Page 23 - BusinessWest October 3, 2022

Aging
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majority had departed from the long-standing legal rule that “stray remarks” are insufficient to prove discriminatory bias by holding that the rule can never apply to a manager who has the power to make employment decisions. The dissent also took issue with its apparent intolerance for modern suc- cession planning in industries dominated by aging employees.
For now, though, the majority opinion remains the law, and it will certainly be relied upon by attorneys trying to avoid dismissal in employment cases. What does this mean for employers? For one, it means that
Succession
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may face upon their passing that may require the liq- uidation of the business, despite best intentions.
It is also critical to obtain an accurate valuation of the business regardless of who will take over or inher- it the enterprise. Such a valuation encompasses tan- gible assets, such as real estate, buildings, machinery, and equipment, as well as intangible assets, such as employee loyalty, manufacturing processes, customer base, business reputation, patents on products, and new technologies. Employing a professional valuation company is recommended, as there are many differ- ent factors that affect the value of a business.
Once the business has been valued, it is necessary to determine the method of transferring the business. Some options for transferring a business include gifting, the use of a trust, buy-sell agreements, and
management-level employees who have the author- ity to hire, discipline, promote, terminate, or make other employment decisions must be even more careful about remarks they make in the workplace. Comments that may have previously been brushed aside by courts as nothing more than “stray remarks” may now be considered evidence of a high-level cor- porate strategy to discriminate against employees in all manner of employment decisions, not just RIFs.
Also, employers who are thinking about succes- sion planning need to be extra careful about the rhetoric they use to describe their concerns, needs, wants, and strategies, especially if their plans involve
life-insurance-funded plans. The choice of succes- sor will strongly influence this decision. Surely, a plan that gives the business to children or family members would differ greatly from a plan that requires a third party to purchase the business owner’s interest. When transferring to a child or related party, the business owner may gift some of the company’s value, where- as, when transferring to an independent third party, the business owner would most likely want to be paid the full fair market value of the business.
As various plans may be established and the specif- ics of the business must be considered, each different plan must be reviewed on its own merits. The process of choosing a succession plan involves numerous fac- tors, and there are many pitfalls along the way. Thus,
it is best to consult with the necessary professionals,
eliminating jobs. Partnering with employment coun- sel at an early stage can help reduce legal risk and shield sensitive conversations from being used in any ensuing litigation. u
Erica Flores and John Gannon are partners with
the Springfield-based law firm of Skoler, Abbott & Presser, specializing in employment law and regularly counseling employers on compliance with state and federal laws, including the Age Discrimination in Employment Act; (413) 737-4753; eflores@skoler- abbott.com; [email protected]
such as attorneys, financial advisors, and accountants, to assist with the transition and to allow as much time as possible to plan and make the transition. By doing so, business owners can ensure the vitality of their business for many years to come. u
Gina M. Barry is a partner with the law firm of Bacon Wilson, P.C. She is a member of the National Academy of Elder Law Attorneys, the Estate Planning Council, and the Western Massachusetts Elder Care Professionals Assoc., and concentrates her practice in the areas of estate and asset-protection planning, probate and trust administration, guardianships, conservatorships, and residential real estate; (413) 781-0560; [email protected]
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