March 5, 2024 • 41 mins
Unlock the secrets to navigating the ever-changing legal landscape of small businesses with our latest guest, Michael Salchert. As a seasoned attorney for veterinary professionals, he brings a treasure trove of insights into avoiding legal pitfalls and ensuring your practice thrives. This episode is a must-listen for entrepreneurs who understand the value of being proactive in legal matters, whether you're reviewing commercial lease agreements, grappling with non-compete clauses in employment contracts, or staying compliant with the latest legislative changes like the Corporate Transparency Act.
This conversation with Michael is like having a backstage pass to the legal intricacies that could make or break your veterinary practice. From dissecting the potential hazards in seemingly benign lease terms to the Minnesota Safe and Sick Time Law's impact on even the smallest of employers, we're covering it all. Ensure your advisory board is stacked with the right experts as we guide you through building a protective legal fort around your business interests. Prepare to arm yourself with the knowledge to confidently step into legal arenas that often intimidate the unprepared.
Wrapping up, we take a deep dive into the world of employment law. We dissect the new Minnesota legislation that changes the game for non-compete enforcement, and what it means for your current and future contracts. Compliance isn't just about ticking boxes; it's about understanding the spirit of the law, such as why employee welfare is at the heart of the Minnesota Safe and Sick Time Law. By the end of our chat, you'll be equipped with the strategies to keep your practice not only running smoothly but also fostering a supportive environment for your team.
GUEST INFO
Michael Salchert
Shareholder - Larkin Hoffman
Phone: 952-896-6712
msalchert@larkinhoffman.com
larkinhoffman.com
linkedin.com/in/michael-salchert
Host Information
Bill Butler – Contact Information
Direct – 952-208-7220
https://butlervetinsurance.com/
https://www.linkedin.com/in/billbutler-cic/
Schedule a Strategy Session with Bill – Strategy Session
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I cannot tell you the investment that I made in
working with a qualified,competent attorney who has
experience in the arena.
It was worth every penny that Iinvested and it wasn't an
expense.
I didn't call it an expense, itwas an investment because it
saved me a lot of headache andtime to make sure everything was
(00:20):
proper and done along the way.
Speaker 2 (00:30):
Welcome to the Veterinary Blueprint Podcast
brought to you by Butler VetInsurance.
Hosted by Bill Butler, theVeterinary Blueprint Podcast is
for veterinarians and practicemanagers who are looking to
learn about working on theirpractice instead of in their
practice.
Each episode we will bring yousuccessful, proven blueprints
from others, both inside andoutside the veterinary industry.
(00:50):
Welcome to today's episode.
Speaker 1 (00:54):
Welcome to this episode of the Veterinary
Blueprint Podcast.
I am your host, bill Butler,and today we're joined by
Michael Seltzer, an attorney andshareholder with Larkin Hoffman
in Minnesota.
Michael is based in Minnesota,texas, and has extensive
experience helping veterinarianswith buying and selling
practices, forming professionalcorporations and partnerships,
advising veterinarians oncontracts for employment,
(01:15):
partnerships, real estate andother business related matters.
So Michael has extensiveexperience in all of those areas
.
We both are members of theMinnesota Veterinary Medical
Association, which is howMichael and I got connected and
I'm just grateful to have himjoin and share his insights with
some recent changes for smallbusinesses and we're going to
(01:36):
speak about how that affectsMinnesota business owners and
veterinarians, but then alsosome larger scale items.
So welcome, michael.
Speaker 3 (01:42):
Thanks a lot, bill.
I appreciate you having me onyour podcast.
A little background for me is Iin my previous career.
I was working at a dental fieldfor a manufacturer for many
years and then I went back tolaw school and I became an
(02:03):
attorney and I saw anopportunity where the dentists
or the practitioners would beretiring because they're part of
the baby room generation, andso I started helping them with
their transitions, and it alsomoved over to veterinary
practices, which I really enjoyWorking with veterinarians to
(02:24):
help them sell their businessesand also new veterinarians to
help them buy.
And it's been great creating anetwork of other advisors like
Bill to work with so we could bea team and help the
veterinarians be as successfulas they possibly can.
Speaker 1 (02:42):
I think that's really critical for entrepreneurs in
general is just building a goodteam or network of advisors,
whether that's attorneys, cpas,insurance or other.
I think that often gets lostand you don't realize what you
need until you go oh, I don'tknow how to put an employment
agreement together, or I don'tknow how to do insure something,
(03:04):
or I'm going to buy a building.
What are the implications ofthat?
It's not just working with thereal estate agent, it's also
some contractual stuff.
So I'm glad to have you on thepodcast today, especially to
talk about some timely issuesthat are recent legislative
issues and are changing thelandscape of owning a small
(03:28):
business, specifically aveterinary practice.
So I'm glad you could join ustoday.
You and I were chatting beforescheduling the podcast and one
thing that you mentioned to methat kind of was like oh, tell
me more.
Was the Corporate TransparencyAct and how that's going to
affect small businesses.
And in the world ofentrepreneurship, legislation
(03:53):
gets passed and all of a suddenboom, you've got to make changes
as a business owner andsometimes you're not up on stuff
.
So why don't you walk usthrough what the Corporate
Transparency Act is and howthat's going to affect small
businesses and what they can doto make sure they're up to speed
on that.
Speaker 3 (04:13):
Yeah, so in the last couple of years there's been a
movement toward at the federallevel to create an act or
legislation to help identifyowners of shell companies in
order to fight terrorism.
(04:34):
Right now, the United States,prior to this act, was one of
the few economies that allowedan anonymous ownership to exist
on public records, and so it wasreally difficult for the FBI or
other investigative agencies tofind people who own these LLCs.
(04:59):
That could be shell companies,laundering money, terrorist
organizations or whatnot, andmost of these existed at the
lower level of businesses, thesesmall business entities, and
the larger ones, the publiccompanies.
That information is easy tofollow or, if they're licensed
(05:19):
for some reason or whatever, orwhatever they're doing, then
they have that informationalready.
So they passed that act andthat act is going to go into
effect on January 1st and youhave one year from January 1st
to report who the beneficialowners are of each company,
(05:43):
unless there's an exception thatdoesn't require you to report,
but most small businesses willhave to report.
And then, after January 1st, ifa new business is created,
you'll have 90 days to make thereport, and you make the report
(06:03):
to the.
So quick it is the.
It's a financial criminal,fincine.
Speaker 1 (06:21):
Fincine yeah the financial.
Speaker 3 (06:25):
Yeah, so anyway, sorry I forgot about that.
Speaker 1 (06:32):
I forgot, but it's a lot of that's okay, Well, it is
the, it is the government, sothey, they love the acronym
stuff.
So so just to just to clarifyJanuary 1st, all small private
entities which is going to bringa broad brush all small private
entities are going to berequired to register with sin
thin, which is a federalorganization, with who, the, the
(06:57):
, the primary beneficiary is forthat business.
Speaker 3 (07:01):
Correct and basically the rule of the areas, the
controlling owner with 25% ormore of an interest or financial
ownership in the company, andthey're going to have to reveal
their you know tax ID number,where they live, what their name
is and some other informationas well.
(07:22):
So, and the definition.
Speaker 1 (07:26):
I'm just my, my pause , Michael, is this.
My pause, michael, is this butyou're telling me, as a small
business owner, entrepreneur forthe first time, live on this
podcast is I'm going to have togo and report my home address,
my federal tax ID number, mycontrolling interest in my
(07:47):
parent organization for Butlervet insurance.
That's your and I've got to goregister that with the federal
government.
Speaker 3 (07:54):
Well, you may not because you might be under one
of the exceptions.
Speaker 1 (07:59):
Gotcha.
Speaker 3 (08:00):
Insurance agencies may be exception.
Speaker 1 (08:04):
Oh, how about that?
