BLUE OCEAN STRATEGY TRAINING
Module 1 – Unlocking the Power of Blue Ocean Strategy This one-day Blue Ocean Strategy (BOS) Workshop provides participants with a basic introduction to the concepts, tools and methodologies behind blue ocean strategy/value innovation. This session provides participants with the building blocks to understand blue ocean strategy and it will likely provide them with a mindset change about how they view their competitive landscape. The workshop is intended as an introduction, not an attempt to create concrete blue ocean ideas. Participants will learn:
•
•
The strategic logic of blue ocean strategy o What are the underlying principles? o How does the blue ocean strategy methodology unlock creativity? o How do I know if it is right for my organization? The “tool box” behind reconstruction of market boundaries o What are the analytical tools and frameworks behind BOS? o How does the “four-step” process maximize opportunities while minimizing risks? o What is the context and relationship between each of the tools and the steps in the process?
Agenda:
• •
• • •
Introduction Overview Concepts o Value innovation o Tipping point leadership o Fair process Methodology o Four-step process Tools o All tools Summary with case study
Prerequisite:
•
Participants must have read Blue Ocean Strategy book
For more information, visit our Web site at www.mbausa.org or call Angie Angus at 866/293-4194. Date:
TUESDAY, SEPTEMBER 14, 2010
Location:
Manufacturer & Business Association Conference Center 2171 West 38th Street at Pittsburgh Avenue
Time:
8 a.m. – 5 p.m. (Includes continental breakfast, lunch and beverages.)
Cost:
$325 member, $650 nonmember
Cancellation/Rescheduling Policy: Two weeks or more notice: Full refund or may reschedule Less than two weeks notice: No refund and $50 fee to reschedule Registration Form
Blue Ocean Strategy Training – Module 1
Name:
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Online: www.mbausa.org Fax: 814/833-4844 Phone: 814/833-3200 800/815-2660 Mail: 2171 West 38th Street Erie, Pa. 16508
BUSINESS M A G A Z I N E Manufacturer & Business Association
VOLUME XXIII, NUMBER 9
SEPTEMBER 2010
An Abundance of Energy:
Steptoe & Johnson and the Marcellus Shale Legal powerhouses join forces to expand oil and gas practice / Page 12
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12
September 2010
Blue Ocean Strategy Center
EDITORIAL > 7 / Health Matters Why more employers are looking to onsite clinics for their employees’ health care. DAVID M. WEIR
9 / Legal Brief
A closer look at employees’ fiduciary duty. W. PATRICK DELANEY
11 / Financial Adviser
Examining the attorney and accountant partnership and its role in client success. MICHAEL S. NEUBAUER, CPA, CVA, MBA
15 / In the Bank What to consider before you convert your traditional IRA to a Roth IRA. MATTHEW R. LOEFFLER, CPA, CFP®, CTFA, CMA
19 / Blue Ocean Strategy Why noncustomers can be your biggest resource for blue ocean opportunities. ANGIE ANGUS
FEATURES > 3 / Spotlight
Dr. Ralph Ford, director of the School of Engineering at Penn State Erie, The Behrend College, discusses the significance of hosting the American Society of Mechanical Engineers’ Manufacturing Science and Engineering Conference on October 12-15 at Erie’s Bayfront Convention Center.
3
12 / Steptoe & Johnson Attorneys Sharon Flanery and Russell Schetroma explain why, beginning this month, the energy practice group of Culbertson, Weiss, Schetroma and Schug, P.C. in Meadville, Pennsylvania, has affiliated with “Top 250 Firm” Steptoe & Johnson PLLC, intensifying the firm’s business, real estate, and oil and gas law experience throughout the region.
23 / On the Hill Anna McCauslin of the Association’s Government Affairs Department explains the importance of right-to-work legislation in Pennsylvania.
29
ES S BMUA SG IN A Z I N E Manufacturer & Business Associat
ion
VOLUME XXIII, NUMBER 9
SEPTEMBE R 2010
EVENTS > 29 / Golf Classic Tour
See exclusive photos from the Association’s 12th annual Golf Classic Tour at Whispering Woods in Erie, which benefits three area education programs including Pennsylvania Business Week, The Patrick R. Locco Scholarship Awards and The John P. Tramontano Jr. Education Fund.
DEPARTMENTS > 4 / Business Buzz 5 / The Network
16 / HR Connection 20 / Legal Q&A 28 / People Buzz
An Abundance of Energy: s Shale
22
Steptoe & Johnson and the Marcellu Legal powerhouses join forces to expand oil and gas practice / Page 12
Register now to receive the FREE digital edition of the Business Magazine online at www.mbausa.org! September 2010 > www.mbausa.org > 1
Strength In Numbers
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SPOTLIGHT > by Karen Torres For the first time in its history, the School of Engineering at Penn State Erie, The Behrend College, will host the American Society of Mechanical Engineers’ Manufacturing Science and Engineering Conference (ASME/MSEC), scheduled for October 12-15 at the Bayfront Convention Center in Erie. In anticipation of the event, the Business Magazine recently sat down with Dr. Ralph Ford, director of the School of Engineering, to discuss the significance of bringing this conference to northwest Pennsylvania and how it can benefit manufacturers in the region.
What is ASME/MSEC and how important is it to the manufacturing industry? MSEC is the leading manufacturing research conference in the nation, featuring the industry’s latest research and trends through technical paper presentations, panel discussions, keynote talks and poster displays. The 2010 conference will include 20 technical symposia plus industry panel discussions. Engineers and scientists from Cummins, GE, Komatsu, LORD, General Motors, and the National Institute of Science and Technology are among those scheduled to attend. Typically, ASME/MSEC is held in major metropolitan areas under the sponsorship of larger educational institutions. Why was Penn State Behrend selected to host this event? Penn State Behrend is part of a major research university, and members of our engineering faculty are actively engaged in research in the manufacturing field, exploring topics such as energy reduction in manufacturing processes, new techniques for laser and stir-friction welding, and electrically assisted manufacturing, which is an area of research that Penn State Behrend pioneered.
