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Mike Dill

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Mike Dill is the Manager of Policy and Advocacy at Organically Grown Company in Oregon. He sits down with us to talk about the history of Organically Grown Company, his journey into his current role working with organic promotion and protection and what some of the hot topics are in the world of organics. This episode is sponsored by Byron Seeds and SoilBiotics.

<p>Mike Dill is the Manager of Policy and Advocacy at <a href="https://www.organicgrown.com/" rel="nofollow" target="_blank">Organically Grown Company</a> in Oregon. He sits down with us to talk about the history of Organically Grown Company, his journey into his current role working with organic promotion and protection and what some of the hot topics are in the world of organics.</p> <p>This episode is sponsored by <a href="https://byronseeds.net/" rel="nofollow" target="_blank">Byron Seeds</a> and <a href="https://soilbiotics.com/" rel="nofollow" target="_blank">SoilBiotics</a>.</p>

Organic (Policy) Always and Forever with Mike Dill

Inarguably, one of the sectors that have been hit the most by the COVID-19 pandemic is small businesses. Unlike large conglomerates or corporations, many of these small businesses operate independently, with a much smaller pool of resources than their more considerable counterparts, so they have to take a few more steps to deal with the economic aftermath of COVID-19. Mike Dill is a Partner at Holland &amp; Hart LLP. Using his experience working with small businesses, he joins Bob Roark to discuss how small businesses can go about weathering the storm and mitigating any more negative effects that might rear their head in the wake of COVID-19. Don’t miss this important and timely discussion.--- Watch the episode here:[embed]https://www.youtube.com/watch?v=DgQsW6c-M-0[/embed]How Small Businesses Can Weather The COVID-19 Storm With Mike DillIn this episode, we have Mike Dill. He is a partner with Holland &amp; Hart, a firm located out of Denver. He’s a Corporate M&amp;A Security and Startup specialist in the legal arena. Mike, thanks for coming on the podcast.It is my pleasure. Thanks for the invitation, Bob.Given the COVID pandemic and some of Earth’s changing or seismic shifts in the business climate, I thought it was particularly useful to bring Mike on and talk about some of the issues that might be facing business owners. What we hope to cover so you have an idea of what’s coming is we’re going to talk about what you do about staying compliant or being aware of the state local orders and directives. We are going to talk about some of the issues that may be facing you on the HR side of the house. As far as some of the things that you need to be keeping in mind with as you’re either continuing or resuming operations, whether it’s supply chain issues, new business lines or so on. We will talk a little bit if you’ve got outstanding lines, loans, or financing issues and what you do about those. How do you take and provide? There’s a fair amount of concern or shifting landscape on some of the government relief programs, in particular, PPP. We’ve got Mike on. We’re going to go through so you can know what you’re looking forward to in the episode. Mike, why don’t we start out a little bit with how you got here and who you serve?I act as an outside general counsel for a lot of my companies that are clients. They’re smaller companies that can be growing in a variety of industries such as tech and manufacturing, but they don’t have a lawyer that’s on staff. They have a firm that they can call to get a lot of their questions answered. I will help people when they sell their companies. I will help people raise debt and equity financing, but for a lot of my clients, I get asked all kinds of everyday questions, which is, “I’ve got an employee that reported me to the police because I’m still operating when I’ve got to stay-at-home order that’s going on.” That is a real client and a real situation. I am the quarterback of a team at my firm, so I can pull in specialists that are well-versed in very specific issues such as in employment, tax, etc. A lot of the questions I can answer is as an outside general counsel, I help my clients navigate the variety of legal issues that are facing their businesses, which is a lot right now.[bctt tweet="The COVID-19 directives from municipal and state governments are not optional, and should not be treated as such." username=""]I thought we would try to drill down. As we go through the categories, I can imagine the quantity and volume of questions from the clients due to the level of uncertainty. How should they be thinking about the directives from either municipality or state government?The first thing may be obvious, but it’s worth stating. These are not optional directives. A lot of people have different levels of concern over this Coronavirus and the pandemic and the way that it’s affecting their business. You can not choose to disregard them. There are some people that are a little bit more aggressive in their interpretation of the directives and orders than others. You need to be aware of them. They’re changing rapidly at the state level. While some orders have been in place for a long period of time, they’re still changing every four weeks. We’re in a different phase and I’ve seen some planned expansion of orders. We were done with level one. We’re in the middle of-level two. There’s going to be a level 3 and 4 and then there may be a new normal. It’s not going to be back to the old normal. Each of these different levels is going to have different requirements.People are navigating a lot of them because there are some companies, my law firm for example, that we’re not back in the office yet. Even though we could be, we’ve chosen to continue to have people work remotely. It is because we can and it’s safer while we put the procedures in place that are going to protect employees and our customers if they choose to come to our offices. I would start at the state level and then drill down at the county level or the city level, depending on where your operations and business offices are. A lot of the county and local directives are built off of what’s being released by the state or they defer to the state.I’m shifting gears a little bit and thinking toward the HR side of the house. HR remains a topic of interest. There’s going to be a shifting landscape due to what policies and procedures you have in place, depending on whichever level you’re in, bringing people back, and keeping them safe with the COVID crisis. What are your thoughts about that?For a proactive company that put in place new policies, like our firm did, for example, those policies were probably