts — the office closest to the conference room.
Such quick, easy decisions usually don’t happen at larger firms, where bureaucracy and rules often dictate such matters.
But they are part and parcel to life in a small boutique firm, where the principals are firmly in control of their destiny — and determined to make the most of that opportunity.

George O’Brien can be reached at [email protected]

Law Sections
NLRB Rules Most Proposed Provisions Are Too Broad in Nature

ROSEMARY J. NEVINS

Rosemary J. Nevins

In their quest to protect company interests and private information, many employers have developed social media policies restricting the use of such media by their employees with regard to workplace matters.
Responding to the increasing number of challenges to such policies, the National Labor Relations Board (NLRB) has recently issued its third report involving its review of the social media policies of seven different companies. Upon completing its review, the board determined that several of the policy provisions involved in six of the seven cases were overbroad and therefore, unlawful under the National Labor Relations Act (NLRA). The seventh case involved a revision of that company’s social media policy, which the board deemed to be lawful under the act.
In its two earlier reports the board’s focus was on notifying employers that their social media policies should not be so all encompassing as to ban employee activity protected under federal labor law. The board cautioned that an overly broad policy could potentially violate Section 7 of the NLRA, which protects an employee’s Section 8(1)(1) right to engage in concerted activities for the purpose of mutual aid and protection. Interestingly enough, the board determined that this caveat applies to both union and non-union employers alike.
In determining the lawfulness of each policy’s provisions, the board first analyzed whether the policy, as written, would “reasonably tend to chill employees” in the exercise of their rights under the NLRA by specifically restricting those rights. Absent such an explicit restriction, the board then focused on the following considerations:
• Whether an employee would reasonably conclude that the policy does prohibit protected activities;
• Whether the employer adopted the policy in response to union activity; and
• Whether the employer has applied the policy in such a manner as to restrict protected activity.
Examples of Unlawful Provisions
Among the many provisions deemed to be unlawful as written in the policies reviewed are the following:
• A provision including a general condemnation of posting “offensive, demeaning, abusive or inappropriate remarks on-line.”
Reason: Such a provision is overly broad and might potentially restrict an employee’s protected right to criticize its employer’s treatment of employees.
• A provision requiring the employee to ensure that information shared about the company is completely accurate, not misleading, and non-public.
Reason: Such a provision would be reasonably interpreted to apply to discussions about a criticism of the employer’s treatment of its employees.
• A provision preventing an employee from commenting on any legal matters, including pending litigation or disputes.
Reason: Such a provision restricts employees from discussing the protected subject of potential claims against the employer.
• A provision instructing employees not to share confidential information with co-workers — for example, their rate of pay, work schedules, etc., among other topics unless those co-workers need the information to do their jobs.
Reason: Employees would construe such a provision as prohibiting them from discussing information regarding the terms and conditions of their employment.
• A provision to prohibit employee’s release of confidential guest, team member, or company information.
Reason: This provision would reasonably be interpreted as prohibiting employees from discussing and disclosing information regarding their own conditions of employment, as well as the conditions of employment of other employees.
• A provision threatening legal action, including criminal prosecution, in addition to corrective action up to and including termination, where an employee violates any portion of the employer’s policies regarding confidential information.
Reason: Since the rules were found to be unlawful, the reporting requirement was also unlawful.
• A provision that cautions employees not to post information about which they are uncertain and to resolve any doubts as to whether they should post that information by checking the designated personnel.
Reason: Any rule that requires employees to secure permission from an employer as a pre-condition to engaging in Section 7 activities violates the Act.
• A provision that cautions employees to treat everyone with respect by refraining from posting offensive, demeaning, abusive, or inappropriate remarks on-line and reminding them that they are expected to abide by the same standards of behavior in the workplace as well as in their social media communications.
Reason: The first part of this provision proscribes a broad spectrum of communications that would include protected criticism of the employer’s labor policies of treatment of employees. The remaining portion is ambiguous as to its application to Section 7.
Among other findings, the board posited that even a “savings clause” stating that the policy would not be construed and applied in a manner that improperly interferes with employees’ rights under the act will not pass muster.
Lawful provisions include those that are clearly written and limit their application to examples of specific illegal or unprotected conduct that would not reasonably be construed to be protected activity.
One example of such a provision is one proscribing “harassment, bullying, discrimination, or retaliation that is impermissible in the workplace, and to be impermissible between co-workers online, even if it is done after hours, from home or on home computers.”
Similarly, it would be lawful for an employer to proscribe employees from posting information online in the employer’s name or in a manner that could reasonably be attributed to the employer without written authorization from the designated company agent.
Err on the side of caution and carefully review your social media policies.

Rosemary J. Nevins, Esq. specializes exclusively in management-side labor and employment law at Royal LLP, a woman-owned, boutique, management-side labor and employment law firm; (413) 586-2288; [email protected].

Law Sections
10 Things to Know About ‘Scary’ Retirement-plan Beneficiaries

Ann I. Weber, Esq.

Ann I. Weber, Esq.

The terrific thing about retirement plans (including individual retirement accounts) is that they grow income-tax free within the plan. The price of this benefit is that, upon distribution, income tax is assessed on the entire amount distributed. At the death of the plan participant, individual plan beneficiaries can stretch out the distributions over their life expectancy and defer income taxes until a distribution is actually received.
Minimum distributions (MRDs) are required over this period, and spouses have special rules applying to them, which allows them to add 10 years to the payout period. This works wonderfully for most beneficiaries because it allows income taxes to be paid over time with all taxes on the amount not distributed deferred.
However, this may not be such a great benefit if a minor, disabled individual, or otherwise scary person is named as a beneficiary of the plan, because the plan participant may not want such an individual to receive their distributions outright. Here are 10 things to think about if you have potential plan beneficiaries in this situation.

Minors. Many parents do not want their children to receive a large sum of money outright. In Massachusetts, the age of majority is 18, but many parents would tell you that maturity arrives much later.

Disabled Persons. For persons under a legal disability who are receiving public benefits such as Medicaid or Supplemental Security Income (SSI), any mandatory income payment will be considered countable income for purposes of any benefits to which they might otherwise have been entitled. The value of the entire plan will be considered a countable asset if the disabled person can access the plan proceeds on his or her own. As a result, an individual on Medicaid or SSI who is the named as a beneficiary of the plan could very likely lose his or her medical or supplemental assistance as a result. The retirement benefits would then be spent down to pay medical and other expenses until the disabled individual was impoverished and could reapply for benefits.

Otherwise scary persons. These may include, among others:

• Business owners. Many business owners have personally guaranteed business debts and do not want any retirement benefits they receive from their parents (or any other plan participant) to be subject to claims of their creditors.
• People who are or may be going through a divorce. Most plan participants do not want their retirement funds going to an ex-spouse.
• Technical adults. Many people do not mature at 18, and parents may be concerned that a child might not have the skills to handle a significant sum of money, leading to some unwise decisions.
• Individuals in risky occupations. Doctors, lawyers, and maybe even Indian chiefs may be concerned about possible malpractice or other claims of unknown amounts and, consequently, do not want to have the outright ownership as a plan beneficiary.
• Temporary situations. An individual may be in a precarious situation at the present time, but is likely to resolve it sometime in the future.

Conventional Trusts. Most conventional trusts are tricky to use as retirement-plan beneficiaries because retirement-plan benefits paid to a trust are subject to income tax in full upon receipt. Thus, if such a trust is named as a beneficiary of the plan, the plan benefits would ordinarily be distributed to the trust in full, and would be subject to income tax in the year of receipt.
When a Conventional Trust Is a Good Idea. Where the plan beneficiary is very young or under a legal disability and receiving needs-based public benefits such as Medicaid or SSI, the payment of tax might be an acceptable price to pay for the security of having the asset managed by a trustee and distributed to the beneficiary only at the trustee’s discretion.
When a Non-conventional Trust is Better. Special trusts blessed by the IRS can protect the undistributed portion of the plan benefits while allowing a trust beneficiary to receive minimum required distributions (MRDs) annually. They work well when the plan participant is concerned about naming the beneficiary outright.
‘See-through Trusts’ Great for Scary Beneficiaries. A see-through trust can be created by the plan participant and named as the beneficiary of the plan. At the death of the plan participant, the trustee receives from the plan and distributes to the trust beneficiary only the mandatory annual MRD. For scary beneficiaries, these trusts can be a home run, and the trustee can be empowered to reach the rest of the plan asset in its discretion.
Discretionary Trusts. Though not as clearly blessed by the IRS, it is also possible to name a trust with multiple beneficiaries as the named beneficiary of a retirement plan. The advantage here is that the trustee can decide how to apportion the MRD (and additional principal payments, if desired) among trust beneficiaries. The measuring life for the MRDs is the life expectancy of the oldest beneficiary. Note, however, that these trusts are more technical, and stricter rules apply regarding remainder beneficiaries.
Trustee Must Be an Independent Third Party. The beneficiary may not be named as a trustee because the discretionary ability to reach the principal of the trust may render all the plan assets subject to the claims of creditors, divorcing spouses, etc.
Trustee May Name the Beneficiary Trustee at a Later Date. In circumstances where the plan participant wishes to limit access to the plan for a limited period only, the trustee may be given the authority to name the plan beneficiary as successor trustee at a certain point or at the trustee’s discretion. This works well for individuals whose financial situation or level of maturity is likely to change for the better — for example, when an individual undergoing a divorce is no longer subject to claims of the spouse, or when a child reaches a certain age.
Although there are no perfect solutions in this situation, with a little pre-planning, retirement plans can be transferred to these special beneficiaries in an optimal fashion.

Attorney Ann I. Weber is an attorney with the Springfield-based firm Shatz, Schwartz and Fentin, P.C., and concentrates her practice in the areas of estate-tax planning, estate administration, probate, and elder law, and has a particular interest in creative estate planning for authors and artists, farmers, and landowners. She is a board member and past president of the Estate Planning Council of Hampden County Inc., and is a former (and founding) board member and current member of the Massachusetts chapter of the National Academy of Elder Law Attorneys. She is also a frequent author and speaker on issues regarding estate planning; (413) 737-1131.