VOL. X XIV, NO. 9 SEPTEMBER 2010 Manufacturer & Business Association Board of Governors
Editor in Chief
Executive Editor
Managing Editor & Senior Writer Contributing Writers
Dr. John Roth, assistant school director and associate professor of mechanical engineering, is this year’s conference organizer. Another factor in our being chosen as this year’s host is northwestern Pennsylvania’s strong manufacturing base, which allows us to involve local industry in the conference. Individuals from area companies will participate in the panel discussions, and tours of plants in the region are being incorporated into the conference agenda. Who is the conference designed for and how many participants are expected to attend? Between 300 and 400 manufacturing researchers, practicing engineers, scientists, educators, and students from more than 20 countries are expected to attend MSEC 2010. The technical symposia will focus on the latest manufacturing research and its applications. Practicing professionals will find the panel presentations valuable, as industry experts — many from within the region — discuss their manufacturing challenges. What are some of the key topics that will be discussed during the conference? The theme of the conference is manufacturing as it relates to transportation — air, automotive, rail, and heavy equipment. Industry panels will focus on energy reduction in transportation, next-generation composites, the commercialization of innovation, and advances in the electrification of vehicles. Symposia topics include nano-materials, material forming, green energy, and bio-manufacturing. Onsite tours are scheduled at Eriez and HERO BX in Erie and at Cummins in Jamestown, New York. Dave Grzelak, chairman and CEO of Komatsu America Corp., one of the world’s foremost construction and mining equipment manufacturers, will be this year’s keynote speaker. Could you please tell us more about Mr. Grzelak’s background and what he plans to focus on in his address? We are elated to have Dave Grzelak as the keynote speaker. When we asked Dave to participate, he was enthusiastic about the opportunity to return to Erie and address this conference. An Erie native with strong ties to the region, he is a graduate of Penn State and Gannon and started his career at GE Transportation. Dave currently oversees Komatsu’s U.S. operations for construction, utility, and mining truck products worldwide. These operations have grown substantially under his leadership. He will discuss that growth as well as the future challenges he sees for the industry. How can attending this conference benefit manufacturers in our area? This conference will benefit manufacturers in a number of ways. Industry leaders will highlight the latest trends and challenges in manufacturing. In addition, researchers will discuss the newest technical advances, presenting new ideas and technologies that manufacturers may be able incorporate into their operations. Finally, the conference is organized to encourage networking — and lots of it — through both professional and social interactions. What is the cost for attending, where do you register and how do our readers find out more about the conference and sponsorship opportunities? Full registrations are $625 for members; one-day registrations are $375. These rates are valid until September 12. Visit www.behrend.psu.edu/engineering/MSEC2010 for more information or to register.
Cover Photography Additional Photography
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Yvonne Atkinson-Mishrell John Cline Dale Deist Timothy Hunter Dan Ignasiak Mark C. Kulyk John B. Pellegrino Sr., P.E. Dennis Prischak Robert S. Pursell Lorenzo Simonelli Sue Sutto Philip Tredway Ralph Pontillo rpontillo@mbausa.org John Krahe jkrahe@mbausa.org Karen Torres ktorres@mbausa.org Angie Angus Jessica Crocker Kathryn E. Brown W. Patrick Delaney Matthew R. Loeffler, CPA, CFP®, CTFA, CMA Michael S. Neubauer, CPA, CVA, MBA David M. Weir Courtesy of Steptoe & Johnson PLLC Courtesy of Steptoe & Johnson PLLC Karen Torres Lori Maus Joint 814/833-3200 or 800/815-2660 ljoint@mbausa.org Printing Concepts Inc. printcon@erie.net
ON THE COVER: Attorneys Russell Schetroma of Culbertson, Weiss, Schetroma and Schug, P.C. and Sharon Flanery of Steptoe & Johnson PLLC have partnered to create one of the largest, most experienced energy legal teams in Pennsylvania. For story, see Page 12. 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 2010 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.
September 2010 > www.mbausa.org > 3
Business Buzz PARTNERSHIP ENHANCES HOME HEALTH AND HOSPICE SERVICES A new hospital-based partnership will expand and enhance home health and hospice services in northwest Pennsylvania. The newly formed Regional Home Health & Hospice is a joint venture between Saint Vincent Health System, Corry Memorial Hospital and Millcreek Community Hospital. The partnership, in development for nearly two years, combines the expertise of Corry Memorial Hospital Home Health and Corry Regional Hospice with Erie Home Health, which has been owned and operated jointly by Saint Vincent Health System, Millcreek Community Hospital, Corry Memorial Hospital and Vantage Healthcare Network. Home health service coordination
for Regional Home Health & Hospice will be organized through the Erie office at 3526 Peach Street, and hospice services will be organized through the Corry office at 13675 Route 6.
Millcreek Community Hospital CEO and President Mary Eckert, Corry Memorial Hospital CEO Barbara Nichols, and Saint Vincent Health Center CEO and President Angela Bontempo, announce a new partnership, Regional Home Health & Hospice, during a news conference at Saint Vincent.