Speaker 3 (08:11):
But veterinarians most likely to be captured in
this, oh absolutely, and they'regoing to be captured in this,
but you your license in otherways, you mean you may not have
to report.
You have to look at thoseexceptions and see if they apply
to you.
Speaker 1 (08:28):
Gotcha.
Speaker 3 (08:29):
But anyway, one of the big exceptions is whether or
not you're a small company.
A small company is defined as acompany with less than 20
employees and with revenue lessthan $5 million a year, and I
think probably 90% of the vetpractices out there, so I think
(08:54):
that's a good category.
Speaker 1 (09:08):
So I mean, if we use the 80 20 rule, I mean I look at
my own practice and probablyyours, right?
Speaker 3 (09:12):
I mean 80% of the practices we work with are under
$5 million of revenue and mostlikely under 20 employees.
I mean that's that's the vastmajority, so they're going to
get rolled into that and they'regoing to get the $5 million of
revenue and that's going to bethe first of 20, 25 to file with
good and soon Gotcha.
Speaker 1 (09:26):
But if you're but if you're a practice forming a new
corporation and you helpveterinarians, you know new
corporate filings they're goingto have to file when they do
their corporate filing.
They're going to have to filewith sinfin as part of their
corporate organization Ifthey're going to start a
practice or or use that entityto purchase a practice on an
acquisition.
Speaker 3 (09:47):
If they form the company and and one of the kind
of base rules here is if you arefiling with a secretary of
state, that's that makes you thekind of entity that they want
the reporting from.
And if you file after January 1of 2024, you'll have to file
(10:09):
with FinCin within 90 days 90days.
Speaker 1 (10:20):
So February 2, I decide I'm going to start a
corporation as a veterinarian todo an acquisition within 90
days of February 2.
I have to not only get mycorporate stuff.
I filed my corporate stuffFebruary 2.
Those are the articles ofincorporation date.
I've got 90 days to file withsinfin to get my or FinCin to
(10:41):
get my compliance Compliance Aircourt for those listening, not
watching.
Speaker 3 (10:49):
Yeah, and there's some stiff penalties if you're
not in compliance.
Speaker 1 (10:52):
What's the federal government?
Michael, I would expect stiffpenalties, if nothing less.
Speaker 3 (10:58):
Plus criminal penalties if you're doing it
intentionally.
Speaker 1 (11:01):
So I mean, I'm looking at, I mean you sent over
a.
What are we talking about here?
This is a 35 page document orsomething From September 23,
which is probably the documentyou're reviewing.
Is at the exact same time andit's it's.
You know, it's a.
Well, I think that goes back toyour original comment about
(11:22):
making sure that you'renetworking with appropriate
people inside of your sphere andthat way they can look out for
your best interest, right?
Speaker 3 (11:30):
Right.
Well, that's right.
If anyone's listening to this,I'm sure Bill can provide my
email address and I could, andif you want to contact me at my,
carol legal will help you filethe file with or answer any
questions you might have.
Speaker 1 (11:44):
So I mean yeah who's?
A beneficial owner of mycompany.
Yeah Well, let's talk about theimportance of working with a
legal professional who hasexperience in the in the veteran
industry.
So what are you know, beyondthe kind of vanilla legal
(12:06):
contracts, articles ofincorporation, purchase of
practice what are some thingsthat you think veterinarians
it's critical for them to kindof have a handle on from a legal
perspective where they may begetting into trouble just as a
business owner in their sphereand their industry.
Speaker 3 (12:25):
Well, there's a few things.
I mean, if they're hiring otherveterinarians, other DVMs, and
they're going to have employmentagreements, so they may make
sure that their employmentagreements are in line with
what's required in Minnesota.
Another area is the focusexcuse me, my phone.
(12:53):
The other is a board ofveterinary medical licensing,
and so you have to make surethat you're also in compliance
with their requirements as well.
Sometimes people get a followof those and also real estate.
(13:13):
I run into a lot of stuff withreal estate where people get
into leases or situations withobligations that they didn't
realize they had.
Prior to sending a documentover to a legal professional,
have them review it first.
Or if you own real estate,whether or not you have, you're
(13:37):
in compliance with AmericanDisabilities Act or other zoning
.
Speaker 1 (13:41):
I actually just had a claim get filed against one of
my clients for ADA because theirramp wasn't the proper degrees
on their ADCAP accessible ramp.
Speaker 3 (13:54):
I run into that stuff all the time.
I was talking to a vet todaybecause he had a patient or a
client dispute a charge andbasically take some prescribed
medicine for their animal andleave without paying.
(14:14):
So a long conversation withthat particular vet on how to
handle that situation.
Speaker 1 (14:22):
I want to jump back to the lease agreement thing.
Yeah, so there's no end totrouble that I think business
owners and veterinarians can getinto.
I want to jump back to thelease comment for just a second.
Just be there.
Statement, because I am not anattorney.
I'll preface my statement rightnow.
I'm not admitted by any bar inany state or the American Bar
(14:46):
Association, like you are,Michael.
But so often I see my clientsand veterinarians say hey, I'm
moving into this space or I'mpurchasing a practice and
they've already signed the leaseagreement and they send it over
to me because I've got tocomply with the insurance.
I don't give them any legaladvice on the lease itself, but
(15:08):
I've got to interpret theinsurance requirements.
I think.
Did anybody look at this beforeyou signed this agreement?
Because you're required tocarry a $5 million umbrella now
I think you could probably speakto this better than I can.
Is that everyone's alwaystrying to pass the buck and in
lease agreements the landlord'strying to pass a contractually
(15:30):
to the leasee.
You really want to havesomebody review those documents
before you sign them, becausenow you're contractually
obligated to comply with them.
Speaker 3 (15:43):
Well, right, I think sometimes clients when I'm
talking to them after they'vesigned a lease agreement with
all of any advice, they'lldiscover that a lot of the risk
within that agreement is ontheir side of the leisure and
there was no negotiation.
They're responsible for thingsthat maybe they shouldn't be
(16:06):
responsible for.
They're maybe an old HVACsystem and now they're
responsible for the cost ofreporting.
Speaker 1 (16:13):
I had a claim on that Large strip mall in the South
Metro suburb of the Twin Cities.
I mean large strip mall, 40tenant unit and somebody went up
on the roof and stole all thecoils out of the air
conditioners.
The tenant was responsible forreplacing the AC unit.
She's like I'm a tenant in thisbuilding and I've got to
(16:34):
replace a $15,000 HVAC unit.
Are you kidding me?
I said the insurance company isnot going to cover it because
you don't own the property, butyou're responsible for it
because you signed the leaseagreement.
She's like what can I do to getout of this?
I said I'm not an attorney,better call one.
But the insurance company isnot going to cover this because
you don't own the building.
Speaker 3 (16:53):
And lease agreements are written in a way that it's
all.
It's very difficult to get outof it, extremely difficult.
Another one that comes up inlease agreements is that tenants
can get on the hook for capitalimprovements so, like the
landlord, can come in and makeall sorts of capital
improvements and spend hundredsof thousands of dollars, and
(17:17):
then that cost gets added totheir can cost or their
operating costs that they withthe other tenants I had another
that I had a bet that we have afight with the landlord on that
point as well.
So you know and there's littlethings that you do in that sort
of situation you have tonegotiate it.
(17:37):
Maybe the landlord isn't goingto read the bad.
But then what you do is you say, okay, we're okay with paying
for it, but it has to beamateurized over the life of the
improvement so that you canspread that cost off over 10 or
20 year period.
Speaker 1 (17:57):
So you know, I guess it's buyer beware and these
things are negotiable, right?
I mean, it's a contractualagreement, it's not written in
stone.
I think, for the veterinariansout there listening, if you get
handed a lease agreement, you donot have to immediately sign it
.
I mean, I did an acquisitionwhere I purchased another
(18:17):
insurance agency and I cannottell you the investment that I
made in working with a qualified, competent attorney who has
experience in the arena.