Agenda Departments

Massachusetts Chamber Business Summit
Sept. 9-11: The Massachusetts Chamber board of directors will conduct its annual Business Summit and Awards Ceremony at the Resort and Conference Center at Hyannis. The two-day meeting allows participants to meet with business professionals from across the state, as well as listen to state and local elected officials who will discuss the future of business in Massachusetts. Additionally, representatives from the Mass. Office of Economic Development will discuss loans, grants, and tax incentives available to business owners. Industry experts will also be on hand to discuss topics such as leveraging social media, search-engine optimization, and health care cost containment. The winners of the Business of the Year Award and the Employer of Choice Award will also be announced during the summit. For more information, call (617) 512-9667 or visit www.masscbi.com.
World Affairs Council Annual Meeting
Oct. 10: Hampshire College President Jonathan Lash will speak at the World Affairs Council of Western Mass. Annual Meeting & Dinner in the Mahogany Room of the Springfield Sheraton Hotel in downtown Springfield. More details will be forthcoming. Lash is an internationally recognized expert on practical solutions to global sustainability and development challenges. Before he became president of Hampshire College in 2011, he served as president of World Resources Institute (WRI), an environmental think tank with offices in eight countries and partners in more than 50 countries. WRI is an international leader on issues ranging from low-carbon development to sustainable transportation. From 1993 to 1999, Lash was co-chair of the President’s Council on Sustainable Development, a group of government, business, labor, civil rights, and environmental leaders appointed by President Clinton that developed visionary recommendations for strategies to promote sustainable development. He played a key role in the creation and success of the U.S. Climate Action Partnership, which in 2007 issued the highly influential “Call to Action” on global warming. Prior to WRI, Lash held posts as director of Vermont Law School’s Environmental Law Center, Vermont secretary of Natural Resources, and Vermont commissioner of Environmental Conservation, and as a federal prosecutor. For more information on the event, call (413) 733-0110.
Western Mass. Business Expo
Oct. 11: BusinessWest will again present the Western Mass. Business Expo. The event, which made its debut last fall at the MassMutual Center in downtown Springfield, will feature more than 180 exhibitors, seminars, special presentations, breakfast and lunch programs, and the year’s most extensive networking opportunity. Comcast Business Class will again be the presenting sponsor of the event. Details, including breakfast and lunch agendas, seminar topics, and featured speakers, will be printed in the pages of BusinessWest over the coming months. For more information or to purchase a booth, call (413) 781-8600, e-mail [email protected] or visit www.wmbexpo.com.

Departments People on the Move

Wolf & Company, P.C. recently announced the promotion of Mark O’Connell, CPA, to the position of President and CEO of the firm, effective July 1. O’Connell has been a member of the 100-year-old company since 1997, and spearheaded the development of its Springfield office, which he most recently served as dirctor. O’Connell will continue to work out of the Springfield office. He is a member of Wolf & Company’s financial-institutions group, and formerly held a seat on the firm’s executive committee, which establishes the firm’s policies and strategic direction.
•••••

Thomas R. Creed

Thomas R. Creed

TD Bank has named Thomas R. Creed Senior Vice President and Market Commercial Credit Manager in the new Credit Management Division in Springfield. Creed will direct approval, underwriting, and portfolio-management, staff, and procedures supporting TD Bank’s commercial-banking business in Western Mass. Creed has 27 years in banking and related fields and serves as chairman of the Holyoke Redevelopment Authority and on the board of the Economic Development Council of Western Mass.
•••••
United Bank announced the following:
• Amy Bilodeau has been promoted to the position of Personal Banking Officer at the West Springfield branch. She joined United Bank in 2008 with nearly 25 years of banking experience gained at the former Westbank, now New Alliance Bank, in West Springfield; and
Ronald A. Gannett

Ronald A. Gannett

• Ronald A. Gannett has joined the bank’s Beverly loan production office as a Senior Vice President in Commercial Baking, focusing on commercial real-estate opportunities in the Greater Boston area. He will assist in building the bank’s brand and commercial real-estate business in that area, while complementing the current activity in the Greater Worcester and Springfield areas.
•••••
American International College announced the following:
Linda Dagradi

Linda Dagradi

• Linda Dagradi, a 1971 AIC graduate, has been promoted to Vice President for Enrollment Management. Dagradi has most recently incorporated Admissions, Marketing, and Financial Aid into the umbrella of Enrollment Management to aid AIC in growing its student population both at the undergraduate and graduate levels; and
Nicolle Cestero

Nicolle Cestero

• Nicolle Cestero has been promoted to Vice President for Human Resources. In that position, she will supervise and direct the human-resources activities of the college.
•••••
Business Network International (BNI) Western Mass. recently appointed Jason Turcotte as Managing Director for the region. Turcotte will be responsible for overseeing and providing continued structure, training, and support to the chapters and members of BNI Western Mass. He will ensure that every chapter is following the BNI system and is on pace to achieve goals, as well as supporting the leadership teams within the region.
•••••
Elizabeth B. Rairigh

Elizabeth B. Rairigh

Elizabeth B. Rairigh, AICP, recently joined the Pioneer Valley Planning Commission as a Historic Preservation Planner. She holds a master’s degree in Historic Preservation and a master’s in City Planning from the University of Pennsylvania.
•••••
Thomas A. Miranda, an attorney with Springfield-based firm Cooley, Shrair, P.C., recently presented the seminar “Using Mediation to Settle Property Disputes” at the 2012 spring session of the CPE Forum at Holyoke Community College Kittredge Center. The forum provides educational programs to business professionals, including CPAs and CMAs. Miranda also recently presented a session on “Business Entity Organization and Structure to Limit Liability” at a Hampshire County Bar Assoc.-sponsored small-business-entity seminar.
•••••
Richard J. Kos

Richard J. Kos

The Board of Directors of Hampden Bancorp Inc., which is the holding company for Hampden Bank has named Richard J. Kos, Esq. to Chairman of the Board of the company and the bank, effective immediately. Kos has been an attorney at the firm of Egan, Flanagan & Cohen, P.C. since 2004 and is a partner of the firm. Prior to that, he had been in private practice since 1978, and was mayor of Chicopee from 1997 to 2004. Kos has a bachelor of science degree in Economics from Amherst College, and a law degree from Suffolk University Law School. He currently serves as a trustee of Our Lady of the Elms College, chairman of the Chicopee Chamber of Commerce, a member of the Board of Incorporators of the Mason Wright Foundation of Springfield, and a member of the Board of Directors of the Regional Employment Board of Hampden County. He has held prior directorships with the Pioneer Valley Red Cross, the Polish National Credit Union, Providence Place, the Economic Development Council of Western Mass., and the Westover Metropolitan Development Corporation. He had been
an incorporator of Chicopee Savings Bank.
•••••
The YMCA of Greater Springfield announced that four area leaders from the business and non-profit communities recently joined its Corporate Board of Directors. They are:
John Doleva

John Doleva

• John Doleva, President of the Naismith Memorial Basketball Hall of Fame;
Lorenzo Gaines

Lorenzo Gaines

• Lorenzo Gaines; Program Director for ACCESS Springfield;
Paul DiGrigoli

Paul DiGrigoli

• Paul DiGrigoli, Owner/CEO of DiGrigoli Salon and DiGrigoli School of Cosmetology; and
Jeffrey Poindexter

Jeffrey Poindexter

• Jeffrey Poindexter, an attorney with Bulkely, Richardson and Gelinas, LLP.
•••••
Friendly Ice Cream in Wilbraham recently announced the following appointments and promotions:
• Walter Kwiecien has been promoted to Director of Information Technology;
• Lionel Bisson is now Director of Training and Quality Assurance and will direct all training and development function and the quality assurance inspection process;
• Ana Alves, with the company since 1977, has been named Manager of Restaurant Technology and will be responsible for managing and developing point-of-sale systems;
• Valerie Doggett has been named Audit Service and Quality Service Assurance Manager, where she will be responsible for conducting quality service audits in both company as well as franchise-owned restaurants;
• Joseph Stiefel, a member of the IT Department since 2006, has been named Project Manager, and will be responsible for leading program development projects as well as supporting current systems from a programming and database perspective;
• Melany Howe has been appointed Senior Manager for financial planning and analysis, providing financial support and analysis for restaurant operations and all marketing and promotion activities;
• Matt Vitorino has been named Senior Financial Analyst, and will provide financial support and analysis for retail, co-pack and franchise operations;
• Christine Klingaman has been named the Franchise Business Consultant supporting several of Friendly’s franchise organizations as a liaison between the franchises and Friendly’s Support Center;
• Lynne Geiger, a 25-year employee, was named Point-of-Sale Systems Administrator, where she will be responsible for developing and maintaining Friendly’s POS systems as well as maintaining various software platforms;
• Richard Del Valle has been appointed Vice President of Restaurant Operations Support, where he is responsible for all restaurant operations support and quality assurance and training.

Sections Women in Businesss
Understand Your Obligations for Maternity and Paternity Leave

Kevin V. Maltby

Kevin V. Maltby

At any given time, a female employee may approach you and share the wonderful news that she is pregnant. Similarly, a male employee may approach you with the news that he is going to be a father.
While such news is usually well-received, it also serves as notice that you, as the employer, should begin making preparations for your employee’s maternity or paternity leave. You must be mindful of both state and federal law.

