Key Legal Considerations for Breweries, Part II: Labor and Employment Matters

Table of Contents

Introduction to Labor and Employment Issues in Breweries

All startups face challenges, but certain recurring issues are especially important to address at the very early stage of a business and throughout the lifecycle of a business.  Breweries must be mindful of labor and employment matters, including how they categorize employees verses independent contractors, having employee policies and handbooks in place, setting out clear duties at the commencement of relationships with service-providers and partners, and performing routine performance evaluations and analysis, as well as maintaining records around departure of service-providers. This blog is part II of Key Legal Considerations for Breweries. Part I focuses on transactional and commercial matters and can be found here.

Important  Labor and Employment Documents for Breweries

Important labor and employment documents in the brewery context include, but are not limited to:

1. Offer letters:

For employees it is important to ensure there is a signed offer letter for each hire. The offer letter should clearly set forth the compensation, benefits, expectations and duties and title of the role for hire. This acts as an important framework for future performance evaluations and the general duties should be made clear at the start of the relationship, as well as the expectations around time commitment/hours (part-time or full-time), reporting, role and any specific milestones or performance conditions for commissions or bonuses, etc. The offer letter should also accompany a confidential information and invention assignment agreement, if applicable (see below), and a written acknowledgment of receipt of, and agreement to comply with, the employee handbook (see below).

2. Employee Handbook:

The employee handbook is a critical guide for the business and business operations, the legal policies and practices of the business and providing to the service-providers what is and is not permissible in the workplace. Often, payroll providers can provide basic employee handbooks under state and federal law. However, the most effective employee handbooks are those that are generally kept up to date with changes in law, are customized to the specific business, and meet all the requirements pursuant to state and federal laws, which are best sourced from a lawyer or a law firm that has a labor and employment practice. These policies and laws are evolving and important to set out clearly so that if there are incidents in the workplace over time, they can be documented accordingly and added to the employer’s human resources records.

3. Required Posters:

Certain labor and employment-related information and posters are required to be made available and posted clearly and conspicuously in the workplace, if applicable to the employer. In Maine, information on certain of these posters can be found on the Maine Department of Labor website,  and these include minimum wage posters, workers compensation information, sexual harassment posters, OSHA posters, and others. Similarly, posters required under federal law, can be found on the U.S. Department of Labor website, and include information on employee rights under the Fair Labor Standards Act, Job Safety and Health posters, Family and Medical Leave Act (FMLA) information, non-discrimination information, among other important information. An employee rights guide for Maine can be found here, that provides details on breaks, overtime, benefits, collective bargaining, privacy, wages, safety and health, paid leave and other information. All of these issues and rights (and processes and procedures for addressing these rights) should additionally be addressed in the employee handbook.

4. Independent Contractor or Consulting Agreements: 

For service-providers who are not employees and instead are independent contractors, it is also crucial to enter into a clear consulting agreement. This agreement should include provisions around the duties and expectations, the term of the relationship, the nature and scope of the relationship as an independent contractor, the compensation, the ownership of inventions or other intellectual property produced by the independent contractor, confidentiality provisions and other details. It is critical that employers understand the difference between an independent contractor and an employee. Regardless of if an agreement provides that someone is an independent contractor instead of an employee (and thus not required to receive certain benefits, minimum wage, overtime and other legal benefits availed to employees), the relationship itself and applicable law will govern whether the service-provider is indeed an employee or independent contractor. 

In Maine the criteria for classification of independent contractors verses employees can be found here and the Maine Department of Labor provides a handy matrix for determining whether the service-provider should be classified as an employee or independent contractor with questions and answers that can be found here. Relevant considerations include whether the individual is free from direction or control of the employer; if the individual has the right to control the means and progress of the work except as to the final results; if the individual is customarily engaged in an independent trade, occupation, profession or business, and other criteria weighing in favor of a finding of an independent contractor relationship. Largely, if the individual is subject to employer control and such person performs work that goes to the heart of the business (rather than being an individual which conducts its own business with its own facilities, tools, instruments, has its own assistants that it pays and hires and controls, doesn’t participate in the profits of the business), then the individual may be considered an employee instead of an independent contractor.  However, this varies from state to state and it should be both documented appropriately in the consulting agreement as well as assessed as a matter of applicable state law.

5. Confidential Information and Invention Assignment Agreement:

The importance of confidential information and invention assignment agreements are often underestimated. All businesses should have forms of these agreements for both employees and independent contractors or include these terms and provisions in an employment agreement or consulting agreement, if not a separate agreement. These documents should contain provisions protecting the business confidential information, trade secrets, processes, formulas, know-how, customer lists, supplier lists, business data, financial information, information regarding personnel, etc. from third party use and disclosure. Most investors or acquirers of a business will want to see there is a diligent database of such agreements maintained for every service provider to the business. These documents are also crucial to protecting the brand, the goodwill, the intellectual property of the company and assigning all rights in and to the proprietary information and intellectual property to the business. Note that these documents can protect the confidential information of the business from being used outside the context of the business. This is especially important given that both state and federal law has moved away from encouraging non-competes outside of the context of a sale or acquisition of a business.

6. Indemnification Agreement for Officers/Founders:

Indemnification agreements are important to put in place for executive officers, founders of a business and brewery operators. These agreements protect individuals who serve the business in the scope of their employment in the general interest of the company from being personally liable for their business activities appropriately performed for the business. Every founder should enter into an indemnification agreement at the commencement of services to the business and the agreement should provide for generally broad indemnification with certain exceptions for illegal or other behavior not in the best interest of the company and indemnification generally in compliance with law, such that if the individual is sued for performing his, her or their job, such individual will have cost and liability protection from the business, including its related insurance policies. Accompanying these documents with proper D&O insurance (Directors and Officers insurance policies) is also of critical importance, among other insurance policies for the business such as general liability and workers compensation policies.

7. Performance Evaluations,  Reviews and Performance Improvement Plans:

In connection with the employment agreements or offer letters in place and the duties required of individual service-providers, it is equally critical to keep a record of performance and compliance and non-compliance with company policies and agreements, as well as all communications between management or Human Resources and such individuals regarding the services provided. By keeping a maintained set of records, if there is a subsequent lawsuit, the business already bolsters its defenses and mitigates liabilities by having a clear paper-trail on expectations, performance history, and proper communication between management and staff.

8. Resignation Letters and Separation Agreements:

It’s similarly important to put in place agreements documenting the end of relationships with service-providers. For example, if someone voluntarily departs the business, it’s a good idea to have a very short letter of resignation in writing (whether it’s via email documenting the end date) or (better) in a short, executed letter documenting the end date, acknowledging the resignation and that all confidential materials and company devices have been returned to the business. If there is an involuntary separation (a termination of the employee not initiated by the employee), it may also be appropriate to prepare a separation and release agreement to document the end of the relationship and release claims between the departing individual and the business, particularly if there is any tension related to the departure. Typically, consideration would be required for a release of claims, other than what the departing individual was already entitled to under its general employment terms.


As you can see, there are steps that can be taken for breweries and other companies to protect and strengthen its workforce pertaining to labor and employment laws. Sometimes it’s a simple as having a handy group of templates and forms that can be customized for each relationship with the help of an attorney or a human-resources professional. Keeping these records greatly reduces the likelihood of liabilities and in any case increases the ability of a business to defend itself in circumstances where it has taken appropriate actions to communicate rights, duties and obligations to its service-providers, as well as to defend against other labor and employment issues. At Rogoway Law Group we can assist you in creating a simple cost-effective framework and set of resources for labor and employment matters so that you can focus on what you do best- moving quality product for the consumer to enjoy.

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