Chicago Business Lawyer Blog

A Chicago catering company has been shut down by federal inspectors in the wake of claims that the company did not properly protect food from contamination.

Our Chicago small business attorneys know how devastating this can be to a restaurant or food-service business. To be shut down any time of year threatens a company's survival. But to be shut down at the holidays may very well force a catering company out of business. To say nothing of the damage to reputation that food-contamination allegations present.

Triple A Services, a South Throop Street caterer, agreed to take a number of food-safety measures, including the hiring of food sanitation of food processing experts, before reopening, according to the Chicago Tribune. The lawsuit filed on behalf of the U.S. Food and Drug Administration found violations during inspections in July and August of this year. The company operates a 46,0000 square foot Chicago facility with a 24-hour kitchen and bakery. It provides catering and office coffee and bottled water services.

Complying with environmental, health and safety regulations is critical to the health and viability of any business enterprise. As this case illustrates, consulting an attorney and putting plans in place to ensure compliance is often much easier, and much less expensive, than dealing with the fallout from citations and other non-compliance issues.

The lawsuit alleges bacteria was found at the facility as far back as 2001. The government's reaching into the past as part of the lawsuit illustrates why a legal defense is always required, even when a business or facility believes a common citation is the extent of the consequences. On the surface, this lawsuit also alleges relatively routine complaints, including a lack of a written plan for dealing with seafood, pest control issues, failure to fix a leaking water issue and employee cleanliness issues. These are all problems common within the restaurant industry. A thorough review of this case may also reveal that the company could have easily prevented the case from escalating by either defending itself or resolving a few simple issues.

Instead it has a public relations issue and is facing fines of $2,500 a day if it fails to comply with a consent decree. Forced closure will likely cost it thousands more. Remaining proactive from the start, and having a thorough understanding of your rights, can literally save your business when dealing with local, state or federal regulators.

Other common issues involving Environmental, Health and Safety regulations include:

-Regulations involving the Occupations Safety and Health Administration: Issues related to employment regulations and work safety.

-Regulations involving the Environmental Protection Agency: Administrative and court defense of alleged violations.

-Regulatory compliance and affairs: Clean Air Act, Resource Conservation and Recovery Act, Toxic Substance Control Act, Clean Water Act.

-Due diligence and risk management: Environmental site assessments and compliance audits.

-Remedial actions and Brownfield projects: Cleanup options and obligations.

-Governmental inspections and proceedings: Defense and administrative resolutions.

Continue reading "Health & Safety Regulatory Compliance Critical For Chicago Small Businesses" »

I was talking to a businessman the other day about an investment he was considering. He is looking at one of those self storage facilities. It seems like an attractive opportunity at the right price. It's fully leased with many longtime tenants for its almost 200 units. It appears to be a relatively simple and stable business model, with relatively few workers, utilities or expenses. The purchaser gets not only the operation but the real estate as well. This seems promising and no red flags jumped out.

However, even though I try to be very practical about risks and expenses, I encouraged him to be very thorough and consider zoning, geotechnical and environmental assessments. Why? Because when you're entering into a merger or acquisition or loan or similar transaction you have to worry about more than your own worries. You have to consider what the next investor, purchaser or lender is going to think or do. In other words, you don't want to get stuck with the hot potato or left standing when the music stops.

For example, I have had a long-time specialty in managing environmental risks and matters for mergers, acquisitions, divestitures and financings. It's clear that when the deal centers around factories, refineries, mines and the like no one is going to question doing extensive due diligence about the potential for chemical contamination to present material hidden or contingent liabilities. But, with less alarming properties and businesses there's often an understandable tendency to want to avoid the expense of environmental studies or tests. Still, if there's a decent chance that these issues will come up down the road anyway, then it is far better to bite the bullet and deal with it upfront, rather than have an issue be unearthed when you're now stuck with problem.

Once I was involved in litigation that arose when the purchaser of a sand and gravel pit later discovered that a previous owner had his trucks collect waste drums on their return trips and then bury them in a corner of the property. This eventually resulted in a multi-million dollar remediation. There's no guarantee that standard environmental investigations would have diagnosed this condition, but it would have been preferable to have made the attempt. And, this can apply to other aspects of a business that can present time bombs, including potential employment, product liability, regulatory compliance and contractual obligation risks.

So, if you are considering investing in new business or property, remember that it's important to worry about the concerns of the other guy, in addition to your own, to avoid getting stuck in the middle.

The Chicago business attorneys of Jeremy A. Gibson & Associates, P.C. are experienced in mergers & acquistions and other due diligence scenarios and are available to meet you in our Chicago, Deerfield and other satellite offices.

As Toyota's president prepares to testify before Congressional committees tomorrow, it is a good time to consider some basic principles when businesses learn of possible defects, safety risks or violations of law. The Toyota vehicle acceleration recalls and similar reports present a good case study. Apart from the underlying vehicle design, performance and correction issues, Toyota now faces even more attention, not to mention potential sanctions, over its handling of and response to the situation.

For example, the automaker has received subpoenas from several federal agencies that will review its approach. And, an internal presentation touting a Toyota's team success in minimizing corrective measures required by NHTSA and realizing huge costs savings has come to light, raising questions about priorities in the response. So, this story quite possibly will turn into another installment of: "what did they know and when did they know it" or "was the cover up worse than the crime?"

It may well turn out that Toyota has acted completely appropriately in responding to defect and safety concerns. Just like UFO sightings, it's not as if every consumer complaint has merit. And, it is reasonable to respond in a measure fashion when it is not clear exactly what is going on.

In any case, my experience with scores of regulatory, health and safety matters has led to a few basic starting guidelines. The old saying "safety first" still rings true. Take the initiative with potential problems and regulators and be proactive. And, do not put anything in writing in an unprivileged setting that you do not want to see on the front pages next month or next year.

In essence, although there always is an imperative to avoid unneeded expenditures, usually it is better to deal with potential safety problems as quickly and effectively as possible. In addition to putting human welfare over the bottom line, it's a basic quality matter and brand management. These problems usually only get worse and more expensive to address over time. Dealing with them upfront sends strong, positive messages to all constituencies: customers, employers, suppliers and regulators. In the long run, taking short cuts leads to illusory savings.

All that said, it is not always easy to decide what the right course of action is and it is important to have full and frank discussions when there is a crisis or potentially damaging or expensive problem. The purpose of the attorney-client privileges is to promote those types of internal conversations and reviews, by shielding certain (even potentially embarrassing) communications with counsel from disclosure. But, when a privilege is not applicable, and even when they are keep safety first in mind, executives and managers always should ask themselves whether they would want that PowerPoint slide, memo or email to be presented in a courtroom before sending it around.

Our Chicago and Illinois business lawyers are experienced in regulatory and risk management matters and would be happy to discuss this topic in further detail.