It was worth every penny that Iinvested and it wasn't an
expense.
I didn't call it an expense, itwas an investment because it
saved me a lot of headache andtime to make sure everything was
(18:39):
proper and done along the way.
And I think you know I thinkyou know for my industry and
probably yours they look at usand say, oh God, I'm wasting the
money on insurance or I'mwasting the money on attorney.
They're just out to make a buckoff me.
But long term you can get intoa lot of trouble, either signing
an agreement or not havingenough insurance for you know,
speaking about our twoindustries, what's all that?
Speaker 3 (19:02):
comes to that.
There's two different types ofleases.
You have residential andcommercial.
Residential leases have a lotof protection under statute, so
you have already.
But on a commercial lease youdon't.
The court look at you and thelegislature looks at you as your
sophisticated business person.
(19:24):
It's up to you to negotiateyour own.
Speaker 1 (19:30):
Yeah, and I think that again it goes back to the
original comment about buildinga trusted advisory board, so to
speak, of attorney, cpas youknow, insurance HR, whatever
that looks like to make surethat you're, because there, as
you mentioned, there is a lot ofconsumer protection.
(19:50):
Same thing on the insuranceside.
Right, so there's a lot ofprotection for personal
insurance from the Department ofCommerce, but it's buyer beware
on the commercial line side,all of those consumer
protections are not there,because you're now that you
formed a corporation and a legalentity that you've got to now
report with the federalgovernment through FinCEN.
Apparently You're asophisticated business owner,
(20:15):
you know everything, so figureit out and we're going to come
after you.
Speaker 3 (20:22):
You're making a great point about the network too.
So you know I tend to work inparticular areas, but what I can
be is I can be a point person.
For that as well, they can callme up, and if I can't do it, I
know who can.
So you know I'm a resource.
I know the.
I know the other players outthere that can help you, like
(20:44):
bill here on insurance.
Speaker 1 (20:46):
Yeah, and you know.
Speaking about contracts, for asecond, I know that there was
one thing that I wanted to touchon because it was a very hot
topic in my industry and I knowthere's.
There's some communicationgoing out there inside the
veterinary world aboutnon-competes and enforceability
(21:08):
of non-competes and there wassome federal legislation that
was being floated and then theydid pass legislation in
Minnesota about non-competes.
What's your kind of thoughtprocess or attitude towards
non-competes?
And I know there's some othercomponents to an employment
agreement.
First, I'm going to ask youthis question Should every
employee at your practice havean employment agreement signed?
Speaker 3 (21:34):
No, I think you have two tiers of employment legal
documents.
If you have DVMs working foryou, you should have an
employment agreement with them,professional employment
agreement, all other your techsand your business people or
anybody else that you'reemploying you can have a
(22:00):
well-drafted employee handbookthat can serve to provide all of
the policy information that youneed with regard to those
individuals.
And so I generally you know,sometimes there's a case where a
(22:21):
lesser employee, somebody notlicensed, might need an
employment agreement, but itcomes up very rarely.
Speaker 1 (22:29):
Gotcha.
And so within those,specifically with the DVMs, I
think there's some a lot ofconversation out there right now
.
There's a lot of corporatepractices who are hiring DVMs
and I think there's somecontention about their
non-compete clauses that arebeing put in there.
(22:49):
Number one in Minnesotaspecifically, what's the
legality of non-competes?
And then just generally overall, how enforceable are they as an
instrument and employmentagreement?
Speaker 3 (23:03):
Okay, so the law changed on January 1st.
So as of July 1st any newemployment agreement or
independent contractor agreementcannot have non-compete in them
that exist after termination ofemployment.
So you can have non-competeprovisions in an employment
(23:28):
agreement during employment butyou can't have the for two years
after termination.
You cannot compete with.
Speaker 1 (23:37):
Practice medicine within five miles.
Yeah.
Speaker 3 (23:41):
Those are void now and unenforceable.
Speaker 1 (23:45):
In the state of Minnesota.
Speaker 3 (23:47):
In the state of Minnesota.
Any new ones the existing onesthat exist prior to July 1st are
still enforceable.
So there's a current agreementout there and my advice to young
DVMs that have employmentagreement is, before you renew
your employment agreement youshould get a brand new one so
(24:09):
that it can be non-compete, canbe removed from it.
Speaker 1 (24:13):
Gotcha.
And then, as far I mean, in myindustry there's a lot of
conversation aboutenforceability of non-competes
where they don't actually reallyhold up in court that well, if
I wanted to try and you knowI've got someone working for me
and they, you know they leavethe agency and they go work
somewhere else For me to try andgo actually enforce that
(24:33):
non-compete is a very harduphill battle.
But there's a couple othercomponents to an employment
agreement that's probably morecritical to have in there, which
is non-piracy, non-solicitation, especially in my realm.
But do you want to talk aboutthose two components of an
employment agreement in relationto non-compete?
Speaker 3 (24:52):
I think in the insurance world, I think it will
be different in theprofessional practice world.
The non-competes, they didserve a value, I think, to a lot
of doctors, but now thatthey're not enforceable it's
moved to non-solicitation,non-disclosure of confidential
information and protection ofproprietary or trade secret
(25:15):
information.
And so those provisions at nowwhen I'm drafting those
agreements, I'm reallybolstering up those provisions
so that they're very strong andexpressed in a very explicit
terms so the employeeunderstands that they can't
(25:36):
steal clients' lists, they can'tprovide, you know work products
, workflows, checklists, all ofthat yeah.
Yeah, they can't use any of thatinformation.
They can't use any of that.
So, and the other point herethat people should understand is
(25:57):
in the transition in a sale ofa practice, this is one of the
exceptions under the newMinnesota law.
If I'm selling my veterinarypractice and the buyer wants me
to be under a non-compete,that's enforceable.
Speaker 1 (26:17):
So, yeah, the non-compete to a correct yeah,
that was my understanding aswell, michael is that the
buyer's seller transaction fornon-competition is very
enforceable, but the employeremployee non-competition that
went away.
So, just for the sake oftransparency, but for the lay
(26:39):
person out there, I work for you.
I sign an employment agreementafter July 1st.
It doesn't contain anon-compete, but it's got the
non-piracy, non-disclosure,non-solicitation components.
I can open a practice next doorto you, but I can't take the
client list.
I can't take all the checklistsand workflows.
I can't call any of the clientsthat I used to see or patients
(27:03):
that I used to see.
Now, if they come, if theychoose to come to my practice
because they know that I'mpracticing next door, the client
can freely choose to do that.
But I cannot solicit them tocome to my new practice.
Speaker 3 (27:19):
Correct and it gets a little bit gray here, all right
, because sometimes, in a lot oftimes, employment agreements
you'll have attorney's feesprovisions as well in these
remedies.
So as an employer I can goafter you as a former employee
(27:41):
and if I think you are violatingthe agreement and I can prove
it, you have to pay myattorney's fees as well as your
own to defend it.
So that's kind of you know,something else to keep in mind.
If you're correct, you cannot,you can't solicit.
But the challenge there and theadvice I give to my clients is,
(28:03):
if you're going to do that, ifyou're going to open up a cross
the street or next door orwhatever you're going to do and
you have clients that you knoware coming from that other
practice, you better have gooddocumentation of how that
communication started or else.
Speaker 1 (28:22):
Or else that employer can come in, you open yourself
up to lawsuit right.
You absolutely do so and it'syou know, the agreement that,
yeah, definitely documented theagreement that I had with the
prior owner of the practice, theinsurance agency that I
acquired.
It's lost revenue.
(28:43):
It's I get to charge areasonable rate of the revenue
that I anticipated that I lost,on top of the attorney's fees.
So it's not even just theattorney's fees, it's also the
lost revenue that I can justifyhaving lost to your solicitation
of the clients.
You know, I think you know, asbusiness owners, we don't, we
(29:05):
don't like to think about that,but it's, it's protection.