The Massachusetts Maternity Leave Act
Under state law, the Massachusetts Maternity Leave Act (MMLA) applies to all businesses that employ six or more employees. As written by the state Legislature, the MMLA is gender-specific to females, and provides eight weeks of unpaid leave to full-time female employees for purposes of giving birth, adopting a child under the age of 18, or adopting a child under the age of 23 who is mentally or physically disabled.
The MMLA requires the employee to give her employer at least two weeks notice of her anticipated date of departure and intention to return. It should be noted that an employer cannot refuse to grant MMLA leave on the grounds that doing so would constitute a hardship.
The Mass. Commission Against Discrimination (MCAD) is the state’s chief civil-rights agency and is empowered with enforcing and overseeing the MMLA. As the chief enforcement agency, the MCAD has taken the position that the MMLA should be applied equally to both men and women despite it being gender-specific. In doing so, the MCAD effectively converted the MMLA to a paternity-leave act so that it would apply equally to men and women. Therefore, employers should treat both male and female employees equally under the MMLA when reviewing guidelines and leave requirements.
In a recent case involving a pregnant employee, the MCAD awarded an employee almost $25,000 in damages after finding that the employer had taken adverse employment action against the employee based on her pregnant status. In Sally Scaife v. Florence Pizza Factory, the MCAD found that, despite the employee’s positive work-performance reviews, the employer cut her hours upon learning that the employee was pregnant. The MCAD found that, as her pregnancy started to show, her boss reduced her work, stating, “it was bad for her and bad for the business” if she mopped or lifted. When she contested, her boss grew frustrated and reduced her hours, and finally told her “not to come in for the next shift because … she was too big.”
In another recent case involving the MMLA, the MCAD awarded an employee $111,300 in back pay and $35,000 in emotional-distress damages. In Patricia D. Kane v. College Central Network, the employee mostly worked from home, as one of 10 employees in a national company. In April 2000, she started working full-time as a regional manager, and she became pregnant in July 2001. She requested maternity leave, and was told that she “could take four weeks maternity leave and receive compensation equal to one week’s salary.” She made use of that time, and also took five sick days. In time, she became pregnant again, and was told that she “could take no more than four weeks of maternity leave and could not use any sick time toward her maternity leave.” The company president started to divert work from her and to pressure her to return as soon as possible.
Before she delivered her second child, she requested a full eight-week unpaid leave and a transition period of three days a week thereafter. She gave birth on Oct. 7, 2003, and started her leave. During that time, her boss took actions to remove her from the company, including stopping the lease payments on her car, shutting off her work cell phone, and replacing her name in the newsletter.
When she tried to come back to work, she found she was locked out of the intranet and e-mail. Her boss later informed her that her regional office was being closed and she was being laid off. Based on the employer’s conduct, the MCAD awarded the employee back pay and emotional-distress damages.

The Family Medical Leave Act
Under federal law, the Family and Medical Leave Act (FMLA) applies to businesses that employ more than 50 employees. The FMLA provides for 12 weeks of leave to an employee, regardless of the gender, for the birth and care of a newborn child or care for a newly adopted or foster child, or leave for a serious illness.
Leave can either be for paternity, maternity, or specified personal health reasons, depending on the needs of the employee. Under the FMLA, employees are eligible for FMLA benefits if they have worked for their employer for at least 12 months and at least 1,250 hours during the 12 months immediately preceding the leave, and they work within 75 miles of the location of the business.

A Case for Both MMLA and FMLA
As you can see in the chart above, some of the parameters of MMLA and FMLA seem contradictory. In addition, there are some circumstances where an employee may be entitled to 20 weeks of leave. These circumstances include a pregnant employee who has experienced complications and is on bed rest. During this pre-birth period, the employee can make use of her FMLA leave because she is experiencing a serious illness. Once the employee gives birth, she may then use her MMLA, because it applies only for the purpose of giving birth. Under these circumstances, the employer must comply with both FMLA and MMLA.
If you are unsure whether MMLA, FMLA, or both apply to your employee’s circumstance, and given the possibility of a discrimination claim, you should be sure to consult with a lawyer who concentrates their practice in employment law to be sure that you are in compliance with the law.

Kevin V. Maltby is an associate with Bacon Wilson, P.C. and a former prosecutor for the Northwestern District Attorney’s Office. He was named by SuperLawyers as a Rising Star from 2009 to 2011 in the field of employment and labor law, has extensive jury-trial and courtroom experience, and is an adjunct faculty member in the Legal Studies department at Bay Path College; (413) 781-0560; baconwilson.com/attorneys/maltby; bwlaw.blogs.com/employment_law_bits

Departments People on the Move

Westfield-based engineering firm Tighe & Bond announced the following:

Eric Fontaine

Eric Fontaine

• Eric Fontaine, LEED AP has joined the staff as a Mechanical Engineer. He has more than 10 years of mechanical-engineering experience in heating, ventilation, and air-conditioning systems. His expertise includes sustainable and integrated system designs for education, government, commercial, industrial, and residential buildings. He is a member the American Society of Heating, Refrigeration and Air Conditioning Engineers and the U.S. Green Building Council; and

Jean Christy

Jean Christy

• Jean Christy, PE has joined the staff as a Civil Engineer. She has more than 10 years of experience in the management, design, permitting, and construction of civil-engineering design projects that range from site and roadway design to complex stormwater-management analyses. She is also a licensed soil evaluator.

•••••

The law firm Annino, Draper & Moore, P.C. announced that Attorney Tracie Kester has been made a Partner. Kester focuses her practice on residential and commercial real estate, estate planning and administration, elder law, and small-business representation.

•••••

Easthampton-based Hogan Technology announced that Sean Hogan, President of the company that is a provider of unified communications, has been invited by Technology Assurance Group, an international organization representing nearly $350 million in product and services, to speak at its national convention in New Orleans on Sept. 9-12. He will share his vision of the future of unified communications with some of the industry’s top manufacturers, vendors, suppliers, and resellers.

•••••

Patrick J. Willcutts

Patrick J. Willcutts

Morgan Stanley Smith Barney announced that Patrick J. Willcutts, Vice President, Financial Advisor, Certified Financial Planner Practitioner, and Certified Investment Management Analyst Professional in the Springfield office, has earned the Certified Private Wealth Advisor designation. Willcutts has been a member of the firm since 2008.

•••••

Glenmeadow Retirement announced the appointment of Allan J. Ouimet to the position of Director of the Glenmeadow at Home program. Ouimet has 20 years experience in human services, including various senior-director-level positions at the Stetson School in Barre, Mass.

•••••

Garvey Communications Associates announced two recent appointments:

Kelsey C. Vella

Kelsey C. Vella

• Kelsey C. Vella has been named Public Relations Analyst and will create search-engine-optimized content for new media, social networks, and organic searches. She will also manage 30 different social-media platforms for public relations and advertising purposes; and

Jamie M. Dunkan

Jamie M. Dunkan

• Jamie M. Dunkan has been named accounts analyst and will insure contract compliance for more than $1 million in financial transactions annually. She will also support the agency’s online advertising and content-management efforts.

•••••

Big Y Foods Floral Manager John Heon has been honored by United Fresh Foundation’s Center for Leadership Excellence. Heon was among 25 outstanding produce managers representing 20 different supermarket chains, commissaries, and independent retail stores in the U.S. and Canada.

•••••

Epstein Financial Group announced the addition of Brian N. Caine, ChFC as Director of Retirement Income Planning. Caine will provide EFG clients with his expertise and knowledge in creating successful retirement outcomes customized for each individual’s unique objectives.

Court Dockets Departments
The following is a compilation of recent lawsuits involving area businesses and organizations. These are strictly allegations that have yet to be proven in a court of law. Readers are advised to contact the parties listed, or the court, for more information concerning the individual claims.

 

CHICOPEE DISTRICT COURT

Brandi Sabourin v. Stop & Shop Holdings Inc.

Allegation: Negligent maintenance of premises, causing injury: $4,667.23

Filed: 4/25/12

 

Granite City Electric Supply Co. v. Pelland Electrical Contractors Inc. and John Pelland

Allegation: Breach of contract for electrical materials supplied: $19,510.01

Filed: 6/4/12

 

FRANKLIN SUPERIOR COURT

Russell and Kathryn Scott v. Farm Family Insurance Co.

Allegation: Failure to pay on insurance policy: $80,000

Filed: 4/13/12

 

HOLYOKE DISTRICT COURT

Lillian Santos v. Holyoke Mall Co. and UGL Services UNICCO Operations

Allegation: Slip and fall on foreign substance: $4,766.97

Filed: 5/30/12

 

PALMER DISTRICT COURT

Cach, LLC v. Linda Mason aka Linda L. Johnston and Joe’s Handyman

Allegation: Breach of credit-card agreement: $4,818.96

Filed: 5/24/12

 

SPRINGFIELD DISTRICT COURT

Catherine Gaynor v. Price Rite

Allegation: Slip and fall: $6,883

Filed: 5/18/12

 

Constellation New Energy Inc. v. Apple Tree Market Inc.

Allegation: Non-payment of services rendered: $19,812.27

Filed: 5/17/12

 

Wanda Roche v. Patalono Pizza, LLC

Allegation: Failure to clear ice, causing slip and fall: $16,097.18

Filed: 5/17/12

 

WESTFIELD DISTRICT COURT

Bobbie Demers v. Walmart Stores Inc.

Allegation: Failure to provide adequate security, causing personal injury: $9,550.36

Filed: 5/15/12

 

Vellano Brothers Inc. v. Lagone Plumbing & Heating Supply Inc.

Allegation: Non-payment of goods sold and delivered: $3,925.26

Filed: 4/6/12

Manufacturing Sections
Instrument Technology Inc. Has an Eye on the Future

ITI

ITI has found a number of military and law-enforcement uses for its scopes.

Walk inside the Westfield headquarters of Instrument Technology Inc., and the first thing you’ll notice is the totem pole. It’s kind of hard to miss, rising dramatically up two levels of the front atrium.

In fact, an abundance of Native American art graces many of the walls and offices of the facility. ITI President Greg Carignan says there’s a good reason for this, and it has to do with a hobby his father, Donald, stumbled upon by accident decades ago, shortly after founding the company.

“He was on the road, in very remote areas of the United States, calling on nuclear power plants that were usually out in the boonies,” Carignan said. “Usually, there was nothing around except Indian reservations. So, when he had time on his hands, he’d visit these reservations and meet artists, and he started growing an interest in Indian art. He started collecting it, and when his house overflowed, it started coming here. It’s quite a collection.”

Why nuclear power plants? When he launched ITI in 1967 as a manufacturer of optics equipment, the elder Carignan got heavily involved in the nuclear-energy market; “he started building underwater periscopes and wall periscopes to look at the spent fuel rods being stored underwater.”

Greg Carignan explained that, after a period of time, a nuclear fuel rod’s energy is spent, but it’s still radioactive, which has led to debate over the years about establishing a national repository for those spent rods in the Southwest, but bureaucracy and public opposition have made that all but impossible.

“So nuclear plants are required to store spent rods at their facility, mostly underwater, and they’re required to be inspected periodically,” he said. “Dad developed a large-diameter periscope that could go down underwater and look at those spent fuel rods and make sure they’re in good condition. He built quite a few of those scopes in the late ’60s and early ’70s.”

