Employment law attorney Alan Crone was featured on Think Business with Tyler to talk how to properly navigate workplace relationships. We have the full interview below both audio and transcribed.
Tyler Martin
Hello. In today’s episode, we have the pleasure of hosting Alan Crone, an authority in employment law who will guide us through three pivotal aspects of running a successful business. We’ll first discuss actionable steps to safeguard your intellectual property. These are items, as a business owner, an entrepreneur, you create and you now want to protect so other people can’t copy or steal your creations.
Next, we’ll explore ways to cultivate a harmonious and productive workplace. Alan has some unique insight on this and what he shares, I believe, is very valuable.
And lastly, we’ll discuss the vital role of authentic relationships in achieving success. This is another little great bit that Allen shares that I think we can take a lot away from.
So, let’s get ready for some practical tips, some great advice. Let’s get started. Hi, Alan. Thanks for being on The Think Business with Tyler Podcast show. How are you doing today?
Alan Crone
I’m doing great. Thanks for having me on.
Tyler
Yeah, thanks for being on. Hey, I’d love to start out with learning a little bit about you. Can you tell us what you do and then just a little bit about yourself?
Alan
All right. Well, my name is Alan. I’m a lawyer and a recovering politician. I live in Memphis, Tennessee. I have a law firm, the Crone Law Firm, which is an employment law firm. We represent employees, executives, and entrepreneurs in legal matters that affect their ability to make money. We represent people. Sometimes those people have businesses, and that’s where the entrepreneur comes in.
Tyler
Very cool. What do you see when it comes to employment law, in particularly smaller businesses, let’s say, under 10 million in revenue? Do you see any type of pattern? What are things that come up typically?
Alan
Well, when you’re talking about a business of that size, unless they’re in a particularly litigious area where maybe they have a union or for whatever reason, they’ve just got people coming in and out. Those businesses, in my experience, tend to be fairly stable. The biggest problem I see is that business owners at that stage put human resources and personnel issues off to the side and don’t really think about it.
They’ve got 25 or 30 employees, they think, well, we’re not really large enough to worry about employment law. Then they may have a one-off situation that causes them a lot of problems, a wrongful termination or maybe a wage-an-hour issue. And a lot of that can be avoided by being a little proactive with your HR compliance.
Tyler
Got it. Now, one thing I see periodically, even with small businesses, is like when it comes to overtime, doing it correctly or treating people whether they should be salary over time. Any thoughts around like… Because small business owners, they’re overwhelmed. To your point, they don’t have HR. Any best business practices or something that can do to reduce those types of errors? Or how do you deal with it?
Alan
Sure. I think probably one of the most prevalent misclassifications out there are independent contractors versus W2 employees. And it’s my personal benefit, having been on both sides of those kinds of cases that most people who are walking around calling themselves independent contractors are really employees.
The long story short there is they’ve got to be independent and they’ve got to be contractors. If you’ve got someone working with you who works 40 or hours or more a week for you, they don’t work for anybody else, they come to your place, they do what you tell them, 9 times out of 10, maybe even 99 times out of 100, that person is an employee.
If you’re calling them an independent contractor, you leave yourself open for a lot of hurt. The way most of the time that those issues are raised is not while they’re working there, but if you can fire them or they get mad and quit and they go see a lawyer about, well, I was fired, and the lawyer may say, well, you don’t have wrongful termination claim, but how were you paid?
They get into it and they realize, oh, this person and the five other people or 10 other people or 100 other people that are in that job classification are likely misclassified.
Then you can have problems with the plaintiff’s lawyer, but you can also have problems with the Department of Labor, the Affordable Healthcare Act, and some other places and who now come wanting their 7.25% of employment tax and everything else. So, it’s one of those things that can save you money in the short term. But if you ever get caught, it can be very just devastating for a small employer.
Tyler
Yeah. In California, one of those triggers too, you just made me think. A lot of times when it may or may not be a disgruntled case, but contractor winds up their project or winds up their assignment, and they run down to the Employment Development Department here and file an unemployment claim.
And it’s very interesting because the state usually will go, Okay, no problem. We’ll give you unemployment, even though you’re 1099. But then they head over to the employer and do a full-blown audit of all their independent contractor. That’s a trigger that is after the fact. A lot of times clients don’t even think about that until, unfortunately, the claims filed.