ERIE-BASED VELOCITY EXPANDS NETWORK Erie-based Velocity Network, Inc. recently completed a multimillion-dollar asset purchase of nearly 100 miles of fiber optic networking throughout Erie County. Velocity is expanding the network so all area businesses, health-care providers, educational institutions and municipalities can benefit from customized, affordable, and locally supported fiber optic-based solutions. The fiber assets, formerly owned by Houston, Texas infrastructure contractor Quanta Services, have been actively managed and maintained by Velocity since May 2008. For more information, visit www.velocitynetwork.net. EPM EARNS CERTIFICATION AS WOMEN’S BUSINESS ENTERPRISE Erie-based EPM Corporation recently received national certification as a Women’s Business Enterprise by the Women’s
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The Network
DEPARTMENTS > Contact: Jessica Crocker
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Health Matters
EDITORIAL > by David M. Weir
More Employers Looking to Onsite Clinics for Employees’ Health Care The idea of having onsite clinics at places of employment is hardly a new one. The concept has been around for decades and conjures images of larger companies, such as manufacturing plants, which operated clinics where injured employees could visit a physician who was employed by the company. The focus was primarily on occupational health. While those sorts of onsite clinics still exist, a more accurate picture shows an evolving system of health-care delivery that places greater emphasis on wellness and prevention, rather than just treatment of injuries. Throughout its history, the aim of onsite clinics has remained the same – to make quality care convenient and accessible to employees without them having to leave their workplace. What’s Driving the Growth in Popularity of Onsite Clinics? The reason onsite clinics are becoming more popular with employers is because employees see the advantages of having healthcare services in the workplace. The Advantages: t *ODSFBTFE XPSLQMBDF productivity t 5PUBM IFBMUI NBOBHFNFOU t -PXFS IFBMUI DBSF DPTUT t *U NBLFT TFOTF )FBMUIZ employees are more productive; more productive employees drive stronger organizational performance The rise in popularity of onsite clinics also reflects the rise in
health-care costs over the years. According to a national survey in 2009, more than one-fourth of large employers offer either an onsite or near-site medical clinic for occupational health services. Eleven percent of large employers offer a clinic for primary care services. A Resource for Employees’ Health Needs When done correctly, onsite clinics provide quality care that is convenient and accessible to employees without making them have to leave the workplace. An onsite clinic can be a one-stop resource for a company’s healthcare needs. For instance, it could be a place where an employee can learn about his or her employee health benefits. Services at an Onsite Clinic: t 0DDVQBUJPOBM BOE OPO occupational medical care t &NQMPZFF IFBMUI QSPHSBNT t $ISPOJD DBSF NBOBHFNFOU
An onsite clinic can serve as a tool that employers use to encourage employees to receive timely and appropriate care while promoting wellness and healthy lifestyles. Onsite clinics need to be tailored to meet the health-care requirements of a company. Options for Employers for Onsite Clinics 1. An onsite clinic may be outsourced. A third party can be hired to oversee the entire operation. Because a healthcare operation is far removed from the work of the company, this is often considered the easiest option for an employer. 2. An employer could contract directly with outside healthcare professionals and staff to manage the facility. 3. An employer could place health-care professionals on the company payroll. For more information about onsite clinics, visit upmchealthplan.com.
t 8FMMOFTT QSPHSBNT t &NQMPZFF BTTJTUBODF QSPHSBNT Onsite Clinics Provide Preventative Medicine Because onsite clinics are convenient, it increases the likelihood of an employee seeing a healthcare provider for his or her medical needs. That means minor illnesses are more likely to be looked at, which decreases the chance it would grow into something more serious. Ideally, that means that an employer’s expenses for things such as emergency room visits will decline.
David M. Weir is president of UPMC Work Partners, which is part of the integrated partner companies of the UPMC Insurance Services Division – which also includes UPMC Health Plan, LifeSolutions, UPMC for You (Medical Assistance), and EBenefits – and which offer a full range of insurance programs and products.
September 2010 > www.mbausa.org > 7
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Legal Brief
EDITORIAL > by W. Patrick Delaney
The Employee as Fiduciary In our last article, we wrote about examples of fiduciary duties arising in not-so-obvious scenarios. The article included reference to at least one case in which an employee was found to have violated his fiduciary obligation to his employer by taking a kickback. Several readers expressed surprise at the proposition that the law perceives that an employee may owe a duty of loyalty to the employer. Perhaps this reaction arises from the fact that there are so many governmental regulations concerning employees that the relationship between worker and employer sometimes seems adversarial. Regardless of this point, the law generally views corporate employees as agents and, as such, they owe a fiduciary duty to the corporation. A frequently cited case demonstrating the rule of employee loyalty is Beatty v. Guggenheim Exploration Company, 223 N.Y. 294, 119 N.E. 575 (1918). In 1905, Guggenheim employed a mining engineer by the name of Beatty. Guggenheim sent Beatty to Alaska to investigate mining properties on which Guggenheim held an option to purchase. While on the assignment, Beatty entered into a complicated transaction in which he acquired, for his own benefit, an interest in other mining properties adjacent to the ones on which Guggenheim had an option. In fact, owning the properties in which Beatty acquired an interest would have enhanced Guggenheim’s mining of the properties it had under option. On Beatty’s recommendation, Guggenheim ultimately acquired the properties it had under option. Guggenheim then learned that Beatty had acquired the adjacent properties for his own account. Ultimately, Beatty was forced to surrender his interests in the surrounding properties to his
employer at cost. This is the same type of remedy that would be imposed on any other type of fiduciary (trustee, partner or corporate officer). The New York Court of Appeals, in deciding the case, stated succinctly:
business activities in which he received a secret profit, he must account to Automotive for the amounts he illegally received.
An agent is held to the utmost good faith in this dealings with his principal; if he acts adversely to his employer in any part of the transaction or omits to disclose any interest which would naturally influence his employer’s conduct in dealing with the subject of employment, it is such a fraud upon his employer as forfeits any right to compensation for his services. Beatty, 223 N.Y. at 304.
Thus, it is clear that employees have a duty of loyalty and if they act adversely to the employer, they breach their fiduciary duty. It should be noted, however, that employment relationships can be structured in a variety of ways. An employer may agree to engage a worker, but still allow the worker to conduct business on his or her own behalf. This expansion of the employee’s rights necessarily restricts the fiduciary duties that the employee would owe to the employer. However, the fundamental point is that, unless otherwise altered, the relationship of employer and employee involves an agency and the fundamental fiduciary responsibility of loyalty to the employer.
Likewise, in General Automotive Mfg. Co. v. Singer, 19 Wis.2d 528, 120 N.W. 2d 659 (1963) the plaintiff was engaged in machine shop operations and had about five employees. The defendant, Mr. Singer, was hired as an employee by General Automotive because of his well-known skills in machining difficult parts. However, during the course of his employment, Mr. Singer diverted certain customer orders to competitors of General Automotive and took a fee from these competitors. Once Singer’s scheme was discovered, the courts took little time to impose a remedy in favor of General Automotive. The Wisconsin Supreme Court noted: In this capacity he [Singer] was Automotive’s agent and owed a fiduciary duty to it. … Under his fiduciary duty to Automotive, Singer was bound to the exercise of the utmost good faith and loyalty so that he did not act adversely to the interests of Automotive by serving or acquiring any private interests of his own. … If Singer violated his duty to Automotive by engaging in certain
General Automotive, 19 Wis.2d at 533.
