March 2016 Business Magazine

Mar c h201 6

Remember... Turn your clocks ahead one hour on Sunday, March 13 at 2 a.m.

The MBA has partnered with Logistics Plus速 to create a new Logistics Program for you, our members!

Visit mbausa.org/logistics for more information.

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(814) 825-1891 | 349 E. Grandview Blvd, Erie, PA 16504

FEATURES FEATURE STORY | WHAT’S INSIDE

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ARTS, SPORTS & ENTERTAINMENT What businesses can learn from these competitive industries.

COVER STORY | LOCAL PROFILE

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HOME TEAM ADVANTAGE

The home team advantage — how the SeaWolves, Otters and BayHawks are providing an economic boost through developmental and minor league sports.

SPOTLIGHT Q&A| FIRST LOOK

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How Erie Events is helping the region get a piece of the action when it comes to the local arts, sports and entertainment industries.

Casey Wells

EDITORIAL DEPARTMENTS

EVENTS & EXTRAS

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SPECIAL INSERT

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BUSINESS BUZZ FIRM PROGRESS

HEALTH MATTERS | KEY RESOURCES

MBA TRAINING SCHEDULE

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New Course Listings

PEOPLE BUZZ ENDORSED

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HR CONNECTION

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HR Q&A

WORKPLACE TRENDS

EMPLOYEE ANSWERS

Executive Editor & Senior Writer Karen Torres ktorres@mbausa.org

Feature Photography Matt Kleck Rob Frank R. Frank Photography

Contributing Writers John Persinger Kismet Toksu

Additional Photography Casey Naylon Erie BayHawks Erie Otters Erie SeaWolves iStockPhoto.com

Why private insurance exchanges are a viable business option.

Kismet Toksu

LEGAL BRIEF | UPDATE

READ ON THE GO! For the most current Business Magazine updates, visit mbabizmag.com.

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How the NLRB’s interpretation of anti-recording policies could impact our social-media dominated world — especially in the workplace.

John Persinger

ON THE HILL | SPEAKING UP

Design, Production & Printing Printing Concepts Inc. printcon@erie.net

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Advertising Sales David Thornburg 814/833-3200 dthornburg@mbausa.org

Read about the Employee Rights Act by the MBA’s state government relations representative Angela Zaydon.

Then comment on it in our new CEO/CFO Soundoff blog!

On the Cover: Team owners Fernando Aguirre of the Erie SeaWolves, James Waters of the Erie Otters and

Steve Demetriou of the Erie BayHawks represent the powerhouse of the local sports industry. For full story, see page 4.

Mission Statement: The Manufacturer & Business

Association is dedicated to providing information and services to its members that will assist them in the pursuit of their business and community interests. – Board of Governors

Manufacturer & Business Association 2171 West 38th Street | Erie, Pa. 16508 814/833-3200 or 800/815-2660 www.mbausa.org

© Copyright 2016 by the Manufacturer & Business Association. All rights reserved. Reproduction or use of editorial, pictorial or advertisements created for use in the Business Magazine, in any manner, without written permission from the publisher, is prohibited. Unsolicited manuscripts cannot be returned unless accompanied by a properly addressed envelope bearing sufficient postage. The magazine accepts no responsibility for unsolicited manuscripts or artwork. The Business Magazine and Manufacturer & Business Association do not specifically endorse any of the products or practices described in the magazine. The Business Magazine is published monthly by the Manufacturer & Business Association, 2171 West 38th Street, Erie, Pa. 16508. Phone: 814/833-3200 or 800/815-2660.

mbabizmag.com • MARCH 2016

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FEATURE STORY | WHAT’S INSIDE

Arts, Sports & Entertainment LESSONS FOR BUSINESS TEAMS It’s nearly time for March Madness and the inevitable bracket-busting to begin. Sports — as well as arts and entertainment events — are a good way to break the ice with colleagues, but also offer some great lessons for small businesses as well — from management styles and recruitment strategies, to the importance of delivering a superior level of customer service. Now may be the right time to see how your team matches up.

BY THE NUMBERS It’s often said that success for the individual only happens when the whole team wins; the same is true in business, and that’s where “team building” comes in.

Experts say team building helps to foster better and open communication between employees and their employers. Plus, it goes a long way in improving understanding and cooperation and is often reflected

• Highly engaged employees are 87

teams and venues that are helping provide

percent less likely to leave their jobs

an economic boost to the region, as well

than disengaged employees are,

as the importance of health and safety in

reducing turnover rates.

the workplace. We’ve also included the most current list of computer, HR and

• Workers in employee training programs and leadership development programs are 45 percent more likely to stay with their employer.

employee motivation and building trust among employees, thereby ensuring better productivity, as well.

Consider the stats:

new Training Schedule. Please contact the Manufacturer & Business Association today with any training assistance your team may need.

in the quality of work being done. Team building significantly contributes toward

professional development courses in our

TAKE A LOOK In this issue of the MBA Business Magazine, we’ll explore the advantage of taking a team approach to your business. We’ll look at the benefit of supporting the home

• Companies with engaged employees receive 2.5 times more revenues than companies with low engagement levels.

Building a great team is key to business success!

mbabizmag.com • MARCH 2016

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Fernando Aguirre is the owner of the Erie SeaWolves. The team plays 71 home games each season at Jerry Uht Park.

HOME TEAM ADVANTAGE:

ERIE SEAWOLVES, OTTERS AND BAYHAWKS Local Sports Industry Provides Economic Boost

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hether it’s baseball, hockey or basketball, Erie, Pennsylvania appears to be winning when it comes to supporting a thriving professional sports scene. Over the last decade, Pennsylvania’s fourth-largest city has established a supportive fan base for the SeaWolves, Otters and BayHawks franchises.

“For a community our size, that’s very unique,” says Erie Events Executive Director Casey Wells, whose group leases the facilities used by the teams.

“You’d be hard pressed to find any that have an NBA-affiliate team, a hockey team (and) a AA baseball team.”

According to Erie Events, the newly renovated Erie Insurance Arena – home to both the Otters and BayHawks — reported an estimated $42.5 million in direct spending from events, including hockey and basketball games, held in 2014. Jerry Uht Park — home of the SeaWolves baseball team — reported direct spending of $24 million, including the 71 home games played that season.