put in place late March 2020 rather quickly. My guess is on a shorter-term basis that this pandemic is turning out to be, make sure that you’re evaluating those as you transition employees back to work to make sure those policies still work and to see if they’re going to work for the duration of the transition. There’s a combination of times where people are going to work remotely and work in the office given that most non-essential businesses can only have 50% of their workforce in the office at this time. First, you’ve got to dust them off, get familiar with them, make sure they’re going to work for a longer period of time. Second, if you didn’t put those policies in place, which a lot of companies did not, how do our existing policies work with this new environment? Are they going to work in the long run? You need to think about whether they’re covering the situations that are coming up on a daily or weekly basis with your employees.One question that we’ve heard a lot is, “I have employees that don’t feel safe at work.” I mentioned the client of mine that had somebody that called the cops on the company. The client was in compliance with the governor’s order. The employee didn’t want to work, so he thought this might be his way to not have to work. He didn’t think that he could get fired for that, which was an interesting perspective. The point behind that example is that there are going to be employees that don’t feel safe. How are you addressing those questions when they come up from your employees? What type of additional procedures are you putting in place? That’s beyond HR, but it does involve HR as well.Small Businesses: Some companies are choosing to have their people work remotely in order to maintain safety while stronger protective procedures are being put in place.As far as you know as an employee, you’re healthy. You’re compliant and you’re doing what you need to go to work. Somewhere midday or along the way, you go, “I feel less well.” For the business owner, if you have a policy, what’s the challenge or issue about making sure that you’re compliant with your own policy?You need to enforce it equally among your employees. This is how life has changed underneath the employment laws with the pandemic. One of the things that you can put in place is if you’re sick, you can’t come to work. If you get sick at work, you have to leave work. It sounds like common sense, but you can do that. You can force employees to go home, as long as they’re in danger of getting other employees or getting customers sick. That’s something that you need to be doing consistently. It reminds me of a situation another client of ours had, which is they’ve been operating within the guidelines correctly. They’ve had mandatory testing when employees check-in and check out at work. They check their temperature.One of the persons that was doing that was a friend with another employee. The employee had been furloughed, hadn’t worked for a while, and needed the job. He failed the test but convinced his friend who was doing the testing to change the results so that he was in compliance. He worked a full day and felt sick. He came in the next day, worked only a few hours, and had to go home. The results were doctored on both of these days. He came on the third day and doctored the result again. There was a huge risk of getting other employees sick. As far as they know, they weren’t any other employees that were sick, so that’s the good news.The point of all of this is you can have great policies, but you need to make sure your employees are complying with them. These employees weren’t and then the employer had to make the decision about whether to terminate, which they have the ability to do. Understandably so, with people not having a lot of work, they wanted to work but they couldn’t. There was too much risk. The fact that you’re lying to your employer was good enough cause to let these employees go.I think about that employer going, “I’ve brought in my workforce back. We’ve managed to navigate this pretty well. We’ve got our policies and procedures in place and yet I have an asymptomatic worker come in and get another at-risk worker ill. What’s my risk as a business owner?”There is real risk; there’s a causation issue here that no one has the answer to. That’s being debated about, “What do we do?” If you can improve or make it likely that they were transmitted on your premises, as an employer, you may have liability for not providing a safe work environment. That’s underneath a variety of federal and different state employment laws and statutes. That’s the real risk. Some employees would bring a claim against you as a business owner for not providing a safe work environment. There’s an additional risk if you don’t do it correctly with current directives about 50% employer and mandatory testing for certain industries. There are additional risks of violating the law, so you could have state agencies or even federal agencies that can bring claims too.All these testings, thermometers and health checks, all I can think of in the back of my mind is HIPAA. Does HIPAA ever creep into here?You obviously can’t share that information about the employee’s health [with third parties]. HIPAA does come into play here, but you could still use HIPAA within your business. You’re not using the medical information as if you were a medical provider. You’re only logging and keeping the information as you’re required to do so underneath the state directive. You can’t share it with third parties, but you can use it within your organization to make decisions about this whether to send employees home or not.I’m that business owner who’s ready to try to get restarted and get my operation going. I’ve got my policies and procedures sorted out. I’ve got my testing sorted out, but I can’t cover all my bases. I would like to try to reach out to my insurance team and ask, “How do I take and offset my risk with an insurance product tool or whatever?” What does that discussion look like?I would wish you the best of luck in that conversation. As far as I know, I haven’t had clients that have had luck in getting those types of claims covered. There are general carve-outs with most CGL policies that deal with things like pandemics. A good friend of mine is an insurance broker with Lockton. They had a lot of calls early on in the pandemic, saying like, “This is great. I’ve got coverage of anything that goes on.” They had a lot of hard conversations with their customers. Unfortunately, there’s not a lot of insurance as far as I’m aware of to purchase to offset some of those risks. There are larger conversations going on about trying to introduce bills to protect employers from liability. A new law that has been discussed is that if you’re operating