For more information on fiduciary responsibility, contact W. Patrick Delaney at MacDonald, Illig, Jones and Britton LLP at 814/870-7658 or pdelaney@mijb.com. W. Patrick Delaney is a partner in the law firm of MacDonald, Illig, Jones and Britton LLP, where he is chairman of the firm’s Commercial Litigation Group. He is a 1976 graduate of Capital University Law School. His practice focuses on issues of business litigation in the state and federal courts throughout western Pennsylvania.
September 2010 > www.mbausa.org > 9
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EDITORIAL > by Michael S. Neubauer, CPA, CVA, MBA
Financial Adviser
The Attorney and Accountant Partnership: Teaming Up for Client Success The accounting and legal professions often join forces in order to provide the best service possible to their clients. Due to the increasing complexity of financial issues in some legal cases, a certified public accountant (CPA) is often brought in to serve as an expert. It is teamwork such as this that serves to divide the tasks and multiply the successes. Following are some example engagements in which attorneys and CPAs team up for the benefit of the client. Family Law Two primary financial objectives of a divorce include determining which spouse should pay spousal and/or child support and the allocation of marital assets and liabilities in order to achieve an equitable distribution between the two parties. A CPA is often engaged in order to help achieve these financial objectives. Frequently, a CPA will prepare a Schedule of Assets, Liabilities, and Net Worth to assist in the distribution of the marital property. Additionally, a CPA who has been credentialed as a valuation professional can perform a valuation of business interests that are considered assets of the marital estate. The rules in this area are dependent on state law. In Pennsylvania, the fair market value definition is determined under IRS Revenue Ruling 59-60 in the valuation of business interests. In complicated cases, a CPA may be brought in to perform a forensic examination of assets and liabilities of one of the spouses or a closely held business of one or the other of the spouses. These examinations are conducted in an effort to determine if assets or the related income stream have been diverted from the marital estate. Troubled Businesses and Bankruptcy The CPA is often a part of the team in
a Chapter 11 bankruptcy proceeding. Working with the attorney, the CPA helps in identifying all assets, liabilities and other operational issues of the bankruptcy estate or troubled business. Further, the CPA can assist in required financial reporting utilized by the Bankruptcy Court, the U.S. Trustee and other interested parties. Additionally, a CPA/valuation professional can provide valuation services with regard to adequate protection, secured claim status and rights, recovery actions such as preference payments and fraudulent transfers, as well as a determination of value in conjunction with the best interest of creditors. Lost-Profits Analysis CPAs are typically engaged to serve as experts in cases of lost profits due to their business and analytical backgrounds. An entity suffers damages from lost profits when actions of the defendant cause revenues to be lower than they otherwise would have been and/or expenses to be higher than they would otherwise have been. A CPA is hired to either prepare (for the plaintiff) or challenge (for the defendant) a lostprofits analysis. A lost-profits analysis involves the estimation of lost profits and discounting and/or future value determination of these profits to the appropriate point in time. Dissenting Shareholder Actions A CPA/valuation professional will often be brought in for cases dealing with a dissenting shareholder action. These cases center on a minority shareholder who does not agree with decisions being made by the majority shareholder (known as a “triggering event”) and feels that these decisions are not consistent with the controlling law. In what is commonly referred to as an appraisal remedy, the dissenting shareholder may elect to dissent and force the company to purchase their
stock at fair value. The requirements for a triggering event, as well as an election to dissent, vary by state. The CPA/valuation professional is brought in to determine fair value. This is based on the fair value definition in the respective state and applied to the shares at the time of the triggering event. Other Areas of Collaboration Some other areas of law that consider forensic, income analysis, accounting and/or valuation services provided by the accounting profession include: t .FSHFS "DRVJTJUJPO t 4VDDFTTJPO 1MBOOJOH BOE 8FBMUI Transfer to the Next Generation t 8SPOHGVM %FBUI 1FSTPOBM *OKVSZ Economic Damage Claims If you would like more information or would like to discuss in more detail any of the areas mentioned in this article, please contact Michael Neubauer at McGill, Power, Bell & Associates, LLP at 814/453-6594 or mneubauer@mpbcpa.com.
Michael S. Neubauer, CPA, CVA, MBA, is a manager in the Erie office of the certified public accounting firm of McGill, Power, Bell & Associates, LLP. He specializes in business valuation and has extensive experience in the manufacturing sector. Neubauer serves as president for the Erie Chapter of the Pennsylvania Institute of Certified Public Accountants (PICPA), the treasurer of the Presque Isle Partnership, and recently was named one of the PICPA’s 40 under 40 members to watch.
September 2010 > www.mbausa.org > 11
Attorneys Russell L. Schetroma and Sharon O. Flanery have joined forces to lead Steptoe & Johnson’s energy group practice.
An Abundance of Energy: Steptoe & Johnson and The Marcellus Shale Legal powerhouses join forces to expand oil and gas practice Dubbed “the hottest news of the natural gas industry,� the Marcellus formation is a surprisingly unconventional super field of shale that lies thousands of feet below the surface in the areas of Ohio, Pennsylvania, New York and West Virginia. The latest research conducted on the Marcellus shale reveals that an estimated 500 trillion cubic feet of natural gas is trapped within this organic-rich rock. What is not surprising is how the region will benefit from such discoveries, as Marcellus’ projected $2 trillion economic impact could support a wide range of business development efforts for decades to come. Standing at the entrance of the Marcellus shale is Steptoe & Johnson, a law firm recognized nationally as a natural resource dynamo registering a century of experience in the Appalachian energy industry.