Alan
That’s a really good point. It doesn’t happen as much in Tennessee and states like that, red states like Tennessee, because the department isn’t looking… They’re looking for people come in, they’re looking to reject people, and so they don’t really get that far. But a lot of states like Illinois and California, you’re absolutely right, they’ll keep going.
When I first started doing this 30 years ago, the federal agencies and the state agencies that were in this field really didn’t talk to one another. If you got in trouble with the Department of Labor, they weren’t going to call up the IRS and say, hey, I’ve got this person with misclassified workers. You would deal with the Department of Labor and you’d move on.
There are all kinds of other permutations of that. But since 2010, I guess, whenever the Affordable Care Act went into effect, those federal agencies are starting to talk to one another and they have reciprocal agreements so that if one spot ship, then they let everybody else know. It’s basically because of that the 50 minimum employees that the Affordable Care Act kicks in. Those departments, once they started doing that for the IRS, they realized how beneficial it was all the way around.
Now that’s entrenched. A Democratic administration is going to be more aggressive with that than Republican administrations. But even the Republican administrations are always looking for cash. It sounds like a small thing, but if you’ve got more than one worker who is engaging in work and misclassified, it can be exponentially expensive because you have to pay your own lawyer.
If you’re liable, you’re also going to have to pay the other side’s lawyer. Whereas in most employment matters, employment statutes, they’ll look at, well, okay, how much did the plaintiff get? They only got 10,000 and it took $100,000 in legal fees to get there. We’ll shave that down. But under the Fair Labor Standards Act, it’s written into the act that it’s a remedial statute and the tie goes to the runner, in this case, the employee.
If you’ve got a $3,000 claim, I’ve seen $30, $40, $50, $70,000 attorney’s fees from the plaintiff side because the employer led with his chin and said, I’d rather pay you, lawyer, than pay them. At the end of the day, you end up paying your lawyer, the claimant, and the claimant’s lawyer. So, it’s not something to play around with.
Tyler
Wow, that can really add up. Hey, you have a great book, The Law at Work. I have a couple of questions for you. Who would you say that book is for? Is that for small businesses? Who does it target?
Alan
Yeah, it really is for any decision-maker who got people working for them. It also is good for employees and executives because I tried to write it in such a way that it was very approachable. You don’t have to be a lawyer to read it. In fact, if it was written for lawyers, it’d probably be about times the size because you’ve really got to explain things to lawyers. But I try to make it very approachable.
There are lots of stories in it that illustrate the various points, and it just explains the legal system in America as it relates to most employment issues. We’ve got a chapter on wage now and overtime. We’ve got a chapter on non-competes, wrongful terminations, discrimination, harassment, and that thing. You can read it cover to cover or you can use it as a reference book.
If you’ve got a particular employment situation, you can read it and it’s not going to solve all your problems or answer all your questions, but it’ll cover the basic stuff so that you know what you’re doing with and you can make informed decisions going forward.
Tyler
Speaking of non-competes, what’s your thought on non-competes? There’s some school of thought that I believe it’s Congress or I don’t know who is talking about or creating rules that potentially could make non-competes obsolete. What are your thoughts on those in terms of having non-competes and contracts and then maybe even if they’re enforceable?
Alan
Well, I guess it really depends on which side of the V you’re sitting on. If you’re a business owner, you’ve got a legitimate interest in protecting your trade secrets, protecting the investments that you make in certain workers. I think that there was an old adage in law school, hogs get fat, pigs get slaughtered, and business has used these agreements to really try to take advantage of people down the organizational chart, the one that the FTC, which is who you’re thinking of.
Tyler
FTC, you’re right. Thank you.
Alan
There are non-competes out there for folks who work in sandwich shops. Someone putting a sandwich together is saying that they can’t go work for another member of that franchise outfit or even another competing company. That seems a little far-fetched to me because is there really a business interest that you’re protecting?
But I think salespeople who become the face of the agency or high executives who have access to all kinds of strategic and tactical information on a case-by-case basis, I think those are enforceable.
Now, I’ll tell you a little secret. The enforceability of these agreements is not nearly as valuable as the threat of the enforceability. Most of them, as they’re written, are unenforceable. It depends on what state you’re in.