You know you have to take offyour practitioner hat and put on
your business owner hat and youreally need to protect the
practice.
Do you think anyone is evergoing to go out and steal all
your clients?
No, you never.
Ah, you never know what couldhappen.
And and that that again goesback to working with a
knowledgeable legal professionalwho can help you draft
(29:27):
documents that are going toprotect your business.
One last item that I'd like totouch on, just because it also
is, is new law in Minnesota,specifically in in.
I think you know these types oflaws.
If you're not, if you'reveterinary, not Minnesota, these
types of laws are gettingrolled out across the country.
I think more and more statesare are looking to put these in,
(29:47):
but it's Minnesota's safe andsick time law and how that can
impact small businesses.
And again, that you know thedefinition of small businesses,
ah, the the legislativedefinition of small business,
which I think is a revenuenumber and an employee number.
But why don't you touch on someof the changes that are coming
for, ah, small businesses, ah,just in general in Minnesota,
(30:10):
and how that might affectveterinarians?
Speaker 3 (30:14):
Well, um, I think the one that's coming up right now
is and that starts at thebeginning of this next year is
the safe and ah, sick and safetime law, and and, and if you
have one employee, you'resubject to it.
So, basically, so that's howsmall.
Speaker 1 (30:33):
You are One employee.
You're subject to the Minnesotasafe and sick law effective
January 1st.
Right Michael.
Speaker 3 (30:39):
That's correct.
That's correct.
Okay, so that's one of thechanges that.
Ah, employees, our, our legally, our employers are legally
required to allow employees toaccrue one hour for every 30
hours, worked Up to a maximum of48 hours a year.
Speaker 1 (31:04):
So you have to allow up to 48 hours of safe and sick
time for one hour for every 30hours worked.
Speaker 3 (31:16):
If somebody works 2,000 hours a year, you divide
that by 30 hours, that comesafter about 66 hours of paid or
safe, sick or safe time.
But I could cap it at 48?
.
Yeah, exactly.
But the other really importantpart of this is what you're
(31:42):
going to use it for.
And what they can use this foris for their own care of a
family member with a mental orphysical illness, or for medical
diagnosis or preventive medicalor healthcare for domestic
abuse, sexual assault, seekingmedical attention or services or
(32:07):
psychological help orrelocation, or seeking legal
advice.
And it's not just for you, butit can be for a family member,
and they really the definitionof family.
Speaker 1 (32:23):
That's a very broad definition of family member.
I mean it's like it's trial.
Speaker 3 (32:28):
Foster child, adult child, legal ward child of whom
the employee is a legal guardian.
A child whom the employeestands or stood in as a parent,
a spouse or registered partner,sibling, step sibling, foster
sibling.
Biological adoptive a fosterparent, step parent, grandchild,
(32:49):
foster grandchild, grandparent,grandparent.
Child of a sibling.
A sibling of parents.
Speaker 1 (32:59):
So a niece or nephew?
I could take time off for aniece or nephew's illness.
Speaker 3 (33:04):
You have a niece or nephew, and then the other part
is you can name up the onedesignated individual that
you're not even related to.
Speaker 1 (33:13):
So I could name you.
If you were sick, I could sayI'm going to go buy Michael some
chicken soup.
I need the day off.
You got to give it to me.
Speaker 3 (33:21):
Exactly, if I'm your guy, you're protected under the
law you might be my guy, michael, I might make you my guy.
Speaker 1 (33:30):
I might make you my guy for the safe and sick.
Now I think this affects everybusiness in a different way,
right?
I mean, you know, in ourindustry we're a little bit more
flexible, right?
So you know, I have a teammember out right now.
She's pretty ill and she's ahybrid works hybrid, so she
spends part of the time in theoffice and part of the time at
(33:51):
home and this January I decidedI'm just going to go to
unlimited PTO.
I know that that's kind of theother end of the business
spectrum and I said I'm notgoing to get into trying to
track hours and track time andif you need to time off, just
take time.
But I know that there's a lotof businesses out there that
can't afford that sort ofleniency or scheduling and that
(34:12):
sort of thing.
So how does a business whoisn't tracking specifically one
hour for every 30 hours, howdoes that play in?
Speaker 3 (34:21):
Well, you need to show it on their paycheck and
you still need to show it ontheir paycheck, regardless of
how your PTO is set up.
Speaker 1 (34:29):
Okay.
So I need to show that they'reaccruing this time that they can
use for safe and sick timeRight.
So that means you need to workwith a really good CPA and or
payroll provider.
That's got your back even ifyou haven't lived.
So again, back to our networkof professional providers is to
make sure that they're in tunewith what's happening in your
state or because I think moreand more we put it in.
(34:55):
I put that in place for my teamjust because I did not want them
.
I had a team member last yearwhose husband needed an
e-surgery and we were kind oflooking at PTO hours and she was
kind of getting to the end ofher PTO and I was like I really
don't want my team worryingabout whether or not to have the
availability to take time offto care for a spouse and whether
(35:16):
or not they're going to beshort five hours or 10 hours in
a pay period or something likethat.
And again, I know every businessand every practices in a
different spot.
But now working, you know I'vegot a couple notes here that I
got to reach out to my attorneymaybe Michael's my guy to make
(35:39):
sure I'm compliant with SINFINon the Corporate Transparency
Act, but then also, you know,communicate with my CPA and
payroll provider.
Hey, am I making sure, eventhough I offer unlimited PTO,
that I'm tracking this Minnesotasafe and sick time?
And I think that you know theintention is we don't want
(36:02):
employees thinking or worryingabout having to take time off
for all the reasons that youhighlight right, which I think
we'll both agree are both validreasons to be off of work for a
certain period of time and nothave to worry about losing wages
for doing that.
But from a business owner'sside, it's making sure that
(36:22):
you're tracking that so you donot run a foul of the law and
that those things are in placeat your business or practice.
Speaker 3 (36:33):
And along with that you have to provide the
employee's notice of theirrights under the law by posting
or else you're in trouble againand the penalty is because it's
the government, is our stuff, asyou would say.
Well, the employees know aboutit and it has to be in their
primary language and it also, ifyou have an employee handbook,
(36:56):
you need to update the handbookso it exists in there as well.
So you know there's a lot oflittle things about this.
I could probably talk for anhour and a half on this alone.
But, that's the point from that.
Speaker 1 (37:11):
Well, I really appreciate the time today and I
think the key takeaway from allof this whether you're domiciled
in Minnesota as a veterinarypractice or another state is to
make sure that you're networkingand connecting with
professionals, and Michael and Iknow each other through the
Minnesota Veterinary MedicalAssociation and your state
association is a great spot tonetwork with professionals who
(37:35):
understand your industry.
Just as a plug, whether you arein Minnesota or Texas, where
Michael works, you can alwaysreach out to him and we'll get
that info in a second or just,you know, reach out to your
state association and look forthose professionals because you
want to make sure, as theselegislative actions take place,
that you're up to date with,making sure that you're
(37:57):
compliant and not going to run afoul.
That I really enjoyed our timetoday.
Michael, for our listeners outthere who are in Minnesota or
Texas, I know you're in the barin Wisconsin as well.
How do veterinarians find youout there in the world?
Speaker 3 (38:14):
Well, I'm an industry partner with the Minnesota
Veterinary Medical Association,so you can go to that website
and my information is there.
Otherwise, you can shoot me anemail and my email address is
Amazon MichaelS-S-M-A-L-C-H-E-R-T at Larkin,
(38:38):
l-a-r-k-i-n HoffmanH-O-F-F-M-A-N dot com.
Speaker 1 (38:46):
And I think you're on LinkedIn as well, so we'll make
sure to have that contact infoout there as well for LinkedIn
if they want to connect with youthat way.
So well, I've really enjoyedour time together.
Michael, Thanks for being aguest on the podcast.