Power Generation
In the early 1900s, Philip P. Steptoe and Louis A. Johnson established the Steptoe & Johnson law firm in Clarksburg, West Virginia. Due to its centralized location and variety of manufacturing, banking, mineral and service-related industries, Clarksburg proved to be an ideal base of operations and Steptoe & Johnson became prominent in banking, insurance, litigation, mineral, and public utility law. Today, recognized by The National Law Journal as a “Top 250 Firm,� Steptoe & Johnson continues to serve clients as a regional business-focused firm with particular strengths in energy, labor, employment and litigation, supported by nearly 200 lawyers in nine offices throughout West Virginia, Ohio, Kentucky, and most recently, Pennsylvania. Steptoe & Johnson has expanded its regional presence and increased its capacity to provide service to the energy industry by acquiring one of western Pennsylvania’s foremost energy law firms. Beginning this September, the energy practice group of the firm of Culbertson, Weiss, Schetroma and Schug, P.C., has affiliated with Steptoe & Johnson, intensifying the firm’s business, real estate, and oil and gas law experience. Six of the affiliating attorneys joined the firm — David Hotchkiss, Glenn A.W. Thompson, Alan Shaddinger, Brian Pulito, Nathaniel Holland, and Russell L. Schetroma, a respected attorney in Pennsylvania energy law, most notably associated with legal and regulatory issues related to the Marcellus shale. The attorneys and paraprofessional staff in Steptoe & Johnson’s new office in Meadville, Pennsylvania, assist clients with permitting, title evaluation, document review 12 < www.mbausa.org < September 2010
and creation, due diligence reviews, acquisitions and transactions, litigation, mediation and arbitration, land use challenges, FERC (Federal Energy Regulatory Commission) regulatory matters, and midstream legal issues. A second office in Southpointe (Canonsburg), Pennsylvania will open later this fall. With the acquisition of Culbertson, Weiss, Schetroma and Schug’s energy practice group, the rapidly growing Steptoe & Johnson Energy Team now fields a combined total of 190 attorneys and paraprofessionals who provide legal services to Appalachian energy industry clients throughout the nation. The firm’s army of energy practitioners focuses on oil and gas, coal, and renewables and regularly guides clients through public utility law issues.
“Between the two firms, we’ve represented many of the largest, most experienced oil and gas companies in the country.� – Sharon O. Flanery, Energy Team Chair Steptoe & Johnson’s energy group assists clients in competitive wholesale and retail markets to develop, operate, finance, sell, or acquire energy assets to meet their energy needs. Firm attorneys have worked in government, assisted in structuring and implementing the regulations governing competitive markets, and worked as in-house counsel for energy companies. Attorneys routinely help clients overcome challenges to major national energy initiatives and are highly skilled in transactions, regulatory work, litigation, and the environmental aspects of energy law.
Steptoe & Johnson’s Energy Practice: t .BOBHFNFOU PG NBKPS UJUMF BOE BTTFU EFWFMPQNFOU QSPKFDUT JODMVEJOH UIF production of more than 5,000 title opinions per year t 5SBOTBDUJPOT JO BHHSFHBUF PG NPSF UIBO CJMMJPO PO QMVT XFMMT BOE hundreds of thousands of acres of rights in the Appalachian Basin (more than 150,000 acres of Marcellus rights alone) t 1SFQBSFE DPNQMFY FYQMPSBUJPO BHSFFNFOUT KPJOU PQFSBUJOH BHSFFNFOUT HBT balancing agreements, gas marketing agreements, and other documents among multiple parties to establish areas of mutual interest and other drilling program arrangements across Appalachia, including issues associated with pooling and Marcellus drilling units with multiple wells on the same pad
“With the individual capabilities of our lawyers and the combined size of our blended energy teams,� notes Susan S. Brewer, chief executive officer of Steptoe & Johnson, “we are clearly competitive with any national law firm.�
Pipeline of Talent
Considered an influential authority on oil and gas transactions for more than 30 years, Russell L. Schetroma and his partners are a valuable addition to the Steptoe & Johnson team. Schetroma received his Juris Doctor cum laude from the Dickinson School of -BX BOE JO XBT BXBSEFE UIF +PIO - .D$MBVHIFSUZ "XBSE for his services to the Energy and Mineral Law Foundation. He also chairs the Land Title Standards Committee and is the past president of the Crawford County Bar Association. Schetroma says he decided to start alliance discussions with Steptoe & Johnson in late 2009, because of the firm’s reputation and proven track record in the oil and gas industry, and is excited about the prospects of this most important acquisition. He describes the new partnership as a powerful resource for clients, many of whom include drilling companies headquartered outside Pennsylvania, who are navigating the challenging legal hurdles and complex Steptoe & Johnson PLLC’s regional footprint surrounds Marcellus from Pennsylvania to Kentucky, energy laws that come with development in the Marcellus shale providing a one-stop service in multiple locations to western clients entering Appalachia for the first time. region. “Clients need to adjust to a different legal environment when they come to any of the Appalachian states, and they probably face the greatest need when they come to Pennsylvania,� explains Schetroma. “We provide a one-stop, comprehensive resource to meet the legal needs of the energy industry across Appalachia, which allows efficient deployment of exploration and production expertise and resources.� “Our team comprises one of the largest and most diverse energy practices in the region,� adds Sharon O. Flanery, chair of Steptoe & Johnson’s Energy Team. “The expansion into Pennsylvania, coupled with our knowledge of the Marcellus shale, strengthens our ability to develop solutions that are on target with our clients’ strategic objectives. Between the two firms, our lawyers have represented many of the largest, most experienced oil and gas companies in the country.� Flanery oversees the firm’s Energy Team from Steptoe & Johnson’s Charleston, West Virginia office, and concentrates in matters affecting coal, oil and gas, coalbed methane, natural gas pipelines and storage, hydro and biofuels. As a petroleum engineer with both an operating and legal background in the energy and natural resources industry, Flanery brings real-world experience to her practice, as she previously held the position of Vice President for Exploration at Columbia Natural Resources, and before that as assistant general counsel for Columbia Gas Transmission Corp./NiSource Corporate Services Company. Schetroma calls Flanery’s engineering background “invaluable.� “What we gain through Sharon’s expertise and leadership is the ability to speak that necessary language,� he says. “It is a truly unique service attribute that this firm has; Steptoe has had it forever, and now our clients are going to benefit from it also.�
A Client-Centric Approach
Steptoe & Johnson has serviced the energy industry for approximately 100 years. “One of the things that impresses me about Steptoe is what I view as a radically client-centric practice...,� explains Schetroma. “I think (the firm) brings a new and unique resource to people who are looking for deep expertise, solid value and a focused dedication to client satisfaction.� Now, Steptoe & Johnson enters its second century of service with a similar set of goals in mind – and a bright future in the energy industry. “With everything you read about Marcellus shale, everything you have going on with respect to the traditional coal industry, all the focus on renewables, and hopefully a national energy plan, it will continue to be a growth area...,� notes Flanery. “I expect we are going to be very, very busy for the next several years.� For more information, visit www.steptoe-johnson.com.