When the Erie SeaWolves open at home on April 14 at Jerry Uht Park, it’s likely no one will be more excited than the team’s new owner Fernando Aguirre.

Aguirre’s acquisition of the Detroit Tigers’ AA ball club from Mandalay Baseball Properties in 2015 marks his third investment in the business of baseball. Aguirre is the second largest owner and vice chairman of the Myrtle Beach Pelicans and also owns a minority interest in the Cincinnati Reds.

The Mexico City native has an impressive business background as a former executive for Procter & Gamble Company and chairman and CEO of Chiquita Brands International. He also was the first Hispanic leader to appear on the TV show, “Undercover Boss.”

“I retired from Chiquita and decided that I didn’t want to keep doing the corporate life that I had been doing for 33 years or so,” he says.

“After investing in the Reds, I learned a little bit about the business side of baseball and, at some point, decided that I wanted to get into investments in sports franchises. My plan was to buy into two minority stakes in different teams with different partners.”

Aguirre’s business partner in the Pelicans’ organization introduced him to Mandalay, which was open to the idea of selling the Erie team.

“I viewed this as a great opportunity to have a long-term deal with the city, the county and the state to keep professional baseball in the area,” says Aguirre. “That’s why I decided to go ahead and get in.”

In the business of baseball, both AA and AAA are high-quality leagues.

Once players make it to AA, there’s a 50-50 shot of making it to the major leagues.

“Only 30 cities in the entire United States can say that,” says Aguirre.

“Frankly, that’s why we’re sought after by different regions and by different cities. Professional baseball is good for the region economically speaking, it’s a good quality sport, and it’s great entertainment.”

The teams provide full-time and part-time job opportunities and help contribute to amusement taxes. Indirectly, the teams’ presence benefits various vendors in addition to many small businesses — hotels, restaurants and bars. Bertrand Artigues, owner of Cloud 9 Wine Bar, describes game days as busy for his establishment. “Anything that is going to bring people downtown is good for us.”

According to a report by Pricewaterhouse Coopers LLP, the North American sports industry revenue will grow at a compounded annual rate of 4.8 percent to $67.7 billion by 2017. In the accelerating sports market, Erie and Erie County are fortunate to be getting a piece of the action.

“There’s always talk about what size market we are, and we’re somewhere, I think, between a secondary and tertiary market depending upon who’s defining it,” says Wells, of the local market. “Clearly, we have a lot of cultural, sports and entertainment opportunities available to people in our region.”

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MARCH 2016 • mbabizmag.com

The SeaWolves have been the AA affiliate of the Detroit Tigers since 2001.

Research indicates fans have a broad satisfaction with the game day experience presented by Minor League Baseball teams.

A recent study by Turnkey Intelligence gave a Net Promoter Score (NPS) of 58, positioning the league on par with other highly recognizable brands, including the National Football League (NFL), Amazon.com and Westin Hotels & Resorts Experts say one of the biggest draws to the minor league model is its affordability. The average minor league baseball experience is around $60 for a family of four — well below the hundreds of dollars at the major league level. “Sixty dollars is a fantastic way for families to all have fun at a game,” notes Aguirre. “They don’t have to go and bet their farm, mortgage their house, or sell their cars to be able to take the full family to a game.”

James Waters bought the Otters in 2015, the team’s 20th anniversary season.

For sponsors, the advantage is the brand exposure they get 71 times each season before home crowds of up to 6,000 people.

the Ottawa Senators, Pittsburgh Penguins, Los Angeles Kings. The fact that Connor McDavid of the NHL’s Edmonton Oilers played for the Erie team sweetened the deal.

Yet, there’s always improvement to be made in any business model and any business operation. For the SeaWolves, that’s small improvements and growing attendance.

The larger picture is getting maintenance improvements to the 21-year-old stadium.

According to Aguirre, park improvements are needed to not only operate a high-level team but also to create more event opportunities, such as the minor league’s version of the All-Star game. Continued support from the business community and local officials will be key to the success of the organization.

“Hopefully, we can do all the right things from our end as the ownership and also from the end of the city,” he says. “Both of us have a lot to put on the table to make sure that we’re both satisfied with our arrangement so that we can stay for many years.”

Both on and off the ice, the Erie Otters has had one of the most remarkable seasons to date. In April 2015, the team, members of the Midwest Division of the Ontario Hockey League, filed for bankruptcy and was purchased by retired businessman James Waters for $7.225 million.

Waters, a self-described sports enthusiast, started playing hockey at 8 years old and, along the way, worked for his family’s broadcasting business (CHUM) in Canada, serving as president from 1994 to 2006 and chairman of the board from 2002-2006.

He also served on the board of directors for Ottawa Rough Riders of the Canadian Football League and owned the franchise from 1977 to 1987.

Waters decided to look seriously into buying the Otters after getting a call from longtime friend and now Otters Chief Operating Officer Roy Mlakar — a veteran of professional hockey with executive roles with

Mascot C. Wolf is one of the mainstays of the ballpark and fan experience.

“I think I wandered into the perfect storm here as an owner,” Waters says. “It’s my first opportunity to own a sports franchise, which is a lifelong dream. But, to walk in here in the 20th anniversary year and to a very, very good hockey team that has a really good chance to maybe be champions, I’m very fortunate to be here for this special season.”

Since taking over ownership of the Otters in July, Waters has been adopting Erie as his home away from home. He regularly travels from his homes in Toronto and Florida to attend home games.

“I’m stunned every time I come here; how nice the people are, the response I get from the business people. People walk up to me and say, ‘Thank you for saving our hockey team.’ ” The Otters’ presence provides not only another level of competitive hockey for the area, but also jobs. In addition to coaches, players and office staff, an estimated 100 people are employed on game nights, and local vendors and contractors benefit from the business generated by the team.

Waters and his management team are focused on giving the up to 6,700 fans and sponsors in attendance a value-added return on their investment. “We’re trying to make

The Otters are members of the competitive Ontario Hockey League, producing NHL standouts like Connor McDavid.

mbabizmag.com • MARCH 2016

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this a very positive experience for people when they come to the arena.”

Otters Operations Director John Frey says that means offering a wide array of opportunities for both businesses and the team to support each other. “We have people come up to us and say,’ We should be supporting you.’ My answer to them is always, ‘No, we should be supporting each other. We should be finding a way to help you. What can we do, and what makes sense in your business?’ We’d rather be an investment that’s going to help them.”