Greg Carignan

Greg Carignan says the company’s diversity has allowed it to thrive during societal changes, such as a shift away from nuclear power plants.

Today, Carignan, who, along with two siblings, took over the company from their father in 1990, oversees a 47-employee workforce designing and building cutting-edge optical equipment for a wide range of purposes, from peering around corners in war zones to helping doctors navigate inside the human body.

For this issue’s focus on manufacturing, BusinessWest pays a visit to Instrument Technology, which has been scoping out new opportunities in an intriguing field for the last 45 years — and shows no signs of slowing down the pace of innovation.

 

Solo Act

Donald Carignan, his son recalled, had a background in optics and worked as a project engineer for American Optical from 1960 to 1966. He then took a job with Kollmorgen Electro-Optical; “that’s where he got his experience building borescopes and periscopes.” Just a year later, he was ready to strike out on his own, launching ITI in Southampton.

“My dad was a pretty driven individual; he worked hard to make it a success,” Greg Carignan said, noting that the company was a bit gypsy-like during its first two decades, moving from Southampton to West Springfield, then to Westfield, and finally to the current facility on the other side of the city in 1985.

“We specialize in the design and manufacturing of remote-viewing instruments,” he explained, noting that the company employs designers and engineers, as well as a full machine shop and assemply department to build the products it designs.

“What is remote viewing? It’s the ability to view a photograph or video-record any area that’s inaccessible or hostile, as well as the ability to view covertly,” he explained. “We added that last portion over the past 20 years because, before that, it hadn’t been used for covert operations.”

But he backed up a bit to describe how ITI has branched into so many diverse fields.

It began with the nuclear-power plants, for which the company developed not only those underwater-viewing scopes, but wall periscopes that allowed workers to see past thick concrete walls into the ‘hot cells’ where radioactive materials were handled. But societal changes that impacted the nuclear-power industry would force ITI to shift its focus — and not for the last time.

“During the Carter years of the late 1970s,” Carignan said, “the nation saw a drastic decline in the number of nuclear facilities being built. And most facilities had our equipment in them. My dad was in need of business, so he looked elsewhere to try to continue moving ITI forward.

“He looked at the industrial market and saw that it was being served by medical endoscopes at the time, and nobody was building industrial borescopes,” he said, noting that the two words are essentially interchangeable, with ‘endoscope’ typically referring to a medical instrument and ‘borescope’ a non-medical one.

“Endoscopes for the human body came on the scene about 40 years ago, but it wasn’t until later on that people figured out they could use the same scopes to look into jet engines, castings, pipes, and other things in industry,” Carignan said. “My dad started working for companies like Pratt & Whitney and General Electric to build delicate industrial borescopes to inspect their engines. They called it the ‘jetscope.’”

Many years ago, he explained, the airline industry had to take apart engines to conduct inspections required by the Federal Aviation Administration — a very costly, time-consuming process. But the development of a flexible borescope that could be inserted into each end of the engine was a revolutionary and cost-saving change.

“Designers started designing points along the engine so they could look in the middle, too,” he said. “You take out a plug and stick in the scope to look at the different sections of the engine.”

During the ’80s and ’90s, the industrial market grew for ITI, and the scopes became more complex, with flexible shafts and articulated tips allowing for more flexible movement.

 

A Time to Kill, a Time to Heal

Dawn Carignan Thomas

Dawn Carignan Thomas holds one of ITI’s scopes used for medical applications.

Throughout this expansion, ITI hadn’t done anything in the medical market. “But that changed in the 1990s when a company on the West Coast — Accuscan in Mountain View, Calif. — knocked on our door and asked us to make what they called a gastroscope for them,” Carignan said.

“They didn’t want to see through it; they didn’t want fibers in it or optics of any kind,” he continued. “They were going to put a transducer in the tip and use it as an ultrasonic device for an esophageal probe down the throat to scope the heart, which is much easier than to try to do it externally and look through the rib cage and all the muscle and fatty tissue.

“We worked with them for a year and a half, and that’s when we started in the medical business,” he continued — a shift that has seen the company produce rigid arthroscopes, ureteroscopes, otoscopes, spine scopes, and laparoscopes; flexible gastroscopes, bronchoscopes, and colonoscopes; as well as equipment for video intubation.

“After 20 years, we’ve become a lot more selective about who we decide to work with,” Carignan said regarding the ideas potential customers pitch to ITI. “If it sounds like a very high risk, or a low chance of successfully bringing it to market, we may not get involved. If it’s a startup company or doctor/inventor that’s asking us to do it on our dime and pay for the development costs, oftentimes we’ll say no.

“The model we’ve come to develop,” he continued, “is companies that have some success already and are willing to share the developent costs of the product.”

Eventually, ITI expanded its offerings even further by getting involved in the law-enforcement and military markets, with products such as telescopic cameras that can see around corners and in darkness, under-door scopes, and scopes that see into rooms using tiny (as small as 2.6 mm) holes in the wall.

“We also needed non-conductive probes that could look into a package or parcel to check if there was anything explosive,” Carignan said. “You don’t want to stick in something metallic that could short the device and cause an explosion.”

The original models used infrared light to expose images, and “that was very successful — then the bad guys figured it out,” Carignan said. “So we were asked to find out new ways of seeing. So we developed a blue-light diode, with different characteristics that wouldn’t trigger detection devices. We always want to stay one step ahead of the bad guys.”

ITI also built a pole camera to look into second stories of buildings, down stairwells, into ceiling tiles, and even underwater. “This was a scope we sold quite a bit of to special-ops groups in Iraq, to clear buildings, streets, and neighborhoods, to look around corners and into rooms where the bad guys might be before clearing out a room. They were eventually used in caves to hunt down Al Qaeda in Afghanistan.”

The wars and Iraq and Afghanistan saw a surge in the production of such devices. Carignan showed BusinessWest a chart breaking down sales from 1999 through 2008, and while medical devices tend to make up the biggest percentage of the company’s sales in a typical year, the law-enforcement and military division took that spot from 2003 through 2006. Meanwhile, sales of industrial scopes have fallen off somewhat over the years, but are rebounding.

 

Next Generation

The three siblings — Greg, Controller and Purchasing Manager Dawn Carignan Thomas, and Manufacturing Manager Jeff Carignan — admit their devices don’t allow a clear view into the company’s future. With six kids among them, third-generation ownership is always possible.

“We’re wondering where the next generation might take us,” Greg Carignan said, “but it’s still early for that.”

For now, they continue to grow and innovate, scoping out new ideas to help people — manufacturers, surgeons, and soldiers alike — see a lot more clearly.

 

Joseph Bednar can be reached at  [email protected]

Sections Women in Businesss
Having a Baby Can — and Often Does — Alter a Woman’s Career Path

Sylvia Callam

Sylvia Callam says she has no regrets about the time she took off from work to spend with her children.


Sylvia Callam had invested an enormous amount of time and energy into her career, so she said she “thought long and hard” about making the decision to have a child.

“I had worked on Wall Street for eight years,” said the Yale graduate and director of research at Gage Wiley Inc., a brokerage-dealer firm. She planned to take two months of maternity leave, then return to work full-time. And although she doesn’t consider herself overly emotional, Callam felt very conflicted when that time approached.

“When you have a baby, your heart changes,” she said. “I had always been the first one to get to work and the last one to leave. But I was definitely surprised and taken aback by how much I wanted to be with my son.”

So she made the decision to put her family first. “For a few years, my career took a backseat. The motherly love I felt was overwhelming, and I needed some time to make sure that going to work was worth it,” said the Hatfield resident, adding that she only worked two days a week.

When her son, Nathan, turned 3, Callam gave birth to her daughter, Alyssa, who was born with myriad medical issues. Thankfully, her boss was understanding, and although she had returned to work full-time, he allowed her to take six months off.

Today, her children are 7 and 4, and despite working part-time for a period of time, she has made remarkable advances in her career. “I was very fortunate that my boss was willing to be patient,” she said.

Still, Callam believes becoming a mother improved her performance. “It is a real success story even though I have always put my children first; I’m more decisive, more confident, and more resilient than I used to be. I had to learn to do the same amount of work in four hours that used to take me eight, and my boss finds my attitude refreshing,” she said. “I am a much better mom because I work and a much better employee because I am a mother. But it’s all a question of whether a woman has a flexible employer.”

Experts agree.

Iris Newalu, director of Executive Education for Women at Smith College, says women can have both high-power careers and children. “But it’s not easy,” she told BusinessWest, adding that many are able to do so only because of flex time or companies that allow them to work from home. “There is no one formula, and everyone has to figure it out for themselves and decide where to set boundaries.”

Fern Selesnick says there was a myth generated years ago that women could have a family and a job and do it all perfectly.

“The standards are unrealistic, but the myth still exists. And even though employers say they support working mothers, it really is not across the board,” said Selesnick, who works as a professional career coach and trainer at Fern Selesnick Consulting.

As a result, having a child or growing one’s family can pose real challenges for working women intent on climbing the career ladder. Although it can be done, the rate of ascension for those who take a significant amount of time off from their jobs depends on a variety of factors.

“There are competing priorities once a woman becomes a mother,” Selesnick said, adding that concerns change while a woman is pregnant, once she has a baby, and when she decides to return to work. “There is an identity shift. Most women realize after the fact that they can’t give 100% to motherhood and 100% to their job. It requires making adjustments, so they need to figure out how they can do both well and take care of themselves without burning out.”

Experts say women should talk to their supervisors about how a leave of absence will affect their job standing before they become pregnant. “Women need to look at a mixture of practical and emotional issues,” Selesnick said, advising them to begin by reading their employee manual to find out how much maternity leave their company allows.

And when a woman does leave, she should tell her manager, “I hope the door will be open for me to come back,” Newalu said.

 

Pregnant Pause

Fern Selesnick

Once a woman has a baby, Fern Selesnick says, she realizes she cannot give 100% to her career and 100% to her role as a mother.

Most women need to work for economic reasons. However, statistics show that it can be financially lucrative to delay motherhood until one has achieved a modicum of success.

A study conducted by Amalia Miller, an associate professor of Economics at the University of Virginia, shows that each year a woman delays having her first child while she is in her 20s and early 30s results in an earnings gain of 9%. This is significant, since other studies show earnings often plateau once a woman becomes a mother.

