This document provides an overview of various legal topics relevant to agribusiness owners, including litigation processes, asset protection methods, insurance, premises liability, intellectual property, dispute resolution, business planning, tax considerations, estate planning, succession planning, employment law requirements, workers' compensation rules, wage and hour regulations, and the risks of employee misclassification. Key points covered include different types of litigation, using corporate entities and insurance for asset protection, trademark registration, forming business entities, tax implications of entity choice, and employment law obligations for hiring, paying, and insuring workers.

1. © 2016 WARD AND SMITH, P.A.
E. Bradley Evans
Ward and Smith, P.A.
P: 252.215.4025
F: 252.215.4077
E: ebe@wardandsmith.com
Agribusiness

2. THE FINE PRINT
Disclaimer: This is not legal "advice"
2

3. Litigation/Litigation Avoidance
General overview of the litigation process
 Civil v. criminal
 Tort, statutory claims, contract claims
 Pleadings, discovery, trial
 Settlement
 Judgment
 Cost of litigation
3

4. 4
 Corporate entities
 Insurance
Primary Methods for Asset Protection

5. 5
 Types of insurance - property, liability, business
interruption, etc.
 Distinctions between coverage and duty to defend
and value of each
Insurance

6. 6
 Duties owed to guests and trespassers
 Validity of waivers – regardless, they don't prevent
you from being sued
Premises Liability and Waivers

7. 7
 Trademark registration
 Trademark infringement
Intellectual Property

8. 8
SL2015-50 - "Property Protection Act"
 Chapter 99A of the North Carolina General Statutes
 Civil NOT Criminal Penalties

9. 9
 What to do if you have been damaged by someone's
actions or failure to act
 I have been sued (or I have received a "demand
letter") - what do I do and not do?
Practical Tips for Handling a Dispute

10. 10
 Formation of entity
 Why?
‒ Limit liability - still need insurance
‒ Tax efficiency
‒ Separateness for selling or continuity
‒ Trademark considerations
 General process
– File articles with SOS
– Create internal documents (operating agreement, bylaws,
minutes, shareholders agreement)
– File annual reports with SOS
Business Planning

11. 11
 Choice of entity
‒ S Corp v. LLC
‒ Income tax driven
‒ Beware real property in Corp
‒ Trademark considerations
 Present use valuation for property tax
– Beware recapture of last 3 years if sell or cease use
 Estate tax
– Does not affect most folks
– Ability to plan with discounts if estate tax is a concern
Tax Considerations

12. 12
 Importance of having a plan
‒ Intestacy and surprising results
‒ Trusts for your or spendthrift beneficiaries
‒ Advance directives for incapacity
Estate Planning

13. 13
 Transfer to family v. sale to key person or 3rd party
(unlikely to happen without long term planning)
 Real property issues
‒ If not in entity, probate in each state and within each
county
Succession Planning for Business

14. 14
 Requirement to hire only US citizens and
aliens authorized to work in US
– All employees must complete I-9
– All employees must provide required document(s)
– Within 3 days if employment more than 3 days; on first
day if employment less than 3 days
 Documents in support of I-9
– Must accept all proffered documents
– No requirement to verify authenticity of document
– Caution re employment discrimination
IRCA/I-9 Obligations of Employers

15. 15
 Requirements under the Fair Labor Standards
Act
– Minimum Wage and Overtime requirements as
general rule
Minimum Wage and Overtime Requirements

16. 16
 Agricultural exemptions
– Overtime:
• Generally, employers of agricultural workers are
exempt from overtime payment
 Will not apply if work performed on a farm is not incidental
or in conjunction with that farmer's farming operation
 Will not apply to operations performed off a farm if
performed by employees employed by someone other than
the farmer whose agricultural products are being worked
on.
Minimum Wage and Overtime Requirements

17. 17
 Agricultural exemptions
– Minimum wage and overtime
• An employer in agriculture who does not utilize more
than 500 "man days" of agricultural labor in any calendar
quarter of the preceding calendar year is exempt from
minimum wage and overtime provisions of FLSA for that
current year;
 A "man day" is any day in which an employee performs
agricultural work for at least one hour
• Immediate family members
• Those engaged on the range in the production of livestock
Minimum Wage and Overtime Requirements

18. 18
 Agricultural exemptions
– Minimum wage and overtime (continued)
• Local hand harvest laborers who commute daily from
permanent residence are paid on a piece rate basis in
traditionally piece-rated occupations, and were
engaged in agriculture less than 13 weeks during the
preceding year
• Non-local minors, 16 years of age or under, who are
hand harvesters, paid on a piece rate basis in
traditionally piece-rated occupations, employed on the
same farm as their parent, and paid the same piece
rate as those over 16.
Minimum Wage and Overtime Requirements

19. 19
 Overtime exemptions for non-agricultural
workers
– Three requirements for exemption
• Duties test
• Salary basis payment
• Wage more than $455 per week
– Duties tests (most common)
• Professional
• Administrative
• Executive
– FLSA changes on the horizon
Minimum Wage and Overtime Requirements

20. 20
 The North Carolina Workers’ Compensation
Act requires that all businesses which employ
three or more employees, including those
operating as corporations, sole
proprietorships, limited liability companies
and partnerships, obtain workers’
compensation insurance or qualify as self-
insured employers for purposes of paying
workers’ compensation benefits to their
employees.
Workers' Compensation

21. 21
 Exemption
– farm laborers when fewer than 10 full-time, non-
seasonal farm laborers are regularly employed by
the same employer;
– “sellers of agricultural products for the producers
thereof on commission or for other
compensation, paid by the producers, provided
the product is prepared for sale by the producer.”
Workers' Compensation

22. 22
 Payment of all wages promised
– Vacation default rule
 Records
– Hours worked, rate
– Burden of proof on employer
 Withholding wages after separation
North Carolina Wage and Hour Requirement

23. 23
The increasing risk of misclassification
Employee vs. Independent Contractor

24. 24
Interns and Volunteers

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