Today, experts say, the No. 1 goal is increased level engagement — more interactive promotions and events. “Twenty-five years ago, people bought a sign on the wall, and they got four tickets, and they were happy,” explains Frey. “People don’t want that anymore. They want some sort of interaction, and that’s why we do community events.

That’s why we’re out a lot, and that’s why we have so much going on during the game. “

In the competitive arena of professional sports, franchise values are soaring, and basketball is no exception. For smaller investors, one way into the hoops business has been through the NBA’s minor league — the NBA Development League.

The BayHawks, Erie’s D-League affiliate, has been a community asset both on and off the court since 2008, when it was first affiliated with the Cleveland Cavs and Philadelphia 76ers, and is now a hyprid partner of the Orlando Magic.

Longtime owner Steven J. Demetriou, a Cleveland resident who serves as president and CEO of the California-based Jacobs Engineering Group, and lead local investor Owen J. McCormick, president and CEO of Joseph McCormick Construction Company, initially bought the franchise rights of the team for more than $1 million. Both passionate basketball fans, the deal offered the pair a chance to be part of the NBA that has become a success story of a small business that has grown in value.

“The investment was really secondary,” says Demetriou. “We went in potentially saying that, ‘If we never get this money back, so what? This will be a really enjoyable thing.’

What it’s now turned out to be is a pretty nice investment because, once you get to 30 teams, there’s no more growth from a standpoint of expansion. It becomes like an island property.”

Off the ice, Shooter gets fans energized on game nights.

According to the BayHawks’ front office, the most transformational shift has been the commitment that NBA teams have made to the NBA D-League. Teams, such as Orlando, recognize the role the D-League plays in developing players and building the brand, while also having an investment in smaller markets.

“The state of the league is stronger than ever.

It’s been really strengthening every year,” says Demetriou. “When we put the BayHawks in Erie, there were a lot of questions at that time on whether the league was going to be a strong league and even survive, but ultimately, it’s grown to 22 and will get to 30.”

The BayHawks’ hybrid partnership with the Magic runs through the 2016-2017 season. While the Magic runs control of the BayHawks’ basketball operations — hiring coaches and selecting players — the team’s owners run the commercial, business side of the enterprise.

The NBA D-League offers an up-close look at what could be the NBA’s next all-stars.

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MARCH 2016 • mbabizmag.com

The BayHawks’ operation has been successful in having the backing of several ownership partners and major sponsors, including the Lake Erie College of Osteopathic Medicine (LECOM) — the team’s official presenter and medical provider.

Owner Steve Demetriou helped bring the BayHawks to Erie in 2008, along with lead local investor Owen McCormick.

“All of our business partners have stepped up in support of the BayHawks the entire time,” notes Owen McCormick. “Our fan base has grown, and the excitement and recognition of the BayHawks as a community asset is certainly apparent by all the people who courted us throughout the years. “ Ultimately, the viability of the team is important from a standpoint of making sure the sports franchise is financially healthy and supported by sponsors and fans. “The most important experience that a basketball fan gets by attending a BayHawks’ game is they get to see the future NBA players now,” says Demetriou.

Still, the organization is always looking at strategies to get a better mix of growth, whether it’s season tickets, group sales, same-day tickets or merchandise. Demetriou also sees strengthening transportation options — specifically, flights — as key to the team’s future. “We’re very happy with Erie. I think part of the long-term viability of Erie is making sure that we can grow, but also that it’s a good fit for our NBA partner.”

D-League President Malcolm Turner is positive about what he sees from the Erie operation.

“Steve Demetriou, Owen McCormick and the ownership group in Erie have established the BayHawks as an exemplary operator in the NBA’s Development League,” he says. “Under the leadership of team President Matt Bresee, the BayHawks have built a successful brand, become integral members of their community, and put a competitive and entertaining product on the court every night.”

For team information, visit SeaWolves.com, ottershockey.com or www.eriebayhawks.com.

Clutch’s over-the-top mascot routines are one of the highlights of each BayHawks’ game.

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MARCH 2016 • mbabizmag.com

SPOTLIGHT Q&A| FIRST LOOK

Sports, arts and entertainment are not just leisure activities, but enormous economic drivers for many cities in terms of revenue and employment.

Erie is no different. Casey Wells, executive director of Erie Events, explains the importance of these industries as well as the local venues — Bayfront Convention Center, Erie Insurance Arena, Jerry Uht Park and Warner Theatre.

How would you describe the appetite for sports, arts and entertainment in Erie?

Clearly, we have a lot of cultural, sports and entertainment opportunities available to people in our region. For a community our size, that’s very unique. You’d be hard pressed to find any that have an NBA-affiliate team, a hockey team, a double AA baseball team, a philharmonic orchestra, Broadway series, Playhouse and two ballet companies.

What are you doing to make Erie more attractive to big-name performers?

There are many ways in which we try to attract artists here. Once they come here, we try to provide them with a top, first-class experience, make it easy for them and their crew, like it’s a day off because we have everything covered, which also makes it easier for us to attract them for a return engagement. There’s nothing that enables and encourages promoters and acts to come to Erie more than previous successes. If they see that Jason Aldean sold out in 13 minutes, I’m going to get more Jason Aldean. The more tickets we sell, the better it positions us to get more shows.

Erie is home to three professional sports affiliates. Describe the economic stimulus they provide.

We have as many as 100 people working on every Arena event. That’s significant. Some are even higher. We’re buying product from local vendors, beer, pop, food of all sorts.

That’s locally sourced and has a significant economic impact for those vendors that supply those products. I would suspect we’re one of the largest soda and beer accounts in the community.

To keep the Otters here and to keep the BayHawks and the SeaWolves here, we also provide very aggressively friendly rental rates. We have to be sure that these teams make money, and we do everything we can to provide them as many revenue streams as possible because it makes no sense to have a ballpark or an arena or a theater without programmed events in them.

hotel on Erie’s magnificent bayfront and connected to the Convention Center, which will enable us to attract additional conventions and events to our community.

ct spending 2014 diL re ION $94.3 MIL

ION $ 4 2 . 5 M I L LE AREN A

It’s been over two years since Erie Insurance Arena underwent its extensive $47-million renovation.

How would you describe the return on investment today?