This results partly from an inability to continue advanced schooling due to the limited number of hours a woman can work due to child-care issues or her desire to be home with her family. Issues mothers discuss with Selesnick include time management, self-esteem, a realistic identity, and career changes or adaptations that must be made, since research confirms that women are still the primary caretakers in families.

Selesnick said the decisions a woman makes and her ability to advance within her company often come down to her supervisor. She cites the cases of clients who were allowed tremendous flexibility. “But some supervisors expect everything to be the same in terms of performance and availability,” she told BusinessWest.

Newalu says women must learn how to negotiate to achieve what they need to be successful as a mother and employee. “Flexibility is key. Once you have a child, you can’t control things; children get sick, have performances at school, and have accidents that require a parent to leave work,” she said.

Attorney Kathy Bernardo was working for the law offices of Bulkley, Richardson and Gelinas in Springfield when she had her first child. And although she continued at the firm, a few years later when she found out she was expecting twins, she made the decision to work part-time.

“I made a conscious decision to get myself off the partnership track — I thought it would be more than I could handle,” she explained. “I knew I couldn’t commit 100% to my firm and my family, and I wanted to be fair to everyone as well as myself.”

When she returned full-time, it took her a year before she re-established her standing within the practice. “It wasn’t easy because I had to prove to them and to myself that I could handle it, and wanted them to have wonderful data to assess,” she said.

Bernardo achieved her goal of becoming a partner, but it took her 10 years instead of seven. “But I got where I wanted to be without sacrificing my family and was actually able to enjoy my children and be there for them in those important early years; babies demand most of your time,” she said.

Today, her children are teenagers, and she has no regrets about her decisions.

“Sometimes people feel that, if they don’t proceed as planned, they will lose their opportunity,” she said. “But I was fortunate to be somewhere where I could have that dialogue with my employer.”

Experts agree that a woman should have a frank discussion with her supervisor, manager, or someone in the company’s human-resources department before she leaves her job. They advise women to maintain relationships at work while on extended maternity leave, which has personal and professional benefits.

“It’s important for a woman’s self-esteem and confidence to feel that she still has a hand in her career and her work identity isn’t gone,” Selesnick said.

Other safeguards can help her to remain marketable. Selesnick recommends working part-time or doing volunteer work in an area that correlates to one’s career so there is not a large gap in a résumé.

Women also have a responsibility to stay current in their fields, Newalu said, adding it is especially important for those who work in information technology or other areas where change occurs rapidly.

 

Fair Exchange

Tricia Parolo’s career began in 1997, when she became an intern at MassMutual. In 2000, she achieved full-time status and held a variety of positions within the company until 2007, when she left to become a full-time mother.

“My husband and I had planned for it for two years; I took a leap of faith because I had no idea what to expect and what it meant to be a stay-at-home mom,” she said, adding that she had her second daughter shortly afterwards and soon discovered that working in an office seemed easier and less stressful than raising babies.

“I found it was really, really hard being at home,” Parolo said, adding that other people perceived her differently once she lost her professional identity.

She retained the part-time retail job she’d had while she was at MassMutual, but sometimes felt jealous of her husband when he left for work. “I was constantly torn about my decision.”

In 2010, a co-worker who had risen to a management position contacted her and asked if she wanted to work 20 hours a week. Parolo’s former colleague allowed her to work at home from 7 p.m. to midnight, although she did have to go into the office for four hours one day a week.

The following year, when her youngest daughter was 2, Parolo returned full-time and found she had to prove herself all over again. “I worked really, really hard to make up the gap,” she said.

But she has no regrets. “I had the best of both worlds. I was able to stay home with my two little babies and pick up where I left off,” she told BusinessWest.

Newalu says the top companies in the country are willing to invest in a woman’s career and make accommodations if she has a good track record, has been an excellent employee, and has established good relationships. “Talent is very expensive, and companies do not want to keep training new people; they want good employees back.”

However, as Parolo and Bernardo discovered, no one should expect to take up to a year off without consequences.

“It is unrealistic to think that you can slip right back into the position you had — a woman will probably be put where she is needed,” Newalu said. “The situation is the same for anyone who takes time off; you lose seniority, and the people who have stayed on the job have more understanding of the current situation.”

Women who cannot return to their previous position or are unhappy about what they are offered may want to seek employment at another company. However, when they do return to work — whether it is with their previous employer or a new one — they should know what they need and be willing to talk about these needs, even though it may be uncomfortable.

“Research shows that women don’t tend to be good negotiators. It’s a learned skill,” Newalu said, explaining that they can take a course, read books on the subject, or get a coach to teach them how to leverage their talent.

“Early in my own career, I did what I was told, but as I got more experienced, I learned to ask for what I needed,” she said. “You have to be willing to step outside your comfort zone. If you ask for what you need in the right way, you often get it. It can’t hurt to ask, and if you don’t have an open-door situation, you have to define how you will re-enter the workforce.”

Prior to becoming a mother, Selesnick held positions in management where she was required to be available at all times. She took a few years off when she had her daughter, but continued her part-time job as a writer. “It was a cut in income, but it allowed me to be the mother I wanted to be,” she said. “If I had taken a corporate management position, I couldn’t have been a mother in the way I wanted.”

When she did return to full-time work, she chose a much easier position at a nonprofit agency with a set schedule that didn’t include night or weekend hours. “Plus, my boss let me bring my daughter to work if it was necessary. Life was much simpler.”

 

Back to Business

As children grow, women often find that juggling roles becomes easier. “Women need to know that the demands of motherhood decrease and the time will come when you have complete flexibility again,” Selesnick said.

In fact, taking time off can be simply viewed as a detour on a career path.

“I am so glad that I persevered,” Callam said, “even in the lowest of times.”

Features
Plan Addresses Downtown Springfield’s Parking, Pedestrian Issues

This architect’s rendering shows the proposal for building a new, smaller parking garage on the site of the TB Bank parking lot.

This architect’s rendering shows the proposal for building a new, smaller parking garage on the site of the TB Bank parking lot.

Tim Love called it “a large gap between perception and reality.”
That’s how he chose to describe what he and others say is Springfield’s actual downtown parking problem — not the lack of inventory that many believe exists.
“There is plenty of parking in downtown Springfield, and when I say plenty, I mean plenty,” Love told BusinessWest, while quickly acknowledging that many people are simply not aware of this volume, leading to that perception he mentioned — that there is no place, or no good place, to park.
The city’s real issue lies with properly managing all that parking, he said — and this means everything from more-effective marketing of that supply to better signage to bring people to it, to perhaps more-creative pricing on the various products to incentivize people to use some of that underutilized inventory.
This need for better management is spelled out in something called the Downtown Springfield Parking and Pedestrian Plan (a carefully chosen name), which was prepared by Utile Inc. Architecture + Planning, with which Love is a principal, and Nelson Nygaard, a Boston-based transportation-planning firm, and funded by Mass Development.
The plan was commissioned in response to ongoing questions from city officials about what to do with the crumbling, 41-year-old, 1,232-space Civic Center Parking Garage. And while the document addressed that matter, it went much further in its scope.
Indeed, while the plan’s headline-making proposal is a suggestion to raze the Civic Center garage, build a new facility slightly more than one-third that size on a portion of the parking lot of the TD Bank building (owned by the Springfield Redevelopment Authority), and create a 250-space surface lot on the site of the old garage, there are many other suggestions, all aimed at making the downtown easier to navigate for motorists and pedestrians alike.
These include making Dwight Street, currently one way going south, a two-way road; closing down Falcons Way (the street that runs between the Civic Center garage and MassMutual Center) for many events, thereby creating what Love and others called a “Yawkey Way Effect,” in reference to the street outside Fenway Park in Boston where crowds gather before and after games; and improving the Market Street pedestrian way.
As for the specific plans for the garage and its proposed replacement, it would actually reduce the inventory of parking downtown by roughly 600 spaces, said Jason Schrieber, a principal with Nelson Neygaard.
But given the supply that exists downtown and the large percentage (more than half) of that supply that’s not being used, the city can easily absorb that loss, he said. Meanwhile, moving large amounts of parking even another block from the convention center could spur additional development in that area, he noted.
Using Boston and Northampton as examples, Schreiber said there are benefits to putting a few blocks of retail and hospitality venues between parking facilities and the front doors of event venues.
“If you look at the Academy of Music [in Northampton], there’s no parking there,” he explained. “You have to park in the city’s garage and walk past a number of shops and restaurants to get to the Academy of Music. That’s just one small, local example of what you see in many older downtowns.”
Kevin Kennedy, Springfield’s chief development officer, said, with the plan in hand, city leaders will closely consider all its points, from its basic premise — that perception is the real issue — to its major recommendation, and decide when and how to proceed.
While he agrees with some suggestions, he said there are questions about whether taking 600 spaces out of the inventory may hinder additional development, whether a 250-space surface lot on the footprint of the old garage is the best option for that site, and other matters.
And if they’re answered effectively, the city must then pursue financing for a plan that currently carries a price tag approaching $17 million.
For this issue, BusinessWest takes an in-depth look at the parking plan, thus shedding some light on what has become an important, and also complex, issue for many urban centers.