In Tennessee, for example, we have what they call the Blue Pencil Rule, which means the judge can take the agreement and rewrite it and make it reasonable. There are some states where if it’s unreasonable in a little bit, the whole thing gets thrown out. But I always say one of the worst curses I can give you, Tyler, is may you have a good defense to a lawsuit because having a good defense to a lawsuit is expensive.
I always say it’s one thing to be guilty and try to make a deal to get out. It’s another thing to know you’re right and then be looking down the barrel of a five-figure or even six-figure legal bill to prove that you’re right. That happens a lot of times in non-compete cases where I see frequently someone will come to me and say, I have this non-compete. What do you think?
I say, well, I don’t think it’s enforceable, but that doesn’t mean anybody’s going to hire you because they don’t want to hire a lawsuit, or they may hire you and then when the cease-and-desist letter comes, you may be on your own to defend it. Then you’re out of pocket $10, 20, $30,000, depending upon how serious the other side is.
We’ve had a lot of success in fighting those things, but it can come down sometimes to who has the deeper pockets. I think that’s one reason why the Congress has looked at a number of times the FTC, the NLRB under the Biden administration has looked to undermine these agreements because they’re often overreaching and the people who are subject to them don’t have the resources to fight it.
It’s still a very powerful tool. People ask me all the time, Are they enforceable? I always say, they may not be enforceable, but they’re very effective. On the other hand, when people say, I want to get out of it, I say, that’s probably not as hard as you think. Let’s think through a creative way to get you where you want to go.
Tyler
Yeah, I had to learn that the hard way. I had a staff member I had hired, and we got sued by a company that said he was breaking the non-compete. And we were fine. We had 100 % no issue, no chance they were going to win it. But I ended up writing them a check for $5,000. And I also gave the law firm that represented us, I think it was about $30,000.
It was really just a nuisance lawsuit. It was really, I think, just tactics to intimidate us. Frankly, at work, because next time I ran into someone that was working there, I said, I don’t have anything to do with it. I can’t waste the time or I don’t really want to deal with the money lost. I guess they do, especially in California, it can be used as a tool, even though they’re not going to win. That’s not really the point. It’s more almost like a nuisance type thing, I think.
Alan
I would say it’s not a brick wall, but it is a big speed bump or speed table. You’ve got to slow down and negotiate it. And sometimes that’s enough to say, well, I’m going to hire the person who doesn’t have a non-compete. They’re both equally good. I’m going to go that direction, or some other tactic.
But if you want to get around them, you can. If you’re an entrepreneur and you want to protect certain processes or keep a valued employee from going somewhere else, my advice there is to get a custom, drafted, non-compete. To get something off the Internet, it may or may not work.
But if you’ve drafted something pretty tight that’s clearly customized to this particular situation and this particular business interest that you’re trying to protect, it’s going to be a lot more credible and a lot more enforceable than if it just says, okay, they’re out of the whole industry within 100 miles of this location for two years. You’re going to have a lot of problems enforcing that.
But if you recite what the business interests are and you recite, I’m going to keep out of this particular industry with these particular kinds of product lines, you’ve got a much better chance of making that work.
Tyler
Very cool. Hey, I wanted to switch gears. I want to talk a little bit about intellectual property. When you’re talking small businesses, once again, maybe under 20 million, under 10 million revenue, where does that fit in for small business? Is that something they should be thinking about? What’s your thoughts on that? Or is this something just for big companies?
Alan
Absolutely. I think it’s for everybody. In 2023, what sets you apart? It’s your intellectual property. It’s your whatever systems you have to scale, that’s intellectual property. Who your vendors are could be intellectual property.
Whatever gives you a competitive advantage, that’s where you want to use these agreements, nondisclosure agreements, non-compete agreements, non-solicitation agreements to protect those relationships, to protect those systems and processes that you’ve invested countless hours and probably a lot of money in.
I think you really want to start thinking about that when it’s just you and really thinking through, okay, what makes my business special and protecting it, and then developing a culture of that.
We talk about it in the book that there are enumerable situations where people have this elaborate confidential information or proprietary information that they’ve assembled and they put some protections on it and then time passes and they forget about it. Nobody in the business knows that it’s confidential. It’s just taken for granted.