I can describe it in the fact that the Erie Otters are still here. I’m convinced that our hockey team would have gone to greener pastures had we not made that reinvestment. It also makes it a much more customer-friendly place for our patrons and much more comfortable for our teams.

ERIE INSU RANC

N $ 2 4 M I L L I O PARK JERR Y UHT BALL

ON $ 1 6 . 7 M I L L IENTI ON CENT ER BAYF RONT CONV

ION $ 11.1 M I L LTRE WAR NER THEA

ates for the Shifflet and Associe over 2013) data from D.K. * Based upon lvania (7.7% increas lth of Pennsy Commonwea

What can we expect from Erie Events in 2016?

We’ve unveiled the development plan for the former GAF site. In 2016, we will have purchased the property necessary for the final phase of the restoration and expansion of the Warner Theatre. We’ll also be opening a Courtyard Erie Bayfront Hotel, a 192-room

$ 5 6 5,6 15 $ 11 6 , 8 7 2

INFRASTRUCTUR PAYMENTS

$ 2 0 2 ,7 9 2 PERMITS/FEES

E

$ 17, 4 4 2 3 9 6 , 418 222,406 14 6 , 4 5 1 86,023 8 5 1, 2 9 8

Tell us how these venues are making Erie a tourist destination.

We are now attracting more folks from the 60- and 70-mile radius that we consider our market. They’ll come up to Erie to see a game as opposed to going to Pittsburgh or Cleveland because of the value that they get here and the enhancements in the facilities that make it a great experience.

ts 2014 paymtyenof erie made to ci

2014 event at tendance

ARENA ERIE INSURANCE ARK JERRY UHT BALLP ENTION CENTER BAYFRONT CONV WARNER THEAT

PARKING TAX

$ 2 12 ,14 9

AMUSEMENT TAX

$ 16 , 3 6 0

OTHER TAXES

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DANCE TOTAL EVENT ATTEN

rt to the “2015: A Repo

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e Events.

The Arts Advantage According to data from the 2010 Art & Economic Prosperity Report, the nonprofit arts industry in Erie County: • Generated more than $18 million in economic activity • Supported more than 600 full-time equivalent jobs • This economic infusion resulted in more than $1.7 million in local and state government revenues.

• Additionally, the typical attendee to a nonprofit arts event spends $17.14 per person.

Courtesy of Erie Arts & Culture.

mbabizmag.com • MARCH 2016

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Have You Made Your EITC Donation?

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On hand for the check presentation were (from left): Bruce Kern II, president, Curtze Food Service; James Bucksbee, president, Erie County Vocational-Technical School Foundation; Jennifer Pontzer, executive director, Career Street; Christopher Holmberg, director of human resources, Curtze Food Service; and, Scott Kern, vice president and general counsel, Curtze Food Service.

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MARCH 2016 • mbabizmag.com

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Leadership for Team Leaders Series - Erie

From left: Power Drives Inc. Plant Manager Ryan Ray (third from left) and Leadership for Team Leaders graduates Aaron Falk, Paul Heinemann and Andrew Newton.

— Ryan Ray, Plant Manager Power Drives, Inc.

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April

May

Professional Development

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Certified Supervisory Skills Series Course I Course I (Kittanning) Course II (Meadville) Course III Course IV

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Six Sigma Green Belt (Three-day workshop)

4/21, 5/19 and 6/16

Finance for the Non-Financial Manager

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Food Safety Certification

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Certified Supervisory Skills Series Course II (Kittanning) Course II Course III (Meadville) Course IV Course V

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Leadership for Team Leaders Series Course I

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Supervisory Safety Series Course I Course II Course III (Grove City)

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Forklift Truck: Train the Trainer

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Must-Haves of Effective Communication

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Must-Haves of Effective Communication (Warren)

5/19

What Every Small Business Needs to Know About EDA/DEP

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IMDG Dangerous Goods Training

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June

Training

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Certified Supervisory Skills Series Course III (Kittanning) Course III Course IV (Meadville) Course IV (Kittanning) Course IV Course V Leadership for Team Leaders Series Course II

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Fairfield Inn & Suites 200 Fairfield Lane Park Inn by Radisson, Clarion

45 Holiday Inn Road Corry: Higher Education Council

221 North Center Street DuBois: Best Western

82 North Park Place Erie: Manufacturer & Business Association Conference Center

2171 West 38th Street Grove City: Hampton Inn & Suites

Holiday Boulevard Hermitage: LindenPointe

3182 Innovation Way Kittanning: Armstrong Educational Trust

81 Glade Drive Meadville: Holiday Inn Express

18240 Conneaut Lake Road Mercer/Grove City: Hampton Inn, Grove City

4 Holiday Boulevard Oil City: Keystone Community Education Council

206 Seneca Street St. Marys: Community Education Council of Elk and Cameron Counties

4 Erie Avenue, Suite 200 Titusville: Towne Square Conference Center

110 West Spring Street Warren: Warren/Forest Higher Ed Council

589 Hospital Drive, Suite F Williamsport: Genetti Hotel

200 W. Fourth Street * Handicap access and parking available at all sites.

Onsite Training Get more flexibility and convenience with our onsite training options ­— one of the most cost-effective choices for group instruction.

• Flexible and convenient scheduling • Customized instruction • Eliminate travel expenses

Course Registration Contact Terry Nunez at 814/833-3200, 800/815-2660 or tnunez@mbausa.org to register or for more information on upcoming courses. Online registration also is available at www.mbausa.org.

ONSITE TRAINING PROFESSIONAL DEVELOPMENT Supervisory Skills Leadership for Team Leaders Customer Service One-Day Food Safety Certification And much more!

COMPUTER TRAINING Word Levels I, II, III Excel Levels I, II, III Access Levels I, II, III And much more!

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Considered a leader in professional development and computer training for more than 25 years, the Manufacturer & Business Association offers you the ease and flexibility of onsite training for groups of six or more employees.

Onsite Convenience: Nothing beats the convenience of training conducted at your facility. Let our expert instructors bring the training you need, when you need it, where you need it.

Customized Programs: From full-day to half-day programs, all of our courses can be tailored to address your organization’s specific needs.

Focused Interaction: Facilitated by our training specialists, your employees’ experience is further enhanced through group discussion on key topic areas specific to your company’s work environment.