Speaker 3 (39:01):
Thanks, bill, I appreciate being on, it was
great.
Speaker 1 (39:05):
And, as always for our listeners out there, make
sure to like, share and reviewthe podcast.
It helps with the algorithmsout there and the internet so
that other veterinarians andpractice managers, veterinary
professionals, can get thepodcast.
So tune into the next episodeof the Veterinary Blueprints
podcast, where we bring businessand entrepreneurship principles
to the veterinary community.
(39:26):
Thanks for listening.
Thanks for tuning in toVeterinary Blueprints.
If you have any thoughts,questions or suggestions for an
episode, I would love to hearfrom you.
Email me at bill atbutlervetinsurancecom.
Don't forget to subscribe soyou never miss an episode, and
if you could do me a huge favor.
You know it helps with thealgorithm.
(39:47):
If you can like, share orcomment on the post, leave a
review.
I would love it.
Thanks for tuning in and untilnext time.
I cannot tell you the investment that I made in
working with a qualified,competent attorney who has
experience in the arena.
It was worth every penny that Iinvested and it wasn't an
expense.
I didn't call it an expense, itwas an investment because it
saved me a lot of headache andtime to make sure everything was
(00:20):
proper and done along the way.
Speaker 2 (00:30):
Welcome to the Veterinary Blueprint Podcast
brought to you by Butler VetInsurance.
Hosted by Bill Butler, theVeterinary Blueprint Podcast is
for veterinarians and practicemanagers who are looking to
learn about working on theirpractice instead of in their
practice.
Each episode we will bring yousuccessful, proven blueprints
from others, both inside andoutside the veterinary industry.
(00:50):
Welcome to today's episode.
Speaker 1 (00:54):
Welcome to this episode of the Veterinary
Blueprint Podcast.
I am your host, bill Butler,and today we're joined by
Michael Seltzer, an attorney andshareholder with Larkin Hoffman
in Minnesota.
Michael is based in Minnesota,texas, and has extensive
experience helping veterinarianswith buying and selling
practices, forming professionalcorporations and partnerships,
advising veterinarians oncontracts for employment,
(01:15):
partnerships, real estate andother business related matters.
So Michael has extensiveexperience in all of those areas
.
We both are members of theMinnesota Veterinary Medical
Association, which is howMichael and I got connected and
I'm just grateful to have himjoin and share his insights with
some recent changes for smallbusinesses and we're going to
(01:36):
speak about how that affectsMinnesota business owners and
veterinarians, but then alsosome larger scale items.
So welcome, michael.
Speaker 3 (01:42):
Thanks a lot, bill.
I appreciate you having me onyour podcast.
A little background for me is Iin my previous career.
I was working at a dental fieldfor a manufacturer for many
years and then I went back tolaw school and I became an
(02:03):
attorney and I saw anopportunity where the dentists
or the practitioners would beretiring because they're part of
the baby room generation, andso I started helping them with
their transitions, and it alsomoved over to veterinary
practices, which I really enjoyWorking with veterinarians to
(02:24):
help them sell their businessesand also new veterinarians to
help them buy.
And it's been great creating anetwork of other advisors like
Bill to work with so we could bea team and help the
veterinarians be as successfulas they possibly can.
Speaker 1 (02:42):
I think that's really critical for entrepreneurs in
general is just building a goodteam or network of advisors,
whether that's attorneys, cpas,insurance or other.
I think that often gets lostand you don't realize what you
need until you go oh, I don'tknow how to put an employment
agreement together, or I don'tknow how to do insure something,
(03:04):
or I'm going to buy a building.
What are the implications ofthat?
It's not just working with thereal estate agent, it's also
some contractual stuff.
So I'm glad to have you on thepodcast today, especially to
talk about some timely issuesthat are recent legislative
issues and are changing thelandscape of owning a small
(03:28):
business, specifically aveterinary practice.
So I'm glad you could join ustoday.
You and I were chatting beforescheduling the podcast and one
thing that you mentioned to methat kind of was like oh, tell
me more.
Was the Corporate TransparencyAct and how that's going to
affect small businesses.
And in the world ofentrepreneurship, legislation
(03:53):
gets passed and all of a suddenboom, you've got to make changes
as a business owner andsometimes you're not up on stuff
.
So why don't you walk usthrough what the Corporate
Transparency Act is and howthat's going to affect small
businesses and what they can doto make sure they're up to speed
on that.
Speaker 3 (04:13):
Yeah, so in the last couple of years there's been a
movement toward at the federallevel to create an act or
legislation to help identifyowners of shell companies in
order to fight terrorism.
(04:34):
Right now, the United States,prior to this act, was one of
the few economies that allowedan anonymous ownership to exist
on public records, and so it wasreally difficult for the FBI or
other investigative agencies tofind people who own these LLCs.
(04:59):
That could be shell companies,laundering money, terrorist
organizations or whatnot, andmost of these existed at the
lower level of businesses, thesesmall business entities, and
the larger ones, the publiccompanies.
That information is easy tofollow or, if they're licensed
(05:19):
for some reason or whatever, orwhatever they're doing, then
they have that informationalready.
So they passed that act andthat act is going to go into
effect on January 1st and youhave one year from January 1st
to report who the beneficialowners are of each company,
(05:43):
unless there's an exception thatdoesn't require you to report,
but most small businesses willhave to report.
And then, after January 1st, ifa new business is created,
you'll have 90 days to make thereport, and you make the report
(06:03):
to the.
So quick it is the.
It's a financial criminal,fincine.
Speaker 1 (06:21):
Fincine yeah the financial.
Speaker 3 (06:25):
Yeah, so anyway, sorry I forgot about that.
Speaker 1 (06:32):
I forgot, but it's a lot of that's okay, Well, it is
the, it is the government, sothey, they love the acronym
stuff.
So so just to just to clarifyJanuary 1st, all small private
entities which is going to bringa broad brush all small private
entities are going to berequired to register with sin
thin, which is a federalorganization, with who, the, the
(06:57):
, the primary beneficiary is forthat business.
Speaker 3 (07:01):
Correct and basically the rule of the areas, the
controlling owner with 25% ormore of an interest or financial
ownership in the company, andthey're going to have to reveal
their you know tax ID number,where they live, what their name
is and some other informationas well.
(07:22):
So, and the definition.
Speaker 1 (07:26):
I'm just my, my pause , Michael, is this.
My pause, michael, is this butyou're telling me, as a small
business owner, entrepreneur forthe first time, live on this
podcast is I'm going to have togo and report my home address,
my federal tax ID number, mycontrolling interest in my
(07:47):
parent organization for Butlervet insurance.
That's your and I've got to goregister that with the federal
government.
Speaker 3 (07:54):
Well, you may not because you might be under one
of the exceptions.
Speaker 1 (07:59):
Gotcha.
Speaker 3 (08:00):
Insurance agencies may be exception.
Speaker 1 (08:04):
Oh, how about that?
Speaker 3 (08:11):
But veterinarians most likely to be captured in
this, oh absolutely, and they'regoing to be captured in this,
but you your license in otherways, you mean you may not have
to report.
You have to look at thoseexceptions and see if they apply
to you.
Speaker 1 (08:28):
Gotcha.
Speaker 3 (08:29):
But anyway, one of the big exceptions is whether or
not you're a small company.
A small company is defined as acompany with less than 20
employees and with revenue lessthan $5 million a year, and I
think probably 90% of the vetpractices out there, so I think
(08:54):
that's a good category.
Speaker 1 (09:08):
So I mean, if we use the 80 20 rule, I mean I look at
my own practice and probablyyours, right?
Speaker 3 (09:12):
I mean 80% of the practices we work with are under
$5 million of revenue and mostlikely under 20 employees.
I mean that's that's the vastmajority, so they're going to
get rolled into that and they'regoing to get the $5 million of
revenue and that's going to bethe first of 20, 25 to file with
good and soon Gotcha.