It’s not something you could just check off your list and say, oh, I’ve got this NDA. I don’t have to worry about it. It’s something you need to look at all the time. If it really is something that sets you apart from your competition, you want to make sure that you’re protecting it.
It’s not just the formula for your buffalo cheese dip at your restaurant. That certainly is a trade secret, but it could be a lot of different things that you’re not really thinking about that sets you apart, everything from your customer list to how you pack your boxes or whatever it is that gives you that competitive advantage.
It could be a lot of different things that you’re not really thinking about that sets you apart, everything from your customer list to how you pack your boxes or whatever it is that gives you that competitive advantage.
Tyler
Okay. I wanted to talk about best practices in terms of what employers can do. Let’s say hypothetically, an employee comes to the employer and has a complaint about something, whether it be harassment or maybe they think she get overtime. What should an employer do at that point? Are there certain steps they can take to either diffuse it or eliminate it from escalating? What’s your thoughts around that?
Alan
Well, I think there are two answers to that question, what to do at that point? I’m going to put that aside. Let’s come back to it. Sure. There’s an old Chinese proverb. The best time to plant a tree is today or 20 years ago. What you want to do is go ahead and plant your HR compliance tree right now before you have an issue.
Let’s say you’ve got 25-30 employees. You may not have enough HR where you’ve got a full-time person. But get there. There are all kinds of fractional services now. You can go and find you somebody who will be your HR consultant and maybe give you 10 or 20 hours a week or 5 hours a week, whatever you need, but can make sure that your employee handbook is good.
Make sure that you’ve got documented processes and procedures. Make sure that you’ve got good job descriptions. Job descriptions are the most important tool that you have in your business that nobody pays attention to.
Again, this is something you want to make sure your job descriptions are good, that they’re accurate, because an employment lawyer like me comes in, or the Department of Labor comes in, or the workers’ comp insurer comes in.
First, they’re going to see is show me those job descriptions. You want to make sure that those job descriptions are accurate and that they reflect the essential functions of those jobs. Then you really want to inculcate a culture of whatever your culture is in your business or the culture that you want to have so that you have something to benchmark people against as you do training, as you do discipline.
I like to make a distinction. I don’t like for my clients to have disciplinary policies. I want them to have training policies because I want to make it clear, if God forbid, we get into court, I want to make it clear that you’ve done everything you can do to make this person successful.
The last thing you wanted to do was fire them. One of the reasons why people aren’t good at that is that they haven’t thought it through. A lot of them really don’t understand what they’re hiring people to do.
I’ll give you a great example. I’m a lawyer. I hire an accountant. I don’t know anything about accounting. If I just assume that the person, I hire is going to be able to come in and through some accounting knowledge, be a great accountant, then I’m wrong because I got to train them what the best practices to be an accountant at the current law firm.
I got to tell them what my expectations are, and I’ve got to know enough about what I’m trying to do that I can get an accountant, not with just good experience generally, but good experience with what I need them to do. If I don’t understand that job, then I can’t really communicate that.
Then it’s just a matter of luck. If I end up getting somebody that’s good, I’m probably going to go through three or four people before I really get somebody that knows what they’re doing. Then the last thing I’ll say is you got to have a mission, and I’m a big believer in this.
My mission at the Crone Law Firm is to transform the American workplace by putting people first one case at a time. My folks can recite that. The first thing I want to make sure is that that’s what somebody wants to do. I want to make sure somebody wants to come in and represent people in employment situations.
If I’ve got a lawyer, what they really want to do is be in family law or criminal law, then they’re not buying into my mission. If I can articulate that and then I can measure training and discipline against my mission and my core values, then all of a sudden, the conversation about whether they’re going to continue working at the Crone Law Firm is going to sound a whole lot different.
You want to make sure that you’ve got a diverse workplace in terms of what people look like, the accidents of nature. Are they black, are they white, are they from India, are they from New York? To me, those are accidental diversity. What you want is you want a homogeneous workforce when it comes to your mission.
If you’ve got people that are passionate about your mission and passionate about helping you accomplish your mission, then all of a sudden, you’re not going to have nearly as many personnel or disciplinary matters as you did before when that wasn’t your yardstick.