Call Terry Nunez for more information about onsite training programs at 800/815-2660 or 814/833-3200, or visit www.mbausa.org.

HEALTH MATTERS | KEY RESOURCES

Private Exchanges: A Viable Business Option Kismet Toksu is president of eBenefits. On a single platform, eBenefits software and services enable customers to execute short- and long-term benefits administration, ACA compliance and private exchange strategies. eBenefits is part of the UPMC Insurance Services Division.

Public exchanges have gotten a lot of attention since the advent of the Affordable Care Act, but as the law has evolved, it has worked to increase the popularity of another product — private exchanges.

In 2015, an estimated 6 million workers selected health plans from private exchanges.

It is estimated that 40 million will choose private exchanges by 2018.

Private exchanges differ from public exchanges in many ways, the most notable being that public exchanges are always sponsored by either the federal government or state government. A private exchange may be sponsored by an employer, broker or association.

Private exchanges are gaining in popularity because employers realize that they can be a viable business option that provides predictable cost control, while also empowering employees to become smarter consumers of benefits.

Generally speaking, public exchanges serve individuals, or small employer groups, up to 50 lives. Typically, private exchanges serve the employer group market. Private exchanges also vary on the size of the companies they target. Due to rules that govern public exchanges, products offered are more limited than those available on private exchanges. Another big difference would be customer experience and service.

Private exchanges are attractive because of the options that they provide, both in terms of benefits that may be offered and companies that offer products. Under a public exchange plan, members can choose coverage for medical expenses and prescription drugs only. Private exchanges may offer much more than medical and prescription plans, including dental and vision coverage, disability, accident and critical illness. Even non-medical plan options, such

Private exchange plan options have fewer limitations and some may be more customized. In addition, there is more cost certainty for employers, who are often responsible for paying the largest portion of the coverage. This type of funding is called “defined contribution.” The defined contribution may be used by the employee to offset costs of the products selected.

Employer Benefits One advantage for an employer is that they can continue to reap tax benefits by providing employee access to health insurance.

Employers can also retain some control over their benefit offering. When employees understand the true cost of their options, they are more likely to make cost-effective decisions. That can be advantageous for both employer and employee.

In addition, by opting for a private exchange, an employer can reduce the administrative burdens on a company, while also maintaining the kind of employee loyalty that is associated with offering coverage.

The Employees’ Advantage Employees often gain choice on a private exchange which provides the opportunity to select a plan that best fits his or her needs and budget. Many employees find that the options provided by private exchanges spur them to be more serious and to take more time when studying their benefit options, than they had previously.

Private exchanges provide decision support not often available elsewhere. Employees also may find that private exchanges provide better customer service.

The amount an employer contributes toward an employee’s health plan is determined entirely by the employer. With a defined contribution plan, the employer gives the employee a set amount to use for health care, and the employee increases that as he or she sees fit. In some cases, a defined contribution can cover the entirety of an employee’s plan, or only a portion of the total cost.

as identity protection, may be offered.

For information about EBenefits’ private exchange platform, visit http://www. ebenefits.com/PrivateExchange.html. For information about UPMC’s affiliation with the Manufacturer & Business Association’s private marketplace, Absolute Choice, visit www.mbausa.org.

mbabizmag.com • MARCH 2016

11

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MARCH 2016 • mbabizmag.com

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LEGAL BRIEF | UPDATE

NLRB Strikes Down Anti-Recording Policy John Persinger is an associate with MacDonald, Illig, Jones & Britton LLP and a former White House staffer. He represents individuals, businesses and nonprofits in their dealings with federal, Commonwealth and local government entities.

Does your company have a policy prohibiting the recording of conversations, phone calls or company meetings?

If so, you may be violating the National Labor Relations Act (“NLRA”).

The NLRB Decision In December, the National Labor Relations Board (“NLRB”) determined that Whole Foods Market’s anti-recording policy (the “Policy”) violated its employees’ right to engage in protected activity under the NLRA. The Policy prohibited employees from recording “conversations, phone calls, images or company meetings” unless the employee received prior approval. Among other reasons, the company explained that it hosts personnel meetings where confidential matters are discussed, such as financial needs or personal situations.

Whole Foods argued that the recording of these meetings, unbeknownst to others, would have a detrimental effect.

Despite Whole Foods’ concerns, the NLRB determined that the Policy violated the NLRA. Section 7 of the NLRA provides employees with the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Section 8(a)(1) makes it an unfair labor practice “to interfere with, restrain, or coerce employees in the exercise” of their Section 7 rights.

The NLRB’s decision hinged on the employees’ interpretation of the Policy.

The NLRB found that employees would reasonably read this anti-recording rule as prohibiting the recording of activity that would be protected by Section 7.

In the NLRB’s words, the Policy would “reasonably chill” employees in the exercise of their Section 7 rights. Thus, the NLRB determined that the Policy violated Section 8(a)(1).

What is surprising about this decision is the NLRB’s opinion of “concerted activity.” The NLRB noted that the act of recording or photography is not a “solitary, nonconcerted act encompassing a ‘limited scope of protected activity.’ “ Instead, an individual recording images or sound in the workplace may be engaging in protected activity. Group activity is not necessarily required. One person’s action will be “deemed concerted if undertaken in an effort to enforce the provisions of a collective-bargaining agreement or in order to initiate or induce group action.”

Employer Takeaways The NLRB’s interpretation has significant implications in our social media-dominated world. For example, an employee could post a comment on Facebook, which is neither seen nor commented on by another person. As long as that employee intended

to induce group action, under the NLRB’s analysis, this Facebook post would be concerted activity protected by the NLRA. Unless the comment was so egregious as to lose the protection of the NLRA, the employer could not take any action against that employee for this Facebook post.

Employers must proceed cautiously when drafting and implementing antirecording policies. Protecting trade secrets and confidential discussions from being recorded is good business practice. However, as the NLRB makes clear, if an employee would interpret a policy as restricting the ability to exercise Section 7 rights, then that policy will be deemed unlawful.

One final comment is that Pennsylvania’s wiretapping statute requires a person to obtain the consent of all parties before recording a conversation. Thus, if an employee is recording any telephone conversations in the workplace and does not have the consent of everyone on that phone call, then the employee is violating the state wiretapping law.