Speaker 1 (09:26):
But if you're but if you're a practice forming a new
corporation and you helpveterinarians, you know new
corporate filings they're goingto have to file when they do
their corporate filing.
They're going to have to filewith sinfin as part of their
corporate organization Ifthey're going to start a
practice or or use that entityto purchase a practice on an
acquisition.
Speaker 3 (09:47):
If they form the company and and one of the kind
of base rules here is if you arefiling with a secretary of
state, that's that makes you thekind of entity that they want
the reporting from.
And if you file after January 1of 2024, you'll have to file
(10:09):
with FinCin within 90 days 90days.
Speaker 1 (10:20):
So February 2, I decide I'm going to start a
corporation as a veterinarian todo an acquisition within 90
days of February 2.
I have to not only get mycorporate stuff.
I filed my corporate stuffFebruary 2.
Those are the articles ofincorporation date.
I've got 90 days to file withsinfin to get my or FinCin to
(10:41):
get my compliance Compliance Aircourt for those listening, not
watching.
Speaker 3 (10:49):
Yeah, and there's some stiff penalties if you're
not in compliance.
Speaker 1 (10:52):
What's the federal government?
Michael, I would expect stiffpenalties, if nothing less.
Speaker 3 (10:58):
Plus criminal penalties if you're doing it
intentionally.
Speaker 1 (11:01):
So I mean, I'm looking at, I mean you sent over
a.
What are we talking about here?
This is a 35 page document orsomething From September 23,
which is probably the documentyou're reviewing.
Is at the exact same time andit's it's.
You know, it's a.
Well, I think that goes back toyour original comment about
(11:22):
making sure that you'renetworking with appropriate
people inside of your sphere andthat way they can look out for
your best interest, right?
Speaker 3 (11:30):
Right.
Well, that's right.
If anyone's listening to this,I'm sure Bill can provide my
email address and I could, andif you want to contact me at my,
carol legal will help you filethe file with or answer any
questions you might have.
Speaker 1 (11:44):
So I mean yeah who's?
A beneficial owner of mycompany.
Yeah Well, let's talk about theimportance of working with a
legal professional who hasexperience in the in the veteran
industry.
So what are you know, beyondthe kind of vanilla legal
(12:06):
contracts, articles ofincorporation, purchase of
practice what are some thingsthat you think veterinarians
it's critical for them to kindof have a handle on from a legal
perspective where they may begetting into trouble just as a
business owner in their sphereand their industry.
Speaker 3 (12:25):
Well, there's a few things.
I mean, if they're hiring otherveterinarians, other DVMs, and
they're going to have employmentagreements, so they may make
sure that their employmentagreements are in line with
what's required in Minnesota.
Another area is the focusexcuse me, my phone.
(12:53):
The other is a board ofveterinary medical licensing,
and so you have to make surethat you're also in compliance
with their requirements as well.
Sometimes people get a followof those and also real estate.
(13:13):
I run into a lot of stuff withreal estate where people get
into leases or situations withobligations that they didn't
realize they had.
Prior to sending a documentover to a legal professional,
have them review it first.
Or if you own real estate,whether or not you have, you're
(13:37):
in compliance with AmericanDisabilities Act or other zoning
.
Speaker 1 (13:41):
I actually just had a claim get filed against one of
my clients for ADA because theirramp wasn't the proper degrees
on their ADCAP accessible ramp.
Speaker 3 (13:54):
I run into that stuff all the time.
I was talking to a vet todaybecause he had a patient or a
client dispute a charge andbasically take some prescribed
medicine for their animal andleave without paying.
(14:14):
So a long conversation withthat particular vet on how to
handle that situation.
Speaker 1 (14:22):
I want to jump back to the lease agreement thing.
Yeah, so there's no end totrouble that I think business
owners and veterinarians can getinto.
I want to jump back to thelease comment for just a second.
Just be there.
Statement, because I am not anattorney.
I'll preface my statement rightnow.
I'm not admitted by any bar inany state or the American Bar
(14:46):
Association, like you are,Michael.
But so often I see my clientsand veterinarians say hey, I'm
moving into this space or I'mpurchasing a practice and
they've already signed the leaseagreement and they send it over
to me because I've got tocomply with the insurance.
I don't give them any legaladvice on the lease itself, but
(15:08):
I've got to interpret theinsurance requirements.
I think.
Did anybody look at this beforeyou signed this agreement?
Because you're required tocarry a $5 million umbrella now
I think you could probably speakto this better than I can.
Is that everyone's alwaystrying to pass the buck and in
lease agreements the landlord'strying to pass a contractually
(15:30):
to the leasee.
You really want to havesomebody review those documents
before you sign them, becausenow you're contractually
obligated to comply with them.
Speaker 3 (15:43):
Well, right, I think sometimes clients when I'm
talking to them after they'vesigned a lease agreement with
all of any advice, they'lldiscover that a lot of the risk
within that agreement is ontheir side of the leisure and
there was no negotiation.
They're responsible for thingsthat maybe they shouldn't be
(16:06):
responsible for.
They're maybe an old HVACsystem and now they're
responsible for the cost ofreporting.
Speaker 1 (16:13):
I had a claim on that Large strip mall in the South
Metro suburb of the Twin Cities.
I mean large strip mall, 40tenant unit and somebody went up
on the roof and stole all thecoils out of the air
conditioners.
The tenant was responsible forreplacing the AC unit.
She's like I'm a tenant in thisbuilding and I've got to
(16:34):
replace a $15,000 HVAC unit.
Are you kidding me?
I said the insurance company isnot going to cover it because
you don't own the property, butyou're responsible for it
because you signed the leaseagreement.
She's like what can I do to getout of this?
I said I'm not an attorney,better call one.
But the insurance company isnot going to cover this because
you don't own the building.
Speaker 3 (16:53):
And lease agreements are written in a way that it's
all.
It's very difficult to get outof it, extremely difficult.
Another one that comes up inlease agreements is that tenants
can get on the hook for capitalimprovements so, like the
landlord, can come in and makeall sorts of capital
improvements and spend hundredsof thousands of dollars, and
(17:17):
then that cost gets added totheir can cost or their
operating costs that they withthe other tenants I had another
that I had a bet that we have afight with the landlord on that
point as well.
So you know and there's littlethings that you do in that sort
of situation you have tonegotiate it.
(17:37):
Maybe the landlord isn't goingto read the bad.
But then what you do is you say, okay, we're okay with paying
for it, but it has to beamateurized over the life of the
improvement so that you canspread that cost off over 10 or
20 year period.
Speaker 1 (17:57):
So you know, I guess it's buyer beware and these
things are negotiable, right?
I mean, it's a contractualagreement, it's not written in
stone.
I think, for the veterinariansout there listening, if you get
handed a lease agreement, you donot have to immediately sign it
.
I mean, I did an acquisitionwhere I purchased another
(18:17):
insurance agency and I cannottell you the investment that I
made in working with a qualified, competent attorney who has
experience in the arena.
It was worth every penny that Iinvested and it wasn't an
expense.
I didn't call it an expense, itwas an investment because it
saved me a lot of headache andtime to make sure everything was
(18:39):
proper and done along the way.
And I think you know I thinkyou know for my industry and
probably yours they look at usand say, oh God, I'm wasting the
money on insurance or I'mwasting the money on attorney.
They're just out to make a buckoff me.
But long term you can get intoa lot of trouble, either signing
an agreement or not havingenough insurance for you know,
speaking about our twoindustries, what's all that?
Speaker 3 (19:02):
comes to that.
There's two different types ofleases.
You have residential andcommercial.
Residential leases have a lotof protection under statute, so
you have already.
But on a commercial lease youdon't.
The court look at you and thelegislature looks at you as your
sophisticated business person.
(19:24):
It's up to you to negotiateyour own.