in compliance with all of these federal state or local directives for your business, you shouldn’t have liability even if somebody does get sick. I’ve been following those conversations and there’s a chance that those may become law. They’re getting a little bit more traction but right now, it is just conversations or proposals.Amidst everything else that a business owner has come in their way, I think about the continuing operation in the new normal is going to be an interesting exercise. As we’re going to back out, hopefully communications with our existing customers have been going along normally as typical. What things do you think they should be thinking about when they’re talking, not just their customers but their supply chain?You’re asking yourself a couple of things. If your business has changed because you’ve pivoted. For example, we have a lot of clients that have started creating or selling masks, PPE, or similar manufacturing operations that they didn’t have before. A lot of the questions that they’re facing are, “How long is this market going to be here for this new product?” And from a regulatory standpoint, there were some matters put in place by the FDA and some other governmental agencies that allow people to operate in a crisis, but it may not operate underneath the longer-term. Check with a regulatory attorney that has expertise with the FDA if you’re making the products in that arena to make sure you can continue to operate them going forward. From a general risk standpoint, we have a lot of clients that are negotiating payment terms, or credit, or collateral with their suppliers or are renegotiating leases or discounts to make sure that they have the cash to operate over the long run. It is a good time to do a lot of those. I never recommend clients not paying because that’s not a good tactic, but it’s good to negotiate.For the company that’s pivoted to a new product line during this timeframe, what things should they think about in this new business effort?One is you need to make sure that you are manufacturing something that there’s going to continue to be a market for. We’ve got a lot of clients that have been moving to manufacture PPE, gloves, face masks, or things that are not their normal product line but are needed in the healthcare setting. There’s the demand requirement, which is more of a business issue. There’s also a regulatory approval requirement- the FDA loosened some regulations for a period of time to allow many companies to do that kind of work. Normally, you’d have to get regulatory approval like a license or permit. You need to be mindful of that if you’re going to do it over the long run. I would check with an attorney with expertise in that area.We were talking a little bit about the financial health check-in and that goes without saying, “If you haven’t checked your health by now, you’re probably reminded as to where you are.” What I wonder is, with some of the rules being relaxed with respect to COVID or whether there is some major force majeure issue because you can’t get supplies. With that type of thought, what might you suggest a business owner consider with respect to contracts? Also, being aware of somebody had a $60 million contract for face masks and they didn’t deliver anything.There has been a lot of high-profile fraud in New York. I saw a LinkedIn post from a mayor from a relatively big city in the Midwest that said, “Don’t LinkedIn me, message me or otherwise, think that I’m going to give you a $5 million contract for face masks only because we’re buddies on LinkedIn.” That is good because lessons are being learned. To point out your immediate question, you need to be having conversations with those lenders or investors, if you brought in other equity investors in your company, with your customers and with your employees. Everyone is expecting life to be different. Some companies are doing well, but I would say the majority of companies are hurting a little bit.Everyone expects that it’s not business as normal and appreciates having upfront conversations. If your clients don’t pay your bills, you can’t pay your client’s bill. It’s a waterfall. We’re starting to see that with landlords, rent, etc. I think people will give you discounts if you’re upfront and have conversations with them at the beginning about your financial health, your situation, and are treating them fairly. You’re going to get a much different result if you choose not to pay rent for 2 or 3 months and you don’t communicate about it. You may have seen Red Robin got sued by their landlord for not paying for two months and they are a public company. They’re not even a smaller mom-and-pop company, so everyone’s hurting.That’s why it’s important to have good upfront conversations with all of those people. People are willing to work together. We’re all in this to get through this together, but you’ve got to be fair. I’ve been advising my clients to not take the position of not paying, instead see how we can adjust the situation going forward. A lot of companies and one tech company in particular that I work with have realized they don’t need as big of a lease as they have. Do they want to pay for that lease for another 1.5 or 2 years if they don’t need it? My advice is, “Don’t not pay for your lease. Pay your lease but negotiate the size of the lease going forward.” That gives the landlord an opportunity to find someone else to potentially sublet it. There are other ways that you can deal with it where it doesn’t result in litigation. I’m not a litigator and I hate litigation. I advise clients if they can, stay away from it.[bctt tweet="As a business owner, you are at risk of liability for not providing a safe work environment." username=""]Let’s say you’re working with some renegotiation, whether it’s a lease, loan, or anything else. Everybody’s in a hurry to, “Let’s get the pain to go away. Let’s go ahead and sign this.” What thoughts might you suggest to the business owner that’s got a modification in front of them as far as signing it or being thoughtful?I would see what the terms are to see whether it’s advantageous to sign it now or it’s more advantageous to be thoughtful because you don’t know what the future’s going to look like. I’ve got a company that that is dealing with an SBA loan that didn’t get treated like an SBA loan. There are certain benefits to them to be treated as an SBA loan with the bank, deferral of principal and interest. There are a lot of benefits to them that they would otherwise get, but we’ve been measured. We haven’t rushed into signing anything because like PPP, these relief packages are changing. We’ve been negotiating with the bank as to what we want. We’re trying to get all of the...

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