That’s a brief overview of my gospel on that. I tell everybody that. I think the best first step in HR, compliance, and staying out of the workforce is hiring the right people and providing them whatever they need to do well, and then you’re going to get to a place where you’re never firing anybody.
If you’ve got an HR person that’s working hand in glove with you, then you can make sure you’ve got somebody watching to make sure that your punishment or your training outcome for person A is the same as person B, and you don’t have any anomalies that give a smart plaintiff’s lawyer a foothold to say that you’ve been discriminatory.
Then the last thing I’ll say is you really need to cast a wide net when you’re hiring. If I just go back to my law school and I hire lawyers out of my law school, I’m going to get a certain person.
But if I go to different law schools, I go to HBCUs, I go to women’s law schools, I go to law schools that are known for diversity, and I get a much larger group, then I’m going to have a diverse workforce without setting out to have quotas or anything else.
But if I just go to my friends and buddies and I’m just going to end up with a bunch of white guys, and that’s not necessarily a bad thing. But in today’s world, you’re so much more competitive and you’re going to be so much more successful if you’ve got all kinds of viewpoints and background.
Tyler
Life experiences and stuff like that.
Alan
Yeah, all that. And if they all are the same in the sense that they’re passionate about your mission, man, you’re going to have a tremendously powerful company.
Tyler
That’s great. I love that. Hey, so now we’ve got this good foundation set up, someone still comes and complains, whether it be harassment or whatever. What should happen at that point? What are some best practices when that happens?
Alan
Well, the first thing you want to do is make sure that you take the complaint very seriously and make sure that the person knows that you take it seriously and you look into it. There are so many different kinds of fact patterns, but let’s just say someone comes and says, I’ve got a coworker that’s making me feel uncomfortable from a sexual standpoint.
That’s where you want to do a down and dirty, very detailed investigation very quick, very quickly, and you want to follow it wherever it goes. Then if you get to the point and there’s a problem, the law requires that you take the prompt, appropriate, remedial measures. It depends on the nature of the conduct.
But if you’ve got a situation where you’ve got this problem, then you can counsel the offender if that’s appropriate. You can give them a warning, you can fire them, whatever you think is appropriate, but understand you’re setting a precedent for the next time.
You just really want to make sure that you talk to as many people as possible, and at the end, that you don’t do anything that would chill anyone else’s attitude towards coming forward. You want to make sure that the person who comes forward is protected.
Not necessarily that gives them cart blanch to do anything, but you don’t want them to regret having come forward. You might have to take a very courageous stance. I’ve seen situations where the offender is a big producer and you got to do something and people are afraid that the person is going to leave, but the conduct is serious enough.
That’s really where you can say you have these values, I’ve got these core values or whatever you call them, and people are watching. If somebody’s value materially violated one of those values, they’re going to look to see, do you put money ahead of those values? Do you put personal relationships ahead of those values, or do you really mean that you rule the firm, you govern the firm by those values? That can be where the rubber meets the road.
But sometimes you find out, for example, that your buddy who’s a supervisor is just a racist and treats the black employees terribly and you didn’t know it and you find out about it, you may have been a tough conversation you have to have, you may have to put that value of your value of integrity ahead of your personal relationship and make a change.
Tyler
Yeah. Those are some culture defining moments for sure, depending on the decisions you make. I like that. Hey, one last question I have for you. I want your opinion. So, our culture, society is changing in the sense that people now will go on to social media, they’ll talk about how much they’re getting paid.
They’ll bring their camera into manager meetings, and while the manager is terminating them, recording them, it’s just everything seems a lot more visible and it gets around. I mean, it just can go viral, like overnight, something someone says. Any thoughts around one, where that’s going, and two, just from an employer standpoint, what we should be aware of and just maybe be more sensitive to the fact that society is this way now?
Alan
Well, I think you absolutely have to take that as a given. And if you’re an employer and you’re having a tough conversation with somebody, you need to assume, at the very least, it’s being audio recorded. I tell people all the time, you ought to assume that you’re being video and auto recorded all the time. You shouldn’t have one way you act with the cameras on and another way you act with the cameras off.