Reading Between the Lines
Matt Hollander described May 19 as “a great day for Springfield.”
There were three college commencement ceremonies going on that afternoon — AIC and Westfield State University at the MassMutual Center, which he serves as general manager, and Western New England University School of Law in Symphony Hall — as well as other, much smaller events in the convention center, he said. The various ceremonies and gatherings brought thousands of people downtown — as well as some serious gridlock.
It was the kind of day that would prompt questions about the wisdom of removing 600 parking spaces from the area around the convention center, he noted, while adding quickly that these are not the kinds of days on which to base one’s parking inventory.
“We don’t have many days like that Saturday,” he explained. “To build for your worse-case scenario doesn’t make any sense.”
Schreiber agreed.
“No one plans their system to the 100-year flood — it’s just not worth it,” he said, adding that Springfield and communities like it should create inventory sufficient to meet typical needs during peak weekday use — 10 a.m. to 2 p.m.
Going by that standard, Springfield is using not quite half (46%) the spaces in garages, on the street, and in surface lots within a 5-minute walk from the convention center, according to the report, and 51% of those within a 2.5-minute walk.
The ideal utilization rate, the identified target for most communities, is 85%, said Schrieber. But few communities actually come close to that number, he noted, adding that Springfield is in many ways typical of Northeast urban centers, although its utilization rates are even lower than those found in most other cities.
“I’ve found literally one place that actually has a parking-supply problem,” he told BusinessWest. “Every other community has plenty of supply, far more than anyone would have ever thought. We’re talking about hundreds or thousands of empty spaces at the peak hour of the day, and it all has to do with the need for better management programs.
“And those programs are starting to happen in various places around the country,” he continued. “There’s a couple of places in New England where they’re moving in the right direction. Nashua, N.H. is one of the better examples; they’ve implemented some fairly progressive management fixes in recent years.”
Elaborating, he said Nashua has implemented creative pricing policies, whereby busy streets are priced somewhat higher than those a little further away from the center of downtown, while parking in locations that would be considered remote is free or close to it.
“They used to price everything the same,” he explained. “When they changed, parking suddenly opened up; employees were willing to park in the cheaper spaces, and the prime customers who wanted the front door were willing to pay more for it.”
Such dynamic pricing programs can be a tool for improving overall parking management, said Corey Zehngebot, an urban designer and planner at Utile, noting that they help communities increase their utilization rates while reducing the kind of congestion Springfield saw on May 19.

On the Spot
But parking management starts with having the proper amount of inventory, said Love, returning to the study and its main recommendation — building a new garage much smaller than the existing facility and taking several hundred spaces out of the inventory.
“When you have too much parking, there are other negative effects,” he explained. “There are too many vacant lots; if you have too many surface parking lots and garages in your downtown, it’s not an attractive place.
“To always be well ahead of demand for the busy times … that kind of parking landscape is going to dominate a downtown, and you don’t want that,” he continued. “Providence figured this out 15 years ago; to make a downtown an asset, it has to be a place that people want to visit, and not just because of specific targeted destinations.”
Still another aspect of effective parking management is putting the inventory in the right places, said Zehngebot, noting that having 1,200 spaces literally across the street from the convention center, while convenient for visitors, isn’t exactly conducive to generating commerce and additional vitality in the city’s downtown.
A garage on the TD Bank lot would help create development opportunities along the block between Harrison Avenue and Falcons Way — and even on the site of the old garage itself, she said, while also facilitating efforts to create that aforementioned Yawkey Way look and feel on Falcon Way and bringing new life to a somewhat tired Market Street.
“There are several somewhat hidden corridors, like Market Street, which are pedestrian only,” she noted. “By increasing foot traffic through some of these places, we can help unlock some of their potential.”
Love agreed, and summoned the phrase “double duty” to describe what the authors of the parking garage have in mind for the proposed new garage. Elaborating, he said that it will not only meet parking-supply needs, but also funnel pedestrian areas, especially the Market Street corridor, while also perhaps serving as a catalyst for new retail and hospitality-related venues in that area.
“If we put the smaller garage on the TD Bank lot, with its lobby more or less oriented toward Market Street, we’ll be taking people who before would just get out of their cars and go directly to the MassMutal Center and not really experience the city, and require them to walk down Market Street to get to the convention center, and actually have a better experience,” he explained. “That’s already a well-scaled, well-designed space [Market Street], and we get that for free. At at the same time, the new garage could incentivize retail activity because it will have a measurable audience, a measurable demographic.”
Kennedy said city officials will closely consider the parking plan’s many recommendations, and as they do so, they will attempt to answer several questions. One of the biggest, he noted, is why the parking-utilization rate in Springfield is so low.
To be determined is whether the problem lies with awareness — do people actually know these spaces exist? — or resistance to using some of the city’s supply because of locations that might be considered poorly lit or unsafe, or still-sluggish economic conditions and a resulting high commercial real-estate vacancy rate. Or is it a combination of all these and other factors?
Also to be determined is whether a new 400-space garage (where 200 spaces must be reserved for TD Bank employees) and a 250-space surface lot on the site of the old garage will be sufficient to attract new development and handle the needs of the new businesses and residential units the city hopes to add in the years to come.
“We have a lot to look at and consider, and we need to continue the discussion with the downtown business community,” said Kennedy. “And we need to know exactly what we want before we move on financing.”

Casting Their Lot
Summing up the situation for Springfield, Love told BusinessWest that something has to be done about the Civic Center Parking Garage — either shoring it up at a high cost, something he wouldn’t recommend, or replacing it.
The key is for officials to get ahead of the situation and basically control the outcome, he continued, adding that the city still has an opportunity to do that. And while addressing the fate of that aging structure, the goal should not be to merely replace parking spaces, but to take major strides in the direction of more-effective management of the city’s parking inventory.
“Parking can and should be an integral part of economic development downtown,” said Kennedy, hinting strongly that the city has many questions to answer and steps to take before its parking supply can effectively play such a role.

George O’Brien can be reached at [email protected]

Insurance Sections
Third Generation of Ross Insurance Agency Looks to the Future

Kevin Ross and Maureen Ross O’Connell

Kevin Ross says he and Maureen Ross O’Connell work well together because they understand where each excels.


While Maureen Ross O’Connell said that her father didn’t want her to work at the family’s insurance company during her college years, her brother, Kevin Ross, laughed and said he knew since he was 5 years old that the company would one day be in their hands.
“I can remember my father bringing me into his office, and as a kid I would point to a desk and say, ‘that’s mine, dad!’” he remembered with a laugh.
Today, the siblings comprise the third generation of their family to run Ross Insurance Agency Inc. Their brother, Ernie, was also part of the team until he passed away last year. Sitting down with BusinessWest recently, the partners offered a look into an agency that, in many intriguing ways, is looking squarely to the future.
Like many family-business owners, both Ross and O’Connell said that their best education came from the daily interaction and on-the-job words of wisdom from the generation before them. And having grown up in the agency together, Ross added, the siblings have honed their collaborative technique.
“Family businesses have their struggles,” he acknowledged. “Every one of them does, and I won’t say that we don’t sometimes. But we know where we excel. Maureen runs the inside of the house, administration, the staffing, company communications, and I’m in sales. We play off each other, and that’s why it’s been so successful.”
And it isn’t just the walk-in, brick-and-mortar business where Ross Insurance excels. The partners long ago recognized the changing marketplace for their service-based industry, and have been steadily trending in the direction dictated by technology.
Like a seasoned IT whiz, O’Connell explained both how the firm has maintained a regularly updated insurance blog, and the efficacy of spiking its professional online presence with current information, all for the purposes of search-engine optimization (SEO). “When people Google, we want to be right up there,” she continued. “We’ve been working very hard on organic SEO for almost a year and a half. It’s been very beneficial.”
But as the third generation talked about the shifting sands of technology and how it impacts their industry, they stopped before a wall of photos in their office. In front of this large grid of Little League team pictures, all sponsored by Ross Insurance, O’Connell said, “as much as this digital age allows us to grow, it’s not to say that this community and this local piece isn’t important.”

Shop Talk
O’Connell and Ross are just the latest generation to put their stamp on the company — and they are well aware of all the contributions needed to take the venture to this point in its long history.
“In 1925 our grandfather, George Ross, had a grocery store in Holyoke,” Ross said. “But he decided that he wanted to get into the insurance business instead. Holyoke was growing and booming, and he saw it as a real opportunity. So he started the business from scratch.”
In the years after World War II, his sons, George Jr. and Ernie, and son-in-law Jim Gorman took over the firm. Returning to the story of her first days in the company, O’Connell said that she had always been a diligent worker — “I didn’t play any sports in high school; I worked.
“When I entered college, my father insisted that I quit work and devote my time to my studies,” she continued, adding with a laugh, “I was furious!”
The time soon came for Ernie to revisit his moratorium on her collegiate employment. “He called me one day in November,” she remembered. “The business had recently moved from Suffolk Street to High Street. And basically, he said, ‘the bills aren’t getting out — can you come and send out statements?’ It didn’t take me long to say, ‘sure!’ I was going to get paid, it was work, I was thrilled.
“I finished that job before the day ended,” she continued, “so my uncle had me start another project. That wasn’t finished by day’s end, so I had to come back, and then that went on for several days. Finally my uncle said to my father, ‘either give her a job or let her go.’ And so my Uncle Jim hired me as a file clerk. That was my first official job here.”
Meanwhile, her sibling contrasted this story with his own tale, as an early adopter of the family business. “I went into the office with dad on nights and weekends,” Ross said. “I just knew from day one that this is what I wanted to do. I went to business school at Bryant, and there was no question about it; I was coming into the family business.”
While their stories might have diverged up to that point, once they were part of the staff, the two spoke similarly of the benefits of working in a generational family business.
“From my perspective as an in-house employee with my beginnings here,” O’Connell said, “dad was harder on me than any of the other staff — from day one.
“But we had the greatest working relationship,” she went on. “I learned everything from that second generation. I would come in the morning, grab a coffee, and sit at the spare chair at my dad’s desk and just hash things out — talk about the business, where we were going, what we were doing. I loved working with them.”
With Ross nodding in agreement, she added, “it was sad, very sad, when they all retired.” Their father eventually bought out his partners in the firm, and when the time came for his legacy to be built upon by the next generation, both O’Connell and Ross said the transition was as smooth as could be expected.
“In the last few years of his owning the business,” Ross explained, “he went into semi-retirement and passed the reins of operation over to us, which gave us valuable education, but also gave him a comfort level, knowing that, when he was ready to sell out, we could take it on successfully.”

Linked In
Pausing to reflect back on her earliest days in the firm, O’Connell recalled her first official job at Ross, in claims. “In those days we paid our own claims. So that means a customer would call in with a claim, I go into Jim’s office, ask him if it was a payable claim, he’d have me pull the form, and from that moment on, every claim that came in, I’d pull the form. He made me research every single claim. It was the best education I could ever have gotten in the industry.”
The pair’s professional development in many ways mirrors their industry. O’Connell said that, while the office isn’t paperless — yet — much of its registration and filing is streamlining in that direction. Their marketing budget has seen a similar shift.
“Years ago, quite a bit of our business was walk-in,” Ross added. “We were on High Street, and that’s the way things were done. Now, we have an employee who handles all of our social media. We post four blogs a week on our on-site blog, and we post to our off-site blog. And the bottom line is that this works for our SEO.
“The first thing the modern consumer does before he makes a purchase, he gets on the computer,” he continued. “We want to be the first agency that pops up, so we get the opportunity to deal with that person. Maureen really has been spearheading this process.”
The new walk-in customer, she said, is anywhere with an Internet connection. “We’re writing policies across the state,” she said. “We wrote a workmen’s comp policy for a business in Hawaii. They had a salesman in Massachusetts, and they had to have a workmen’s comp policy. Their agent couldn’t provide it, so they got in touch with us.”