If you need assistance in drafting or implementing an anti-recording policy, contact a member of MacDonald Illig’s Labor and Employment Practice Group at 814/870-7600.

mbabizmag.com • MARCH 2016

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BUSINESS BUZZ | FIRM PROGRESS PENN STATE BEHREND OPENS INNOVATION COMMONS Penn State Behrend’s Innovation Commons — an idea laboratory, maker space, technology playground, legal office, marketing agency and entrepreneurs’ gathering spot rolled under one roof — has opened to support small businesses and start-ups.

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A January 8 ribbon-cutting ceremony Caption???hosted by Penn State President Eric Barron and new Penn State Behrend Chancellor Ralph Ford celebrated a $50,000 Invent Penn State seed grant that supported the lab’s development.

Invent Penn State is an initiative launched last year to leverage the University’s research, knowledge and entrepreneurial spirit in order to drive job creation, economic development and student career success.

Barron has committed $30 million to putting into place across the University the organization and people to guide and support its partners along their entrepreneurial pathways: working with students to encourage ideation, then helping them to kick-start those ideas into promising new companies; collaborating with communities and corporations, making available Penn State’s intellectual resources; and partnering with alumni to mentor students, shepherd fledgling businesses and invest in promising, innovative start-ups.

Penn State Behrend’s Innovation Commons lab, which is located in the Jack Burke Research and Economic Development Center, also is part of the $1.5 million Ignite Erie job creation initiative, a partnership of Penn State Behrend, Mercyhurst University and the Erie County Gaming Revenue Authority. It will house the first of several planned “Innovation Beehives” in Erie County, where students and others can consult with business professionals — bankers, patent attorneys, marketing professionals and other experts — at no initial cost.

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MARCH 2016 • mbabizmag.com

From left: Samuel P. “Pat” Black III, chairman of Erie Management Group; Penn State’s Vice President for Research Neil Sharkey, Vice President for Commonwealth Campuses Madlyn Hanes, President Eric Barron and Behrend Chancellor Ralph Ford; Erie County Executive Kathy Dahlkemper; Perry Wood of the Erie County Gaming Revenue Authority; and, Behrend Council of Fellows Chairman Scott McCain.

DOWNLOAD YOUR FREE TIME-CHANGE POSTER It’s time to spring clocks Remember... Turn youron ahead one hour a.m. forward! Daylight2 Sunday, March 13 at Savings Time begins at 2 a.m.

Sunday, March 13.

Manufacturer & Business Association members are encouraged to download their FREE Time-Change poster from the Association’s website, www.mbausa.org, and post in a highly visible location.

with The MBA has partnered ® a new Logistics Plus to create you, Logistics Program for our members!

300 participating communities, which represent all 50 states plus the District of Columbia. Erie Arts & Culture will be working with Erie County’s nonprofit arts and culture organizations to collect detailed financial information, as well as coordinate volunteers who will help collect anonymous audience surveys at 16-20 different arts and cultural events throughout 2016.

gistics for more information.

Visit mbausa.org/lo

ERIE COUNTY PART OF NATIONAL NONPROFIT ARTS AND CULTURE STUDY Americans for the Arts, the nation’s leading nonprofit organization for advancing the arts and arts education, recently announced that more than 300 U.S. communities will be part of Arts & Economic Prosperity ® 5 (AEP5), making it the largest national study measuring the economic impact of spending by nonprofit arts and culture organizations and their audiences ever conducted. Surveys will be collected throughout calendar year 2016; results will be released in June 2017. Erie Arts & Culture, www.erieartsandculture.org, is spearheading the data collection in Erie County.

AEP5 is the fifth national study over the past 20 years to measure the impact of arts spending on local jobs, income paid to local residents, and revenue generated to local and state governments. Erie County is one of

According to AEP4, the nonprofit arts industry in Erie County generated over $18 million in economic activity and supported over 600 full-time equivalent jobs during 2010, resulting in over $1.7 million in local and state government revenues.

MALONEY TOOL & PLASTICS ADDS NEW EQUIPMENT, ANNOUNCES IMPROVEMENTS Maloney Tool & Plastics (an RHKG Holdings Inc. Company) in Meadville recently added new equipment to its plastics injection molding and its tooling operations. The addition includes two injection molding machines — one, a 110-ton Arburg E-Drive horizontal injection press, while the other is an 85ton Toshiba that is equipped with an 18 mm barrel giving it a .53 ounce shot size.

Both presses are equipped with Yushin sprue pickers and Keyence cameras for mold protection. The company also added two new E-Darts from RJG Inc. A new ERP system from IQMS has also been implemented.

The Plastics shop is an ISO 9001:2008-certified facility serving the auto, aerospace, appliance, medical and consumer electronics industries.

PEOPLE BUZZ | ENDORSED ERIE COMMUNITY FOUNDATION WELCOMES NEW BOARD TRUSTEE The Erie Community Foundation announced the appointment of Deborah W. Murphy, CFP®, senior vice president-Wealth Management with UBS Financial Services, Inc., and the senior partner of The Murphy Advisory Group, to its board of trustees.

“Deb is an excellent addition to our board because she brings a fresh perspective and a strong financial background to our grant-making decisions,” said Foundation President Michael L. Batchelor. “She will serve three-year terms, renewable to nine years, which assures continuity of input and the presence of strong civic leaders guiding our Foundation.”

The Erie Community Foundation works to improve the quality of life for all in the Erie region by evaluating and addressing community issues, building permanent charitable endowments and promoting philanthropic and community leadership.

SAINT MARY’S HOME ANNOUNCES APPOINTMENTS Saint Mary’s Home of Erie, a Continuing Care Retirement Community, recently announced three new appointments, including: Allen L. Bonace, MSN/MBA, RN, NE, BC, NHA, as vice president for Special Projects.

Bonace attended Ohio University, Athens, Ohio, and received an associate degree in nursing from Hocking College, Nelsonville, Ohio. In addition, he holds a dual Master of Science in Nursing and Master in Business Administration degree from Gannon University. Bonace is board-certified as a Nurse Executive by the American Nurses Credentialing Center. He also holds a Pennsylvania Nursing Home Administrator’s license. He previously was the director of Nursing for Saint Mary’s at Asbury Ridge.