Speaker 1 (19:30):
Yeah, and I think that again it goes back to the
original comment about buildinga trusted advisory board, so to
speak, of attorney, cpas youknow, insurance HR, whatever
that looks like to make surethat you're, because there, as
you mentioned, there is a lot ofconsumer protection.
(19:50):
Same thing on the insuranceside.
Right, so there's a lot ofprotection for personal
insurance from the Department ofCommerce, but it's buyer beware
on the commercial line side,all of those consumer
protections are not there,because you're now that you
formed a corporation and a legalentity that you've got to now
report with the federalgovernment through FinCEN.
Apparently You're asophisticated business owner,
(20:15):
you know everything, so figureit out and we're going to come
after you.
Speaker 3 (20:22):
You're making a great point about the network too.
So you know I tend to work inparticular areas, but what I can
be is I can be a point person.
For that as well, they can callme up, and if I can't do it, I
know who can.
So you know I'm a resource.
I know the.
I know the other players outthere that can help you, like
(20:44):
bill here on insurance.
Speaker 1 (20:46):
Yeah, and you know.
Speaking about contracts, for asecond, I know that there was
one thing that I wanted to touchon because it was a very hot
topic in my industry and I knowthere's.
There's some communicationgoing out there inside the
veterinary world aboutnon-competes and enforceability
(21:08):
of non-competes and there wassome federal legislation that
was being floated and then theydid pass legislation in
Minnesota about non-competes.
What's your kind of thoughtprocess or attitude towards
non-competes?
And I know there's some othercomponents to an employment
agreement.
First, I'm going to ask youthis question Should every
employee at your practice havean employment agreement signed?
Speaker 3 (21:34):
No, I think you have two tiers of employment legal
documents.
If you have DVMs working foryou, you should have an
employment agreement with them,professional employment
agreement, all other your techsand your business people or
anybody else that you'reemploying you can have a
(22:00):
well-drafted employee handbookthat can serve to provide all of
the policy information that youneed with regard to those
individuals.
And so I generally you know,sometimes there's a case where a
(22:21):
lesser employee, somebody notlicensed, might need an
employment agreement, but itcomes up very rarely.
Speaker 1 (22:29):
Gotcha.
And so within those,specifically with the DVMs, I
think there's some a lot ofconversation out there right now
.
There's a lot of corporatepractices who are hiring DVMs
and I think there's somecontention about their
non-compete clauses that arebeing put in there.
(22:49):
Number one in Minnesotaspecifically, what's the
legality of non-competes?
And then just generally overall, how enforceable are they as an
instrument and employmentagreement?
Speaker 3 (23:03):
Okay, so the law changed on January 1st.
So as of July 1st any newemployment agreement or
independent contractor agreementcannot have non-compete in them
that exist after termination ofemployment.
So you can have non-competeprovisions in an employment
(23:28):
agreement during employment butyou can't have the for two years
after termination.
You cannot compete with.
Speaker 1 (23:37):
Practice medicine within five miles.
Yeah.
Speaker 3 (23:41):
Those are void now and unenforceable.
Speaker 1 (23:45):
In the state of Minnesota.
Speaker 3 (23:47):
In the state of Minnesota.
Any new ones the existing onesthat exist prior to July 1st are
still enforceable.
So there's a current agreementout there and my advice to young
DVMs that have employmentagreement is, before you renew
your employment agreement youshould get a brand new one so
(24:09):
that it can be non-compete, canbe removed from it.
Speaker 1 (24:13):
Gotcha.
And then, as far I mean, in myindustry there's a lot of
conversation aboutenforceability of non-competes
where they don't actually reallyhold up in court that well, if
I wanted to try and you knowI've got someone working for me
and they, you know they leavethe agency and they go work
somewhere else For me to try andgo actually enforce that
(24:33):
non-compete is a very harduphill battle.
But there's a couple othercomponents to an employment
agreement that's probably morecritical to have in there, which
is non-piracy, non-solicitation, especially in my realm.
But do you want to talk aboutthose two components of an
employment agreement in relationto non-compete?
Speaker 3 (24:52):
I think in the insurance world, I think it will
be different in theprofessional practice world.
The non-competes, they didserve a value, I think, to a lot
of doctors, but now thatthey're not enforceable it's
moved to non-solicitation,non-disclosure of confidential
information and protection ofproprietary or trade secret
(25:15):
information.
And so those provisions at nowwhen I'm drafting those
agreements, I'm reallybolstering up those provisions
so that they're very strong andexpressed in a very explicit
terms so the employeeunderstands that they can't
(25:36):
steal clients' lists, they can'tprovide, you know work products
, workflows, checklists, all ofthat yeah.
Yeah, they can't use any of thatinformation.
They can't use any of that.
So, and the other point herethat people should understand is
(25:57):
in the transition in a sale ofa practice, this is one of the
exceptions under the newMinnesota law.
If I'm selling my veterinarypractice and the buyer wants me
to be under a non-compete,that's enforceable.
Speaker 1 (26:17):
So, yeah, the non-compete to a correct yeah,
that was my understanding aswell, michael is that the
buyer's seller transaction fornon-competition is very
enforceable, but the employeremployee non-competition that
went away.
So, just for the sake oftransparency, but for the lay
(26:39):
person out there, I work for you.
I sign an employment agreementafter July 1st.
It doesn't contain anon-compete, but it's got the
non-piracy, non-disclosure,non-solicitation components.
I can open a practice next doorto you, but I can't take the
client list.
I can't take all the checklistsand workflows.
I can't call any of the clientsthat I used to see or patients
(27:03):
that I used to see.
Now, if they come, if theychoose to come to my practice
because they know that I'mpracticing next door, the client
can freely choose to do that.
But I cannot solicit them tocome to my new practice.
Speaker 3 (27:19):
Correct and it gets a little bit gray here, all right
, because sometimes, in a lot oftimes, employment agreements
you'll have attorney's feesprovisions as well in these
remedies.
So as an employer I can goafter you as a former employee
(27:41):
and if I think you are violatingthe agreement and I can prove
it, you have to pay myattorney's fees as well as your
own to defend it.
So that's kind of you know,something else to keep in mind.
If you're correct, you cannot,you can't solicit.
But the challenge there and theadvice I give to my clients is,
(28:03):
if you're going to do that, ifyou're going to open up a cross
the street or next door orwhatever you're going to do and
you have clients that you knoware coming from that other
practice, you better have gooddocumentation of how that
communication started or else.
Speaker 1 (28:22):
Or else that employer can come in, you open yourself
up to lawsuit right.
You absolutely do so and it'syou know, the agreement that,
yeah, definitely documented theagreement that I had with the
prior owner of the practice, theinsurance agency that I
acquired.
It's lost revenue.
(28:43):
It's I get to charge areasonable rate of the revenue
that I anticipated that I lost,on top of the attorney's fees.
So it's not even just theattorney's fees, it's also the
lost revenue that I can justifyhaving lost to your solicitation
of the clients.
You know, I think you know, asbusiness owners, we don't, we
(29:05):
don't like to think about that,but it's, it's protection.
You know you have to take offyour practitioner hat and put on
your business owner hat and youreally need to protect the
practice.
Do you think anyone is evergoing to go out and steal all
your clients?
No, you never.
Ah, you never know what couldhappen.
And and that that again goesback to working with a
knowledgeable legal professionalwho can help you draft
(29:27):
documents that are going toprotect your business.
One last item that I'd like totouch on, just because it also
is, is new law in Minnesota,specifically in in.
I think you know these types oflaws.
If you're not, if you'reveterinary, not Minnesota, these
types of laws are gettingrolled out across the country.
I think more and more statesare are looking to put these in,
(29:47):
but it's Minnesota's safe andsick time law and how that can
impact small businesses.
And again, that you know thedefinition of small businesses,
ah, the the legislativedefinition of small business,
which I think is a revenuenumber and an employee number.