But a business can control the use of cameras and microphones in their workplace. In some instances, that’s very appropriate going back to intellectual property. If you are a material fulfillment center, and you’ve got an assembly line, you don’t want people talking pictures of that and that’s perfectly acceptable.
I’ll give you advice on both sides of that. When employees or executives come to me and say, I’m about to go into this meeting, should I record it? I always say that recollection of that meeting is probably more beneficial to you than the actual recording and for a lot of reasons, and not the least of which is if you secretly record that conversation.
The other side’s lawyer is never going to call it a recording. They’re going to call it that secret recording you made, that surreptitious recording you made. I mean, they’re going to make you the bad guy for recording it.
Now what I do tell them to do is if you think for some reason that you want to have it recorded, then take your phone out, put it down on the on the table and say, “I’d like to record this call, record this meeting.”
And if the person says, no, I don’t want you recording, you say, well, that’s unfortunate, and then turn off the recording. That’s very powerful from an evidentiary standpoint. I’m just here to tell you and if they were willing, then you record it and you’ve got a good record.
And more than likely the person on the other side is not going to do anything different than they would have done had you not done that. And so, you’re going to get a good recording of it. I just am not a big advocate of surreptitious recording. I think more often than not it comes back to haunt you.
And on the employer side, I would not get upset when that happens. And I would say, sure you can record this because hopefully you’ve done your homework and what you’re about to do, you could do on television in front of the whole world and you’re going to look like a much nicer guy with a recording that without it.
I would make a note of that so that if, let’s say, two weeks later or a month later or six months later, this person makes a claim and what they say happened in that meeting is different than what actually did happen.
Then, you can say to your lawyer, to ask his lawyer whatever happened to the recording of that conversation. And that can be very powerful, particularly if it contradicts everything that the person has said to their lawyer. So, I wouldn’t shy away from it too much anymore. But it’s certainly something that an employer can regulate on their premises.
And I say one last thing about social media. No matter which side of the V you’re on, just understand that social media is admissible. It’s something that’s going to be used down the road. If you’re an employee, don’t badmouth your employer on social media. If you’re an employer, don’t badmouth your people on social media.
It seems like that should go without saying, but some people think for some reason, social media is just a different world, and it doesn’t count. I actually had somebody well, social media is Facebook. It doesn’t count. I said, yeah, it counts. It counts a whole lot.
Tyler
Yeah. Hey, I always love to wrap up with this final question. Is there something in your journey of life or a business you’ve got a business or a life tip that you can share with us that we can possibly apply to our own lives?
Alan
Well, I tell you, I think business is all about relationships, and success in business is all about relationships. And when I was a younger person, I used to think that networking was kind of BS. And upon reflection, I think the reason I thought that is a lot of the people I saw networking, it appeared to me.
And I didn’t think this at the time because I didn’t know enough to think it, but it was all very transactional. Their networking was, what can this person do for me? But if you’ve got a true relationship with a lot of people where you’ve helped people, you’ve helped a number of people succeed, that comes back to you.
And I can’t tell you how many opportunities that I have taken advantage of that have come to me simply because of the relationships in my life. And if I had it to do over again, I would slow down, and I would take advantage of more opportunities that came to me because of my relationships. So that’s the big business advice I’ve been given out lately.
Tyler
Yeah, that’s a great one. You and I kind of have a very similar story. I think early on, I didn’t realize the power in that network and connecting with people on a deeper level. And if I could rewrite my chapter in that area, I definitely would have. So that’s great.
Hey, so your book is the law. Well, your website excuse me. And I’ll put this in the show notes thinktyler.com. Thelawatworkbook.com once again, thelawatworkbook.com if people wanted to go anywhere else, Alan, just to reach out to you or connect with you guys, is there anywhere else you’d like them to go?
Alan
You can just Google Alan Crone lawyer, Memphis, and you’ll get more response than you know, we’re in Memphis, we’re in St. Louis, and we’re in Chicago, and it’s my very slow plan of world domination.
Tyler
Love it. Well, you’re getting there. Thank you so much for sharing your wisdom. You have a way of breaking down these topics so they don’t sound lawyerly and they sound very easy to digest. So, we appreciate it and hope you can come back someday. So. Thanks, Alan.
Alan
Love to do it.