KNOX FIRM ANNOUNCES TOMAN AS NEW SHAREHOLDER

PNC BANK NAMES NEW REGIONAL PRESIDENT

Jeremy T. Toman has been elected a shareholder of Knox McLaughlin Gornall & Sennett, P.C. in Erie.

PNC Bank recently named James F. Stevenson as regional president for northwestern Pennsylvania.

Stevenson previously was the market director for PNC Corporate Banking in the region and was to continue in that role as he assumed his new position. The Erie native succeeds Marlene Mosco, who retired after 47 years with PNC.

Toman, licensed in both Pennsylvania and New York, focuses his practice on real estate, environmental law and business law. He has represented clients in all phases of commercial and residential real estate transactions, has negotiated numerous oil and gas leases throughout Western Pennsylvania, and is a title insurance agent.

“Jim is an experienced, successful banker with deep roots in the community. His leadership will help PNC further grow our business, serve more customers and attract more talent to our team,” said Lou Cestello, executive vice president and head of PNC’s Office of Regional Presidents. “We thank Marlene, who has served PNC Bank in several capacities, including 15 years as regional president.”

Toman graduated with honors from the University of Chicago and earned his law degree from the University of Pittsburgh School of Law, where he earned a CALI Certificate in Environmental Litigation. He is included in the 2015 Pennsylvania Super Lawyers® Rising Stars List and serves as a board member for the Erie County Public Library and Hooked on Books.

A graduate of Gannon University, Stevenson joined PNC in 1989 through the management development program. He has worked as a relationship manager in both Corporate and Commercial banking.

Anthony J. Allegretto, BA, has been appointed director of Marketing and Development. He attended Penn State Erie, The Behrend College and received a bachelor’s degree in Communication and Media Studies.

He previously served as the marketing director for Saint Mary’s Home of Erie.

HBKS WEALTH ADVISORS’ PICCIRILLO EARNS NOMINATION Dean Piccirillo, financial adviser for HBKS Wealth Advisors, has been named one of three finalists for Southwest Florida’s News Press Person of the Year.

Serving clients in Erie, Pennsylvania and Fort Myers, Florida, Piccirillo is current president of the Fort Myers Chamber of Commerce and board chair of March of Dimes, Southwest Coast Division. He was named one of America’s Top 300 most influential retirement advisers in 2009.

Piccirillo, part of former Sorce Financial in Erie that merged with Hill, Barth & King in 2001, opened Fort Myers branch of HBKS Wealth Advisors in 2007.

Deborah A. Swartz, BSN, RN-BC, CDP, has been appointed director of Nursing for Saint Mary’s at Asbury Ridge. She attended Edinboro State College (now Edinboro University) and received a bachelor’s degree in social work and a bachelor’s degree in nursing from Villa Maria College. Swartz is boardcertified in gerontology by the American Nurses Credentialing Center and is a Certified Dementia Care Practitioner. She previously was a Nursing Unit supervisor for Saint Mary’s at Asbury Ridge.

mbabizmag.com • MARCH 2016

15

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ON THE HILL | SPEAKING UP

Angela Zaydon is the state government relations representative for the Manufacturer & Business Association in Harrisburg. Contact her at 717/525-7213, cell 814/460-3136 or at azaydon@mbausa.org.

Employee Rights Act is the Answer to a Workplace Revolution

Imagine trying to compete in business today using 1940s technology. You simply could not succeed.

three years to determine whether employees want to continue to be represented by any incumbent union.

Unfortunately, American businesses and employees are forced to compete in a world economy today working under labor laws that were written in 1940.

• Paycheck Protection — Labor unions will be required to obtain prior approval from employees to spend dues money on predetermined political parties, political candidates or other political advocacy.

But help is on the way for the American worker.

Senator Orrin Hatch, R-Utah, and Representative Tom Price, R-Georgia, believe that, after 76 years, it’s time to update our antiquated labor laws and have introduced the Employee Rights Act or ERA. The Employee Rights Act is a comprehensive labor reform bill that emphasizes individualism and independence over union coercion and, so far, has garnered the support of more than 100 congressional cosponsors and four presidential candidates.

The Employee Rights Act reforms labor laws by: • Secret Ballot Elections — Employees will be given the right to have a federally supervised secret ballot election when deciding whether to join a union.

• Union Recertification Elections — Every unionized workplace will have a supervised secret ballot election every

• Decertification Coercion Prevention — Unions will be penalized who coerce, discipline, or interfere with employees seeking to decertify a union.

• Secret Ballot Strike Vote — A majority of union members will need to approve a strike in a secret ballot election before union leaders can order one.

• Employee Privacy Protections — Employees will be granted the right to opt out of having their personal information shared with a union.

• Criminalized Union Threats — Unions will be forbidden from threatening or engaging in violent or criminal behavior toward an employee.

The Employee Rights Act would give employees of the United States the right to work while affirming the right of Americans to earn a living without being compelled to belong to or pay dues to a union in which they have not joined.

This legislation would not take away power from an employee to join a union or outlaw unions, but it would simply give employees the opportunity to make the decision for themselves.

Recent polling, conducted by ORC International, found more than 70 percent of both union and nonunion households support provisions of the ERA. The ERA is the answer to a workplace revolution that will grow the country’s economy, boost morale on the factory floor and stand up for employee rights across the country.

Let’s give American workers the independence they deserve and the opportunity to compete with the rest of the world on an even playing field by passing the Employee Rights Act.

See the new CEO/CFO Soundoff Blog

CURRENT TOPIC: WHY SUPPORT THE EMPLOYEE RIGHTS ACT

How can the Employee Rights Act benefit Pennsylvania employees and employers?

Read retired EBC Industries CEO Harry Brown’s comments on how, through the ERA, employees can protect their individual rights and employers can become more competitive and successful in the global marketplace. Then share your thoughts with fellow CEOs and CFOs on our exclusive, secure site at www.mbabizmag.com.

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MARCH 2016 • mbabizmag.com

HR CONNECTION | WORKPLACE TRENDS

OVEREXERTION TOPS LIST OF WORKPLACE INJURY CAUSES The most disabling, nonfatal workplace injuries cost U.S. employers nearly $62 billion in 2013, according to Liberty Mutual Research Institute for Safety’s 2016 Workplace Safety Index.

The 10 leading causes of the most disabling work-related injuries, which caused employees to miss six or more days of work, account for more than $51 billion, or 82.5 percent, of these costs, according to the index.