But why don't you touch on someof the changes that are coming
for, ah, small businesses, ah,just in general in Minnesota,
(30:10):
and how that might affectveterinarians?
Speaker 3 (30:14):
Well, um, I think the one that's coming up right now
is and that starts at thebeginning of this next year is
the safe and ah, sick and safetime law, and and, and if you
have one employee, you'resubject to it.
So, basically, so that's howsmall.
Speaker 1 (30:33):
You are One employee.
You're subject to the Minnesotasafe and sick law effective
January 1st.
Right Michael.
Speaker 3 (30:39):
That's correct.
That's correct.
Okay, so that's one of thechanges that.
Ah, employees, our, our legally, our employers are legally
required to allow employees toaccrue one hour for every 30
hours, worked Up to a maximum of48 hours a year.
Speaker 1 (31:04):
So you have to allow up to 48 hours of safe and sick
time for one hour for every 30hours worked.
Speaker 3 (31:16):
If somebody works 2,000 hours a year, you divide
that by 30 hours, that comesafter about 66 hours of paid or
safe, sick or safe time.
But I could cap it at 48?
.
Yeah, exactly.
But the other really importantpart of this is what you're
(31:42):
going to use it for.
And what they can use this foris for their own care of a
family member with a mental orphysical illness, or for medical
diagnosis or preventive medicalor healthcare for domestic
abuse, sexual assault, seekingmedical attention or services or
(32:07):
psychological help orrelocation, or seeking legal
advice.
And it's not just for you, butit can be for a family member,
and they really the definitionof family.
Speaker 1 (32:23):
That's a very broad definition of family member.
I mean it's like it's trial.
Speaker 3 (32:28):
Foster child, adult child, legal ward child of whom
the employee is a legal guardian.
A child whom the employeestands or stood in as a parent,
a spouse or registered partner,sibling, step sibling, foster
sibling.
Biological adoptive a fosterparent, step parent, grandchild,
(32:49):
foster grandchild, grandparent,grandparent.
Child of a sibling.
A sibling of parents.
Speaker 1 (32:59):
So a niece or nephew?
I could take time off for aniece or nephew's illness.
Speaker 3 (33:04):
You have a niece or nephew, and then the other part
is you can name up the onedesignated individual that
you're not even related to.
Speaker 1 (33:13):
So I could name you.
If you were sick, I could sayI'm going to go buy Michael some
chicken soup.
I need the day off.
You got to give it to me.
Speaker 3 (33:21):
Exactly, if I'm your guy, you're protected under the
law you might be my guy, michael, I might make you my guy.
Speaker 1 (33:30):
I might make you my guy for the safe and sick.
Now I think this affects everybusiness in a different way,
right?
I mean, you know, in ourindustry we're a little bit more
flexible, right?
So you know, I have a teammember out right now.
She's pretty ill and she's ahybrid works hybrid, so she
spends part of the time in theoffice and part of the time at
(33:51):
home and this January I decidedI'm just going to go to
unlimited PTO.
I know that that's kind of theother end of the business
spectrum and I said I'm notgoing to get into trying to
track hours and track time andif you need to time off, just
take time.
But I know that there's a lotof businesses out there that
can't afford that sort ofleniency or scheduling and that
(34:12):
sort of thing.
So how does a business whoisn't tracking specifically one
hour for every 30 hours, howdoes that play in?
Speaker 3 (34:21):
Well, you need to show it on their paycheck and
you still need to show it ontheir paycheck, regardless of
how your PTO is set up.
Speaker 1 (34:29):
Okay.
So I need to show that they'reaccruing this time that they can
use for safe and sick timeRight.
So that means you need to workwith a really good CPA and or
payroll provider.
That's got your back even ifyou haven't lived.
So again, back to our networkof professional providers is to
make sure that they're in tunewith what's happening in your
state or because I think moreand more we put it in.
(34:55):
I put that in place for my teamjust because I did not want them
.
I had a team member last yearwhose husband needed an
e-surgery and we were kind oflooking at PTO hours and she was
kind of getting to the end ofher PTO and I was like I really
don't want my team worryingabout whether or not to have the
availability to take time offto care for a spouse and whether
(35:16):
or not they're going to beshort five hours or 10 hours in
a pay period or something likethat.
And again, I know every businessand every practices in a
different spot.
But now working, you know I'vegot a couple notes here that I
got to reach out to my attorneymaybe Michael's my guy to make
(35:39):
sure I'm compliant with SINFINon the Corporate Transparency
Act, but then also, you know,communicate with my CPA and
payroll provider.
Hey, am I making sure, eventhough I offer unlimited PTO,
that I'm tracking this Minnesotasafe and sick time?
And I think that you know theintention is we don't want
(36:02):
employees thinking or worryingabout having to take time off
for all the reasons that youhighlight right, which I think
we'll both agree are both validreasons to be off of work for a
certain period of time and nothave to worry about losing wages
for doing that.
But from a business owner'sside, it's making sure that
(36:22):
you're tracking that so you donot run a foul of the law and
that those things are in placeat your business or practice.
Speaker 3 (36:33):
And along with that you have to provide the
employee's notice of theirrights under the law by posting
or else you're in trouble againand the penalty is because it's
the government, is our stuff, asyou would say.
Well, the employees know aboutit and it has to be in their
primary language and it also, ifyou have an employee handbook,
(36:56):
you need to update the handbookso it exists in there as well.
So you know there's a lot oflittle things about this.
I could probably talk for anhour and a half on this alone.
But, that's the point from that.
Speaker 1 (37:11):
Well, I really appreciate the time today and I
think the key takeaway from allof this whether you're domiciled
in Minnesota as a veterinarypractice or another state is to
make sure that you're networkingand connecting with
professionals, and Michael and Iknow each other through the
Minnesota Veterinary MedicalAssociation and your state
association is a great spot tonetwork with professionals who
(37:35):
understand your industry.
Just as a plug, whether you arein Minnesota or Texas, where
Michael works, you can alwaysreach out to him and we'll get
that info in a second or just,you know, reach out to your
state association and look forthose professionals because you
want to make sure, as theselegislative actions take place,
that you're up to date with,making sure that you're
(37:57):
compliant and not going to run afoul.
That I really enjoyed our timetoday.
Michael, for our listeners outthere who are in Minnesota or
Texas, I know you're in the barin Wisconsin as well.
How do veterinarians find youout there in the world?
Speaker 3 (38:14):
Well, I'm an industry partner with the Minnesota
Veterinary Medical Association,so you can go to that website
and my information is there.
Otherwise, you can shoot me anemail and my email address is
Amazon MichaelS-S-M-A-L-C-H-E-R-T at Larkin,
(38:38):
l-a-r-k-i-n HoffmanH-O-F-F-M-A-N dot com.
Speaker 1 (38:46):
And I think you're on LinkedIn as well, so we'll make
sure to have that contact infoout there as well for LinkedIn
if they want to connect with youthat way.
So well, I've really enjoyedour time together.
Michael, Thanks for being aguest on the podcast.
Speaker 3 (39:01):
Thanks, bill, I appreciate being on, it was
great.
Speaker 1 (39:05):
And, as always for our listeners out there, make
sure to like, share and reviewthe podcast.
It helps with the algorithmsout there and the internet so
that other veterinarians andpractice managers, veterinary
professionals, can get thepodcast.
So tune into the next episodeof the Veterinary Blueprints
podcast, where we bring businessand entrepreneurship principles
to the veterinary community.
(39:26):
Thanks for listening.
Thanks for tuning in toVeterinary Blueprints.
If you have any thoughts,questions or suggestions for an
episode, I would love to hearfrom you.
Email me at bill atbutlervetinsurancecom.
Don't forget to subscribe soyou never miss an episode, and
if you could do me a huge favor.
You know it helps with thealgorithm.
(39:47):
If you can like, share orcomment on the post, leave a
review.
I would love it.
Thanks for tuning in and untilnext time.
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