Pennsylvania’s Power Players David Hotchkiss received his Juris Doctor from the Dickinson School of Law. He is a retired member of the armed forces and is admitted to practice in the District Courts for the Eastern, Middle and Western Districts of Pennsylvania. Hotchkiss is a past president of the Crawford County Bar Association and practices as an oil and gas title opinion review attorney and litigator of oil and gas disputes in all Pennsylvania state and federal courts and in arbitration proceedings. Glenn Thompson is a graduate of the University of Pittsburgh School Of Law and earned an LLM in International Business Legal Studies from the University of Exeter (UK) He is a member and past president of the Crawford County Bar Association and past member of the House of Delegates of the Pennsylvania State Bar Association. Thompson focuses his practice as an oil and gas title opinion review attorney and as a transactional attorney in oil and gas acquisitions and divestitures. He also practices rural electric cooperative law. Alan Shaddinger received his law degree from Temple University and is a former law clerk to the Honorable Glenn E. Mencer, Judge of the Pennsylvania Commonwealth Court. Shaddinger focuses his practice in the areas of municipal law and in assisting the firm’s energy clients with local land use planning issues and in the resolution of disputes involving governmental entities. Brian Pulito is a graduate of the Syracuse University College of Law. Pulito focuses his practice in oil and gas law with an emphasis on litigation, arbitration, and mediation of disputes in all Pennsylvania state and federal courts.
Nathaniel Holland is a graduate of Cornell Law School. He served as a law clerk to the Honorable Anthony J. Vardaro, Judge of the Court of Common Pleas of Crawford County before joining Culbertson, Weiss, Schetroma and Schug. Holland focuses his practice in the area of energy with a focus in oil and gas law and an emphasis on identifying viable and persuasive theories derived from Pennsylvania and national precedents in matters of developing Pennsylvania oil and gas law.
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EDITORIAL > by Matthew R. Loeffler, CPA, CFP®, CTFA, CMA
In The Bank
Conversion Considerations for Roth IRAs With the Taxpayer Relief Act of 1997, there was a significant opportunity to invest after tax dollars in a Roth IRA (individual retirement account). At the time, an individual could make contributions, subject to contribution and income limitations. When he/she withdrew his/her money in the future, the entire amount would be free from taxation. One of the drawbacks is that people in higher tax brackets (for example, $114,000 of Modified Adjusted Gross Income [MAGI] for single taxpayers and $166,000 of MAGI for married taxpayers) could not make Roth IRA contributions. In addition, taxpayers with MAGI of $100,000 could not convert their traditional IRA to a Roth IRA, that is, until 2010. Effective this year, an individual can convert a traditional IRA to a Roth IRA regardless of their MAGI and pay the associated federal income tax in 2010, or that person can spread it equally with his or her 2011 and 2012 income tax returns at those effective rates. There are a myriad of variables to consider before making the decision to convert. In summary, some of the conditions that may warrant a conversion are as follows: 1. A belief that Federal Tax Rates will increase in the future. 2. Your IRA has lost value due to market losses over the past few years. 3. A belief that your IRA will grow substantially in the future. 4. You have liquidity outside of your IRA to pay the federal income tax related to the conversion. 5. You are converting because you believe your time horizon will provide ample opportunity to
return your tax payment. 6. You are converting because you want to provide a “tax free” asset for you and your beneficiaries. 7. You want to avoid Required Minimum Distributions. The first two considerations capitalize on lower current tax rates and depreciated investment values to reduce the federal tax liability. While that may be encouraging, one must believe that their investment value will increase in the future to recapture some or all of the tax payment to ensure that your net wealth has been preserved by such a conversion. In addition, you will want to strongly consider whether you have sufficient assets outside of your IRA to pay the federal income tax. If not, you will have to pay the tax from the IRA, which depletes your asset base for future growth. You can model your conversion using a Roth IRA conversion calculator on the Internet. However, I strongly recommend you consult your accountant and/or adviser due to additional considerations that may arise. A Significant Alternative With regard to the latter three beliefs, individuals who have accumulated substantial amounts in tax-deferred vehicles have a significant opportunity to provide a benefit to themselves and/or their beneficiaries. The opportunity for conversion, however, goes beyond assets in existing IRAs. Many individuals have accumulated substantial, tax deferred amounts in their qualified retirement plans (for example, 401(k) plans). Like an IRA, the distributions from these plans are taxed as ordinary income when they are withdrawn in future
years. Still, most plans allow for “in service withdrawals” at a certain age and before a triggering event such as retirement. Therefore, it may be possible to withdraw some or all of your vested account balance if your plan permits and rollover the funds to a Roth IRA to effect a conversion. If your plan does not permit “in service withdrawals” at a desired age, the plan sponsor may amend the provision. The considerations under this scenario are as follows: 1. A thorough review of your distribution provisions. 2. Consideration of creditor protection once your assets are removed from a qualified retirement plan. 3. As stated above, income tax implications should be reviewed thoroughly with your accountant and proper tax reporting from your plan’s recordkeeper should be discussed. For more information about these conversion considerations, contact Matthew R. Loeffler at BNY Mellon at matthew.loeffler@bnymellon.com or 814/874-5208. Matthew R. Loeffler, CPA, CFP®, CTFA, CMA is the senior sales director for Bank of New York (BNY) Mellon Financial Corporation in Pennsylvania. He works with clients in helping with retirement planning, estate and income tax planning and business succession planning.