ACA Reporting Extensions:

Overexertion — or injuries related to lifting, pushing, pulling, holding, carrying or throwing — was again the top cause of workplace injuries, costing employers more than $15 billion in 2013, followed by falls on the same level at almost $10.2 billion and falls to a lower level at $5.4 billion, according to the index.

Rounding out the top five causes were struck by object or equipment at $5.3 billion and other exertions or bodily reactions at nearly $4.2 billion, according to the index.

INTERNAL REVENUE SERVICE ANNOUNCES NEW DEADLINES FOR EMPLOYERS

Preparing for the new Affordable Care Act (ACA) reporting requirements has been a long and complicated process, as this is the first year that employers and insurers are required to report certain information about health coverage to employees, other individuals and the Internal Revenue Service (IRS).

Recently, the IRS announced in Notice 2016-4 that employers will have two more months — until March 31 — to give individuals 2015 forms for reporting on offers of health coverage and the coverage provided.

These forms include: • 2015 Form 1095-B, Health Coverage (and the 1094-B transmittal); and,

SURVEY REVEALS UNUSUAL TEAMBUILDING ACTIVITIES

Coverage (and the 1094-C transmittal).

If filing in hard copy, the dates were extended from February 29 to May 31, 2016; and if filing electronically, the dates were extended from March 31 to June 30, 2016. The due date for providing the information statements to individuals was extended from February 1 to March 31, 2016.

Why break bread with colleagues when you can break dance? That’s what one company did for team building, according to a survey of 400 U.S. advertising and marketing executives by The Creative Group, a specialized staffing service for interactive, design and marketing professionals.

The IRS is encouraging employers and insurers to begin reporting to employees and other individuals as soon as possible.

However, in response to stakeholder feedback, this extension will provide employers and insurers a limited, additional period of time to meet these requirements, while maintaining the ACA reporting requirement for 2015.

Advertising and marketing executives were asked, “What is the wackiest or most unusual team-building activity you’ve ever participated in or heard of a company participating in?” Among the responses: • “A dance-off.”

• “We had a psychic come and do readings.”

• “Getting pedicures.”

• “Indoor skydiving and surfing.”

• “A one-week retreat in the desert.”

• “An improv class.”

• the 2015 Form 1095-C, EmployerProvided Health Insurance Offer and

“Creative teams are busier than ever, but carving out time for ‘structured play’ can boost staff morale and collaboration,” said Diane Domeyer, executive director of The Creative Group.

Patty Smith is the director of Employee Benefit Services at the Manufacturer & Business Association Contact her at 814/833-3200, 800/815-2660 or psmith@mbausa.org.

Experts say team-building activities don’t have to be elaborate to be effective. Often, a simple game or outing can do the trick.

mbabizmag.com • MARCH 2016

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HR Q&A | EMPLOYEE ANSWERS

DOES AN OFFICE ENVIRONMENT NEED TO BE CONCERNED WITH ANY OSHA REGULATIONS? Office safety is an effort to apply safety and health guidelines to the office environment in an attempt to reduce or eliminate the hazards for all employees who, during the course of their work, may be involved in a workplace accident or incident. Issues important to overall office safety, health, and wellness on the job, include ergonomics, hazard communication, slips, trips and falls, noise standards, stress, proper lifting, fire prevention, parking lot security, theft and workplace violence.

While there is no specific regulation covering office safety, there are a number of regulations which relate to it, such as 1910.1200 Hazard Communication, and 29 CFR 1910 Subpart D-Walking-Working Surfaces, among others.

All Employers Must: • Establish a training and information program for employees routinely exposed to hazardous chemicals in the workplace.

• Ensure that a sufficient number of persons are trained to assist in the safe and orderly evacuation of the workplace in the event of emergency. These persons must also be able to account for or otherwise verify that all employees are in safe areas.

Return-to-Work Programs: EFFECTIVE STRATEGIES CAN REDUCE COSTS, IMPROVE PRODUCTIVITY Your company’s medically restricted return-to-work (RTW) program is a key component in the case management of work-related injuries or illnesses, and some long-standing statistics support this as fact. The Bureau of Labor Statistics (BLS) reports that the longer an injured/ill employee is off work, the chances of the employee ever returning to work decreases dramatically.

According to BLS, if an employee is off work for six months due to a work-related injury/illness, there is only a 50-percent chance the employee will ever return to work. If an employee is off for one year, there is only a 25-percent chance of the employee returning to work. If an employee is off for two years, there is virtually no chance of the employee ever returning to work.

IF I OBTAIN EMPLOYEES FROM A TEMPORARY HELP SERVICE, EMPLOYEE LEASING SERVICE OR PERSONNEL SUPPLY SERVICE, DO I HAVE TO RECORD AN INJURY OR ILLNESS OCCURRING TO ONE OF THOSE EMPLOYEES ON THE OSHA 300 LOG?

Effective RTW programs seek to bring employees back to work after an absence

You must record these injuries and illnesses if you supervise these employees on a day-today basis.

across an organization, they can save organizations time and money and they

HOW DO I COUNT WEEKENDS, HOLIDAYS OR OTHER DAYS THE EMPLOYEE WOULD NOT HAVE WORKED ANYWAY ON THE OSHA 300 LOG? You must count the number of calendar days the employee was unable to work as a result of the injury or illness, regardless of whether the employee was scheduled to work on those day(s). Weekend days, holidays, vacation days or other days off are included in the total number of days recorded if the employee would not have been able to work on those days because of a work-related injury or illness.

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MARCH 2016 • mbabizmag.com

due to an injury or illness that physically restricts the worker. When injured or ill employees are off work for an extended period of time, they often develop a set of common problems other than the injury or illness itself such as progressive loss of self-esteem and depression, fear of re-injury and of a delayed recovery.

Return-to-work strategies and programs can reduce workers’ compensation costs; however, they can do much more — they can improve productivity and morale can protect agencies from loss of talent. Examples of effective return-to-work strategies include offering the opportunity to work part time, telecommuting, modifying work duties, modifying schedules, and implementing reasonable accommodations to provide employees with the tools and resources they need to carry out their responsibilities.

Stacey Bruce is the director of HR Services at the Manufacturer & Business Association.

Contact her at 814/833-3200, 800/815-2660 or sbruce@mbausa.org.

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