The Old “Borello” Test

Prior to the California Supreme Court’s ruling in Dynamex, the Borello test prevailed. Under the Borello “economic realities test,” courts first evaluated whether the person to whom service is rendered has the right to control the manner and means of accomplishing the results desired. Then, a number of additional factors are taken into consideration, none of which are dispositive on its own, but all of which are evaluated in the totality of the circumstances. These factors generally included:

1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
2. Whether or not the work is a part of the regular business of the principal or alleged employer;
3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
5. Whether the service rendered requires a special skill;
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
8. The length of time for which the services are to be performed;
9. The degree of permanence of the working relationship;
10. The method of payment, whether by time or by the job; and
11. Whether or not the parties believe they are creating an employer-employee relationship.

The New “ABC” Test

The Supreme Court in Dynamex reevaluated the multi-factor Borello test, and as a result there is a new, three-factor “ABC” test used when evaluating whether a worker has been properly classified as an independent contractor. The Court held that the analysis begins with the rebuttable presumption that a worker is an employee and that an entity classifying a worker as an independent contractor bears the burden of rebutting the presumption by establishing each of the following three factors:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

Failure to satisfy any of the three factors of the ABC test results in a finding that the worker is an employee and not an independent contractor.

What This Means for Hiring Entities

The new ABC Test provides a more rigid framework for compliance and less flexibility in the “grey” areas. As a result, hiring entities should be cautious when classifying workers as independent contractors to ensure that the worker’s classification will satisfy the ABC test. Hiring entities are encouraged to seek the advice of experienced legal counsel whenever classifying certain workers as independent contractors.

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Why video? To some, that may seem like a dumb question, but’s not. In some professional circles, video is what used car salesmen do. It’s what schlocky ambulance chasers use. And it’s what millennials use, not professionals.

According to MWP Digital Media, 55% of people watch videos online everyday.

According to Tubular Insights, 54% of senior executives share work related videos with colleagues weekly.

And according to Wistia, people spend on average 2.6X more time on pages with video than without it.

So, Mr. DeMille, we’re ready for our closeup!

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The are people in companies that feel like outsiders and because of such, their production and participation is not what it should be. Stephen Frueh calls these employees “orphans.” Workplace negativity is an issue many employers face. It leads to decreased creativity, communication, teamwork and motivation. So indentifying what types of negative employees an organization has is important so that business owners and managers can help them achieve goals effectively. Read more about this in Stephen’s article, “Eliminating Negativity In The Workplace.”

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Here’s a link to a short but interesting video on Tony Fadell, the guy credited with bringing us the iPod. In it he talks about his pre-iPod days, some missteps, and some breakthroughs. It’s certainly worth the 3-some minutes it takes to watch.

http://www.inc.com/chris-beier-and-daniel-wolfman/apple-ipod-inventor-tony-fadell-innovation.html

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When I meet someone who is very successful and busy making money for someone else, I ask, “Have you ever thought about running your own business?”

More often than not, I hear many of the excuses that Jeff Haden brings up in his post on Inc.com entitled, “15 Worst Excuses Not to Be an Entrepreneur.”

These are some of the classics:

• I’m too scared.
• I don’t have the right connections.
• I’m too late.
• I don’t have the money.
• I can’t take that risk.

and my personal favorite:

• It’s too hard.

Having run my own business for more than 16 years, I have had many times of it being hard. Sure, I’ve had sleepless nights, but when I look at the quality of my life, I wouldn’t trade it for the world. As Haden says, I’m living my life on my own terms. Immense joy and freedom comes from that. You should try it. •

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The Individual Buyer

Third In A Series

Most owners of small- to mid-sized businesses gravitate toward this buyer when it comes time to sell. Many of these buyers are mature (aged 40 to 60) and have been well-seasoned in the corporate marketplace. Owning a business is a dream, and one many of them can well afford. The key to approaching this kind of buyer is to find out what it is they are really looking for.

The buyer who needs to replace a job can be an excellent prospect. Although owning a business is more than a job and the risks involved can frighten them, this kind of buyer does have the “hunger”– and the need. A further advantage is that this category of buyer comes with fewer “strings” and complications than many of the other types. •

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The Foreign Buyer

Second In A Series

Foreign buyers tend to arrive in the United States with plenty of funds and a huge desire to share in the American Dream. In addition, many have difficulty obtaining jobs in their previous professions because of language barriers, licensing, and specific experience. As business owners, at least some of these problems can be short-circuited.

These buyers work hard and long and usually are very successful small business owners. However, their business acumen does not necessarily coincide with that of the seller (as would be the case with any inexperienced owner). Again, a business broker professional knows best how to approach these potential problems.