Neighborhood Watch
O’Connell said that the firm is in the formative stages of digital growth.
“But while the digital age is very young, we think it’s the future of our business,” she continued. “So we’re embracing that and working as hard as we can to make that a very important part of our future. We’re growing without bricks and mortar.”
However, in talking about the future of their industry, both O’Connell and Ross gestured to that wall of Little League pictures. “We’re a committed, third-generation business in our community,” Ross said. “Maureen and I spend a lot of time trying to grow our business and be the best answer for all of their questions and needs. But it’s also important to give back to the fabric of our community. Immediately since we took over in 1990, we paid close attention to two areas — youth and education; they’re important to us.”
O’Connell said that is the difference — a locally based family business maintaining its community roots. “When auto insurance in Massachusetts went competitive in 2008,” she added, “we first had the Geicos, Progressive, all of them. To compete with that, we have to be an important part of our community, giving back to it. The direct writers don’t do that. They don’t care.”
As part of the ongoing renovations at the Holyoke Public Library, O’Connell and Ross have created the Team Ernie Charitable Golf Tournament; the goal is to raise $60,000 for the construction project, and in turn the newspaper and periodicals room at the new facility will be named for their late brother.
Speaking to the technology that has secured their generation’s ascent into the digital age, O’Connell said that, while it is necessary to have a strong online presence, some things will never change.
“Yes, we want to be straightaway on Google searches,” she said. “Otherwise, you’re not getting that primary opportunity. And then you get the chance to show them the personalized customer service.
“Face to face is not obsolete,” she added. “But it is important to get them here first.”

Columns Sections
Rank-and-file Employees on the Hook for Employment Discrimination

Amy Royal

Amy Royal

“A person’s a person, no matter how small.” — Horton Hears a Who, Dr. Seuss
This quote describes perfectly the general takeaway of a recent federal court decision finding that rank-and-file, hourly employees can be sued individually in an employment discrimination lawsuit brought under state law.
While Title VII, which is our federal anti-discrimination law, does not permit individual liability at all, our state counterpart, Mass. General Laws Chapter 151B, provides for it.  In fact, state courts interpreting Chapter 151B have found that supervisors and managers can be sued individually in an employment-discrimination lawsuit. Now, at least according to the federal trial court in Massachusetts (as well the MCAD), rank-and-file, minimum-wage workers can be sued individually for employment discrimination.

Why the Court Got It Wrong
First, Chapter 151B is a statute that applies only in the context of employment. The statute is further limited in its application to only those employers with six or more employees. By its very nature, Chapter 151B applies to employers and those ‘persons’ standing in the position of some authority at the employer, such as authority to discipline or terminate, authority to affect the terms or conditions of another’s employment, or some other supervisory-type authority. For persons with such authority, they are acting as if they are the employer. Indeed, the entire purpose behind Chapter 151B is to prohibit employment actions on the basis of discrimination.
While Massachusetts courts interpreting Chapter 151B have recognized that supervisors can be held individually liable by virtue of their position in management and the accompanying authority that comes with such a position, they have not held that such liability extends to a rank-and-file worker.
In the recent federal court case allowing for individual liability of rank-and-file workers, the court erroneously cited a Massachusetts Appeals Court case (Beaupre v. Cliff Smith & Associates) as grounds for its decision. That case is completely distinguishable: individual liability was imposed on the company’s top leader, its president and controlling shareholder, not a minimum-wage, rank-and-file worker.
Secondly, a plain reading of the statutory language simply does not provide for the individual liability of a rank-and-file worker. Chapter 151B, in pertinent part, provides as follows:
“It shall be unlawful … for any person to coerce, intimidate, threaten, or interfere with another person in the exercise or enjoyment of any right granted or protected by this chapter, or to coerce, intimidate, threaten, or interfere with such other person for having aided or encouraged any other person in the exercise or enjoyment of any such right granted or protected by this chapter.”
While recognizing that the Chapter 151B statutory language is broader than its federal counterpart insofar as it uses the word ‘person’ whereas Title VII does not, Chapter 151B language seems to allow for individual liability in the context of supervisory or management-level employment only, not a rank-and-file hourly worker. Linking the word ‘person’ to ‘coerce, intimidate, threaten, or interfere’ and to the exercise or enjoyment of a right connotes the actions of an individual possessing some level of control, power, or authority, or the appearance thereof. In other words, the statutory language implies that the word ‘person’ applies to someone with power to act or to influence in some way.
Furthermore, words such as coercion, intimidation, threats, and interference suggest that an individual has some level of power or influence over an employee’s exercise or enjoyment of a right. Therefore, a liberal construction of the statute, which is required and which in turn accomplishes its remedial purpose of prohibiting discrimination in the context of employment, is to extend liability to those individuals in positions of authority or perhaps even perceived authority, but not to a rank-and-file worker.
Third, in enacting Chapter 151B, our liberal Massachusetts legislature could never have intended to ascribe liability for employment discrimination to a low-wage, hourly worker who has no authority over a co-worker’s employment. Extending liability so broadly and under such circumstances would completely run afoul of legislative intent.
Fourth, as a matter of pure public policy, it would be patently unfair to hold a rank-and-file hourly worker (and low-wage earner) individually liable for discrimination in the context of employment. Such an interpretation would clearly offend public policy.

Why This Case Should Not Matter Anyway
This case was from a federal court, not our state court. As such, it has no mandatory effect on how our state courts should decide if faced with this same issue. Further, it was a trial court decision, not an appellate one, and no Massachusetts appellate court (or even federal appellate court covering Massachusetts) has ever decided this specific issue. While the federal court points to a case from the Massachusetts Appeals Court, as noted above, that case is completely distinguishable (it involved a company president who was sued, not a rank-and-file worker).
Although these are compelling reasons for arguing why this case should not matter, do not discount this case by any means. Until our state’s appellate courts are confronted with and rule on this issue, this decision, for now, will provide support to any plaintiff’s attorney who decides, for whatever reason, to sue a rank-and-file worker.

The Problems This Case Presents for You
Now, as the defendant employer, you have a non-management, rank-and-file worker as your co-defendant in a lawsuit. This worker very likely does not have the means and/or resources necessary to obtain separate counsel. Your options then become paying for an attorney for this worker yourself, having your labor- and employment-law attorney represent both of you, provided there is no conflict, or having the worker proceed pro se.
All three options create potential issues. When a rank-and-file worker represents himself, you lose a certain amount of control over the way the case progresses, the litigation may not be as efficient, the worker may become uncooperative, and/or the worker may default. While there are benefits to a joint representation arrangement, such as presenting a unified front, cooperation from the worker, and retaining more control over the direction of the case, issues and/or conflicts could arise down the road, such as with strategy or settlement. Hiring a separate attorney for the worker is obviously costly. These types of issues will need to be explored carefully with your labor- and employment-law counsel.

Amy B. Royal, Esq. specializes exclusively in management-side labor and employment law at Royal LLP, a woman-owned, SOMWBA-certified, boutique, management-side labor- and employment-law firm; (413) 586-2288; [email protected]

Departments People on the Move

James F. Truden III

James F. Truden III

TD Bank has named James F. Truden III the Store Manager of the store located at 10 Center St. in Adams. An assistant vice president, he is responsible for new-business development, consumer and business lending, managing personnel, and overseeing the day-to-day operations at the store serving customers throughout Berkshire County.
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In a third return engagement, Carol Cioe Klyman an attorney with Springfield-based Shatz, Schwartz and Fentin, P.C. recently acted as co-chair of the 13th annual New England Elder and Disability Law Conference in Boston. Klyman, who concentrates her practice in the areas of elder law, estate and special-needs planning, estate settlement, guardianship, and trust and estate litigation, co-presented a workshop titled “The Hidden MassHealth: What You Need to Know That’s Not in the Rule
Carol Cioe Klyman

Carol Cioe Klyman

Book.” Klyman covered the unwritten rules of MassHealth long-term care policies and procedures, including the use of caregiver agreements and private annuities, transfer of assets issues, and the application process.
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Berkshire Hills Bancorp Inc. has appointed Geno Auriemma as a Director of the company and of Berkshire Bank.Additionally, Berkshire Bank intends to enter into a marketing arrangement with Auriemma, subject to final approval, whereby he will serve as a spokesperson for the bank. Auriemma has been head coach of the University of Connecticut women’s basketball team since 1986, is a seven-time national Coach of the Year and has won or shared the Big East Coach of the Year award eight times. He has served as president of the Women’s Basketball Coaches Assoc., and is involved in the national V Foundation for Cancer Research.
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Brad Larsen was recently named head coach of the American Hockey League’s Springfield Falcons by Columbus Blue Jackets Executive Vice President of Hockey Operations and General Manager Scott Howson. Larsen spent the past two seasons as an assistant coach with Columbus’ AHL affiliate, and was an assistant coach for the Springfield Falcons prior to the start of the 2010-11 season after concluding a 13-year playing career in 2009-10 with the AHL’s Portland Pirates.
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Lawrence B. Smith

Lawrence B. Smith

Lawrence B. Smith recently joined the Pioneer Valley Planning Commission as a senior planner. He holds a bachelor’s degree from the UMass Amherst Department of Landscape Architecture and Regional Planning. Smith comes to PVPC with more than 30 years’ experience in municipal planning and community development serving numerous Western Mass. communities.
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MassMutual recently named two individuals to senior vice president positions:
• Sri Dronamraju is the new Senior Vice President for Enterprise Technology and serves as MassMutual’s chief information risk officer, where he is responsible for developing and maintaining a multi-faceted approach for identifying and mitigating information risk, including strong policy, threat detection and deterrence, data-loss prevention, and employee education; and
• Scott Palmer was named Senior Vice President of Retirement Services Systems. He is responsible for managing information technology and systems for the corporate, union, nonprofit and governmental employers’ defined-benefit, defined-contribution, and non-qualified deferred-compensation plans for MassMutual’s Retirement Services division.
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Coldwell Banker Residential Brokerage office in Chicopee announced that Linda Blackburn has been added as a Sales Associate.  Blackburn will provide residential real-estate services in Chicopee as well as Belchertown, Palmer, Monson, Ware, and Warren.
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John Henry has been named associate at the environmental firm of O’Reilly, Talbot & Okun Associates in Springfield. Henry is a Massachusetts- and Connecticut-licensed professional engineer with more than 20 years experience in the civil-engineering and environmental-consulting fields. Henry is very active in solar-power development projects as well as soil and groundwater remediation projects at airports, industrial and commercial facilities, schools, and religious institutions.
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PeoplesBank in South Hadley recently named Jessica L. Wales Branch Manager.