September 2010 > www.mbausa.org > 15
HR Connection
COMPANIES GAINING MORE FACEBOOK FOLLOWERS Consumers increasingly expect their Employers with more than 200 full-time favorite brands to be active on employees who offer health coverage (including grandfat popular social media Web sites like hered plans) are now required to automatically enroll all Twitter and Facebook, according to of their new full-time employees into one of the plans offered and automatically a new survey. continue the enrollment of current emp loyees. Full time is Waltham, Massachusetts-based defined as regularly scheduled employe es who work 30 or more hours per week. The new health-c market research firm Invoke are reform legislation Patty Smith is the does not address part-time or seasonal Solutions Inc. found in a recent director of Em employees. It also ployee does not appl y to curr ent employees not on the plan. Benefit Service survey of 300 “active social media s at Employees subject to the auto-enrollm the Manufactu users” that 65 percent follow a rer & ent must be given Business Asso ample notice and allowed to opt out ciation. of the plans prior to company or brand on Facebook beginning participation in the plan. For mor e information, and 47 percent have posted please visit www.mbausa.org a comment on a company’s Facebook page. On Twitter, more than 31 percent of social networkers said they follow a brand a managed security company, busting” Web sites list, accounting or a company’s tweets. which finds that 10 percent of for 4.5 percent of all bandwidth SOCIAL MEDIA EATING UP all corporate bandwidth is spent use, and Windows Update ranks BUSINESS BANDWITH watching YouTube videos. third with 3.3 percent. The statistics YouTube takes up more business are based Web site traffic from Facebook follows second in bandwidth “than anything else,” medium-sized businesses. Network Box’s “bandwidth according to Network Box Ltd.,
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16 < www.mbausa.org < September 2010
DEPARTMENTS > Contact: John Onorato
When Regulating Off-Duty Conduct, Employers Shouldn’t Be Too Specific Employees’ personal and professional lives are constantly blending, especially in the age of happy hours, smart phones and social media such as Twitter and Facebook. Employees’ actions are more visible to the world now than ever before and this includes clients, colleagues and employers. The question is: Should an employer protect its image by implementing an off-duty conduct policy to regulate employees’ behavior outside the workplace? Maybe so. However, be sure to remember that an employee has privacy rights regarding what he or she does in their free time. Therefore, it is
important that the policy prohibits behavior that is tied back to actions that have a negative impact on the employer. The policy should remind employees that they have a responsibility to preserve the employer’s reputation. It should be very clear that any actions or comments that could cause embarrassment or negatively impact the employer are prohibited. When instructing employees on the policy, give examples of how a post would affect the employer. Be sure in your drafting to allow yourself the ability to administer discipline based upon the severity of the action and the impact to your organization.
If you need assistance in drafting a social media policy or would like your employee handbook reviewed, contact the Manufacturer & Business Association’s HR Department at 814/833-3200 or 800/815-2660 for assistance, or e-mail me at sbruce@ mbausa.org. Stacey Bruce is a PHR-certified HR generalist and Human Resource supervisor at the Manufacturer & Business Association.
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Your employees may all come at it a little differently, but today everyone wants lower health care costs. Highmark’s BlueAccount products get your employees directly involved in their health care spending through a Health Savings Account, Health Reimbursement Account or Flexible Spending Account. The more they’re involved, the smarter their choices. And that means lower costs. They get the tools to manage their accounts through one integrated online source. Along with the most doctors and hospitals, outstanding coverage, more choices, and good value. It all adds up to a greater hand in your company’s health. Find out more at 888.286.8414 or highmarkbcbs.com. Your health plan may not cover all your health care expenses. Read your contract carefully to determine which health care services are covered. HRA, HSA and FSA provided through separate arrangements with select administrators and custodians.
September 2010 > www.mbausa.org > 17
Company PROFILE
Decision Associates
Decision Associates
1540  East  Lake  Road,   Suite  100  (ULH 3$ Phone: Â
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The Decision Associates Team: Jim Ryan, Joe Gausman, Don Golding, Sue and Don Moore. Not pictured: Mike Estrich, Jim Gehrlein and Emily Wachter.
We can help you Write Your Own Success Story!
ESSENTIAL TOOLS Business, Tax & Succession Planning Employee Benefits Finance & Securities Intellectual Property & Technology Mergers, Acquisitions & Divestitures Labor & Employment Commercial, Contract & Complex Litigation Real Estate Acquisition Environmental Law Zoning & Land Use Workers’ Compensation Product Liability Defense Attorneys at Knox McLaughlin Gornall & Sennett, P.C. understand the unique challenges faced by manufacturers. From small proprietorships to large corporations and from dog food to sintered metals, we have worked with all types of businesses in many industries. We can provide the legal tools essential to your success. Rely on the Knox firm to find innovative solutions to your problems and add value to your business. Erie, PA
Jamestown, NY
North East, PA
Cranesville, PA
814-459-2800
www.kmgslaw.com
EDITORIAL > by Angie Angus
Noncustomers Offer Big Blue Ocean Opportunities Angie Angus is the manager of BOS Programs and Support Services.
This article is fifth in a series that will feature excerpts from the international best-selling book, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, by authors W. Chan Kim and Renée Mauborgne.
The third tier of noncustomers is comprised of older adults. This is a group of people that know that video games exist but would never consider it for entertainment. They are often put off by the complex technology and confusing controllers.
Traditional strategy focuses on how to get current customers within your industry to purchase from you instead of your competition. Blue Ocean Strategy looks at noncustomers of the industry and why they are not buying from either you or your competition. Getting the noncustomers to purchase your product or service opens up an entirely new market.
The Nintendo Wii looked at all the industry’s tiers of noncustomers to compare its commonalities and what is important to the buyers. All of the tiers were looking for more social activity, so they marketed the Wii as interactive and social with people of all ages. They reduced the complexity of the game controllers, the console setup and downgraded the graphics. This allowed for increased value for the buyer while lowering costs, which is value innovation. The Nintendo Wii also was able to bring in buyers from all three tiers of noncustomers and open up a blue ocean that is still unrivaled today.