Important to note is that many small business owners think that foreign companies and independent buyers are willing to pay top dollar for the business. In fact, foreign companies are usually interested only in businesses or companies with sales in the millions. •

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Family Members

First In A Series

Members of the seller’s own family form a traditional category of business buyer: tried but not always “true.” The notion of a family member taking over is amenable to many of the parties involved because they envision continuity, seeing that as a prime advantage. And it can be, given that the family member treats the role as something akin to a hierarchical responsibility. This can mean years of planning and diligent preparation, involving all or many members of the family in deciding who will be the “heir to the throne.” If this has been done, the family member may be the best type of buyer.

Too often, however, the difficulty with the family buyer category lies in the conflicts that may develop. For example, does the family member have sufficient cash to purchase the business? Can the selling family member really leave the business? In too many cases, these and other conflicts result in serious disruption to the business or to the sales transaction. The result, too often, is an “I-told-you-so” situation, where there are too many opinions, but no one is really ever the wiser. An outside buyer eliminates these often insoluble problems.

The key to deciding on a family member as a buyer is threefold: ability, family agreement, and financial worthiness. •

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So I am inviting you to do the opposite of what you might have been taught by tough cookies or what you learned in corporate-ville circa the 1990s or earlier. Those folks found sport in finding the fraction of disagreement and trying to prove their point. All that does is cause more friction and most of us (when we are well fed, rested and comfortable with who we are) prefer cooperation to antagonism any day of the week.

Here’s my top 8 ways to get on the same wavelength:

1. You get more honey with honey. Leave out the vinegar.
2. Be sure to rack up “yeses.”
3. Seek out opportunities to agree without conceding.
4. Affirm vaguely: “Yes, Elizabeth you have a point there,” or “Yes, Laurie, that was well said.”
5. Use your body language. Nod your head in affirmation.
6. Mirror their speed and pitch. When they lower their voice do so too. When they speed up pick up the pace. This subliminally says we’re similar and that is comforting.
7. Paraphrase and ask, “did I get that right?” they will confirm or correct you.
8. Stand up for yourself with humor. It breaks the tension.

Here’s a fun example of remaining unfettered. As I spoke to a predominantly male networking group (age 45+), I told them how women influence 83% of all purchases so it’s a good idea to learn new ways. A gentleman joked and asked, “Are you saying we should get in touch with our feminine sides?” It turned suddenly very quiet. I was ready to say something funny when another man dove in and said, “Don’t you listen to everything your wife tells you to do?” Everyone laughed and I didn’t have to have the last word. I simply smiled.

Gaining favor is not about being disingenuous. It is not about sublimating or being a wimp. It’s about being diplomatic and having a wise strategy. I’d love to hear from you. Tell me some of the best ways that you’ve diffused tension or get on the same side?

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What magic will Magic bring us?

Word got out last night, and the sports world is buzzing about it today. Guggenheim Baseball Management has been named as the group buying the Dodgers, and this is the group that has brought Magic Johnson in as a part of the deal. All they’ve got to do is pony up $2.1 billion, cross a few thousand “t’s”, dot a few thousand “i’s”, get the bankruptcy court to approve and it’s a done deal.

So what does this mean for Southern California businesses and residents? Will people come back to Dodger Stadium? Will the fare-weathered fans of So Cal embrace Dodger Blue once again?

Often when I attend Dodger games, I’m sitting in one of the upper decks, but for this mega-deal, I was in a box seat right behind home plate. It turns out, one of the courses I teach at Pepperdine University is an Integrated Marketing Communications class, and this semester the class is doing a marketing plan for the Dodgers.

It gets better. I contacted the Dodger marketing and promotions office last year, and the have been helping my students with information background research on the organization. Just two weeks ago, I brought a delegation of students to meet with three of the Dodger marketing and promotions staff. They were gracious with their time and information, but they provided some real insight to what’s going to happen this year…and I’m not sure they even knew it!

Last year was the first in many where the Dodgers had season-long attendance under 3 million. They had a challenging year: the McCourt divorce, a bankruptcy, the Manny Ramirez fiasco, and the Bryan Stow incident. None of those helped matters to be sure, but here’s the important takeaway. Erik Braverman, Senior Director, Marketing & Broadcasting, told us, “Selling tickets is all about emotion.” He went on to tell us that when the team wins, when someone has a streak, when the weather is good, or there is a fun story about a player, people decide to come out.

Well, talk about “feel good!” Magic Johnson is Mr. Feelgood for Los Angeles!

I predict that, provided the deal goes through, we will see the Dodgers far exceed 3 million people through the turnstiles. We will see a return to Dodger pride, and we will see L.A. jump to rally behind the team.

And what’s good for Los Angeles will be good for the rest of Southern California. Good business for the Dodgers is good for the city, and what’s good for the city is good for the Southland. People will be more apt to travel down south to see the Angels and the Padres. Businesses can re-up their season tickets and begin taking clients back to the ballpark.

This, friends in Southern California, is a very good thing!

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