Court Dockets Departments
The following is a compilation of recent lawsuits involving area businesses and organizations. These are strictly allegations that have yet to be proven in a court of law. Readers are advised to contact the parties listed, or the court, for more information concerning the individual claims.

CHICOPEE DISTRICT COURT
Brandi Sabourin v. Stop & Shop Holdings Inc.
Allegation: Negligent maintenance of premises causing injury: $4,667.23
Filed: 4/25/12

HAMPDEN SUPERIOR COURT
Alves Fuel Inc. v. W & I Construction Inc.
Allegation:  Non-payment of diesel fuel delivered: $26,414.52
Filed: 4/26/12

Delta Capital Group, LLC v. 66 Holyoke, LLC
Allegation: Failure to pay outstanding fees for services rendered: $300,000
Filed: 4/17/12

Falcetti and Clark Electrical Supply v. Classic Envelope Inc.
Allegation: Non-payment of electrical supply: $45,903.19
Filed: 4/18/12

James L. Hansmann v. Nationstar Mortgage, LLC
Allegation: Intentional and negligent infliction of emotional distress: $10,155
Filed: 4/26/12

Kristine Morrison v. Wheely Fun Inc.
Allegation: Negligent maintenance of property: $200,000
Filed: 4/12/12

HAMPSHIRE SUPERIOR COURT
Credit Cash NJ, LLC v. University Motors, LLC
Allegation: Failure to pay on credit-card agreement: $105,024.16
Filed: 3/29/12

Richard O’Riley v. Green Seal Environmental Inc., John Blaisdell, and Garrett Keegan
Allegation: Breach of contract: $37,000
Filed: 3/20/12

Roxanne H. Labonte, administratrix of the estate of Brian C. Labonte v. J.D. Rivet and Co. and New England Scaffolding Inc.
Allegation: Negligence on job site causing wrongful death of Brian C. Labonte: $25,000+
Filed: 3/22/12

NORTHAMPTON DISTRICT COURT
Reuben and Nicole Moore v. Lia Northampton Inc.
Allegation: Violation of Lemon Law: $14,740.86
Filed: 3/13/12

SPRINGFIELD DISTRICT COURT
ABC Supply Co. Inc. v. West Side Builders and Peter J. Lingley
Allegation: Non-payment on merchandise sold and delivered: $4,796.35
Filed: 4/19/12

Bank of America v. Brothers Pizza, Nicholas and Catherine Markantoris
Allegation: Failure to pay small-business loan: $89,779.90
Filed: 4/24/12

Daniel Toniatti v. Weatherproofing Technologies Inc.
Allegation: Failure to pay wages: $20,000
Filed: 4/2/12

Sherrill A. Simpson v. Travelers of MA
Allegation: Breach of contract and failure to pay medical expenses and lost wages: $3,850
Filed: 4/4/12

Tamika Rivera v. Geico
Allegation: Failure to pay all PIP benefits due: $1,076.53
Filed: 4/19/12

Company Notebook Departments

Hampden Bancorp Plans Cash Dividend
SPRINGFIELD — Hampden Bancorp Inc., the holding company for Hampden Bank, recently announced it had a $624,000, or 246.6%, increase in net income for the three months ended March 31, 2012, to $877,000, as compared to $253,000 for the same period in 2011. The provision for loan losses decreased $575,000 for the three-month period ended March 31, 2012 compared to the same period in 2011, due to decreases in delinquent loans, including non-accrual loans, declining impaired loans, and continued improvement in general economic conditions. In addition, the company’s total assets increased $37.8 million, or 6.6%, from $573.3 million at June 30, 2011 to $611.1 million at March 31, 2012. Securities increased $19.6 million, or 17.5%, to $131.5 million, and cash and cash equivalents increased $7.2 million, or 23.0%, to $38.3 million at March 31, 2012. Deposits increased $18.2 million, or 4.4%, to $435.4 million at March 31, 2012, from $417.3 million at June 30, 2011. The company has been focused more on obtaining core deposits than time deposits, according to Thomas R. Burton, CEO and vice chairman. “Economic conditions in our local economy continue to improve, as evidenced by a decline in delinquent and impaired loans as well as a nominal increase in loan growth,” he said. “We have reduced the provision for loan losses while continuing to maintain strong ratios related to our reserve coverage. Overall, we are pleased with the results but recognize that asset growth is necessary for continued financial improvement.” The board of directors declared a quarterly cash dividend of $0.04 per common share, payable on May 31, to shareholders of record at the close of business on May 16.

WMECo Launches Mobile Web Site
SPRINGFIELD — Western Massachusetts Electric Co. (WMECo) recently launched a mobile Web site for customers who use smartphones. Using the new mobile site, customers can view their account, pay their bill, view current power outages, or report a new power outage, all from the specially designed Web site. “It’s important to us that our customers feel we are accessible,” said Peter Clarke, WMECo president and chief operating officer. “They have told us they want more and easier ways to manage their accounts and receive information from us, so this is a logical next step for us to deliver on that request.” The mobile Web site works with either an iPhone or Android device. When customers access wmeco.com from a smartphone, they will be automatically directed to the mobile-friendly Web site.  In addition, the mobile site puts customers one touch away from calling or e-mailing WMECo customer service and from accessing the company’s Twitter, Facebook, and YouTube pages. Customers may also click a link on the site to view the company’s full Web site. WMECo, a Northeast Utilities company, serves approximately 210,000 customers in 59 communities throughout Western Mass.

Whalley Selected for ITC47 Contract
SOUTHWICK — Whalley Computer Associates (WCA) was recently awarded the ITC47 contract, which will allow it to continue to sell technology products such as desktop computers, laptops, servers, storage devices, and numerous other related technology products to organizations that use the Massachusetts State Purchasing Contract as a purchasing tool. WCA, a leading supplier to Massachusetts K-12 schools, partners with 181 of the state’s 320 school systems to provide technology products, services, training, and consultation. WCA also works with 57 cities and towns, 36 law-enforcement departments, 19 public colleges and universities, and 12 state agencies. “I think the number of Massachusetts organizations that have selected us as their primary vendor validates our decision to remain a large, regional, locally owned business,” said Paul Whalley, vice president and a former elementary-school teacher. Whalley noted that WCA is the sixth-largest vendor of the prestigious Massachusetts Higher Education Consortium (MHEC) contract, which has 600 suppliers providing computers, books, vehicles, science materials, furniture, and nearly every other product required by public Massachusetts colleges and universities. “WCA is also unique in having an office in the western part of Massachusetts and another in Central and Eastern Mass.,” said Whalley. “This allows us to rapidly and easily service those organizations that have offices throughout the state.”

Tighe & Bond Ranked Among Top Design Firms
WESTFIELD — The Engineering News-Record (ENR) once again ranked Tighe & Bond among the top 500 design firms in the nation, according to David Pinsky, president. ENR ranks companies by the previous year’s gross revenue for providing design services to domestic and international markets. Tighe & Bond ranked 272 in ENR’s 2012 report, which exceeds last year’s ranking of 309 and reflects the firm’s 2011 annual gross revenue of $36 million. “Last year was a very successful and profitable year for us,” said Pinsky. “We saw growth in all of our primary business units and acquired a sixth office in Portsmouth, N.H., that enables us to better serve our clients in that state, Southeastern Maine, and Northeastern Mass. All of this is backed by our ongoing commitment to deliver the highest-quality services to our clients on time and within budget.” The Boston Business Journal also ranked Tighe & Bond as one of the largest engineering firms in Massachusetts, according to Pinsky. In its 2012 Book of Lists, the journal ranked the firm 12th out of 25 top-billing firms.

Columbia Gas Supports Link to Libraries
SPRINGFIELD — Columbia Gas of Massachusetts has given a grant to Link to Libraries to help promote literacy and donate books to public elementary schools and nonprofit organizations in Western Mass. The funds will be used to supply all children entering kindergarten in Holyoke and Springfield with literacy bookbags. “We are tremendously honored that the Columbia Gas of Massachusetts has decided to join us in our mission,” said Susan Jaye-Kaplan, Link to Libraries co-founder. “This grant will have substantial economic impact in our mission to enhance early literacy and promote that all youth be proficient readers by grade 4.” Steve Bryant, president of Columbia Gas, noted that “Columbia Gas, as well as our employees, is committed to supporting families in need. Helping to provide books to kindergarten children is just one way we can help ensure that children get started on the right path to become lifelong readers.” Since its inception in 2008, Link to Libraries has donated more than 50,000 new books to area youth.

Big Y Adds 41st Pharmacy
SPRINGFIELD — Big Y Foods Inc. recently opened its 41st pharmacy in the World Class Market at 700 Main St., Suite 2, in Great Barrington. Pharmacy Manager Helen Costello, R.Ph., will be working alongside pharmacist Julie Samale, R.Ph. and technician Raeven Fuller to bring added convenience to grocery shoppers in Southern Berkshire County. Pharmacy hours will be weekdays, 9 a.m. to 8 p.m.; Saturdays, 9 a.m. to 5 p.m.; and Sundays, 9 a.m. to 1 p.m. Big Y Pharmacies plan to conduct special wellness events throughout the next few months, including total cholesterol and blood-pressure screenings, glucose and body-fat-percentage testing, and skin analysis. Big Y currently operates pharmacies throughout Massachusetts and Connecticut.