There are three tiers of noncustomers. The first tier is the closest to your current market and is known as soon-to-be noncustomers. This group sits on the edge of your market waiting for something better to come along. They periodically purchase your product or service out of necessity or lack of other choices but are ready to leave your market at a moment’s notice. In the second tier are the refusing noncustomers who move slightly further away from your current market. These are people who know about the product or service offered by your industry, but actively refuse to purchase it. Reasons for refusal often include not being able to afford the current offerings of the industry or finding what is offered is unacceptable. The third tier lies furthest from the current customers of your industry. These are unexplored noncustomers. This group may not even know what your industry offers. They typically belong to a distant market that is never targeted by anyone in the industry. Let’s take a look at video games for example. First tier noncustomers of this industry include men in their late teens to mid-twenties. These people play video games but are on the edge of finding better activities to occupy their time. The second tier consists primarily of parents. Parents know about video game systems but choose not to play. They often view these games as sedentary and anti-social, as well as costly and many times, violent in nature.
Customers
When deciding which tier of noncustomer to focus on, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, suggests: “There is no hard and fast rule to suggest which tier of noncustomers you should focus on and when. Because the scale of blue ocean opportunities that a specific tier of noncustomers can unlock varies across time and industries, you should focus on the tier that represents the biggest catchment at the time. But you should also explore whether there are overlapping commonalities across all three tiers of noncustomers. In that way, you can expand the scope of latent demand you can unleash.” Next month: Learn to reconstruct market boundaries by using the six paths framework. If you are interested in learning more about how your company can explore blue oceans of opportunity, please visit mbausa.blueoceanstrategy.com or contact me at aangus@mbausa.org.
First Tier: “Soon-to-be” noncustomers
Second Tier: “Refusing” noncustomers
Third Tier: “Unexplored” noncustomers
September 2010 > www.mbausa.org > 19
Legal Q&A WHAT CAN I DO ABOUT EMPLOYEES WHO BLOG? Blogs are kind of a “diary� or “journal� with commentary, descriptions of events, or other material such as graphics or video. The host of the blog composes and uploads information. Blogs that address workplace issues are increasing steadily in number. The law in this area is still being defined. Even still, there are significant legal risks to employers associated with blogging. Your electronic communications policy should: 1. Protect all confidential and proprietary information (employees must be advised of specific subjects of confidential information); 2. Require employees to refrain from posting any material that identifies the company (or in the alternative, post a disclaimer); and 3. Reserve the right to take action if
any posting runs afoul of company policy. WE ARE UPDATING OUR HANDBOOK, WHAT DO WE NEED TO ADDRESS IN AN ELECTRONIC COMMUNICATIONS POLICY? First, do a little self-analysis. How are electronic communications being used in your company? The policies you enact should support the intended uses. Consider: 1. Are electronic communications solely for business use? If not, then define the parameters for personal use. 2. Have you reserved the right to review and disclose all information transmitted by or stored in your system? 3. Does your policy reserve the right to repair, inspect and service the computer? 4. Do you state in your policy that
electronic communications are not secure, even with the use of a personal access code or password and even after they have been deleted? 5. Have you prohibited derogatory, defamatory, obscene or otherwise inappropriate messages? 6. Have you reviewed with your attorney electronic communication retention/destruction rules? 7. Do you have signed acknowledgments from employees of your right to monitor electronic communications? 8. Is it clear that violations of policy will lead to disciplinary action (up to and including termination)? 9. Have you subjected electronic communications to the company’s no-solicitation/no-distribution policy? 10. Be sure to specify limits on Internet access.
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20 < www.mbausa.org < September 2010
DEPARTMENTS > Contact: John Onorato
Avoid the Temptation: Don’t Google Your Candidates You are conducting a job interview. The job requires that the person be able to drive. Question: May you ask to see the individual’s driver’s license? Answer: Generally you may not because the driver’s license contains the person’s date of birth, and, for the most part, you are not able to ask a person’s age during the selection process. The Internet provides extensive information about applicants, employees and employers, with such sources available as Google, Yahoo!, Facebook, MySpace, Twitter, etc. However, the potential exists for liability on the part of employers that use the Internet for employment decisions. Just as you may not look at the license because it contains prohibited information, you should refrain from Googling your candidates for employment.
I know it is very tempting — the Internet can yield valuable information about the character of an individual. Further, failure-to-hire lawsuits are much less likely than lawsuits over termination so the risk is low, and in some small way you will be tempted to defend yourself by claiming that you are avoiding a negligent hiring claim. Realize though, that, shocking as it may sound, everything that is on the Internet is not true. Further Google searches on individuals will yield plenty of information impermissible to consider. Just as a driver’s license contains a date of birth, a Facebook profile page may tell you if a person has children, is married, has political affiliations or religious beliefs. The best practice is to stay with the traditional approaches — obtain information directly from your
candidate, limit your inquiries to lawful areas, conduct reference checks, verify employment and educational information, and conduct an appropriate and lawful background check but only after first obtaining a release and authorization from the candidate. For more information, contact me at 814/833-3200, 800/815-2660 or jonorato@mbausa.org. Attorney John Onorato is the vice president/ general counsel at the Manufacturer & Business Association. He assists member companies with their legal needs and HR questions.
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OntheHill
DEPARTMENTS > Contact: Sheila Sterrett
Right-To-Work: What is it, and Why Does Pennsylvania Need It? Anna McCauslin is the state government relations representative for the Manufacturer & Business Association in Harrisburg. Contact her at 800/815-2660 or amccauslin@mbausa.org.
The U.S. Department of Labor says this about Labor Day: “Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and wellbeing of our country.” To celebrate this holiday, let’s take a look at how reining in unionized labor can benefit your business and Pennsylvania. Background: Enactment of right-to-work legislation is one of the Manufacturer & Business Association’s state legislative priorities. The phrase “right-to-work” refers to legislation and laws that seek to protect an individual’s freedom of choice in the workplace by prohibiting unions from negotiating contracts that would require an employee to join or financially support a union as a condition of employment. Currently, there are 22 states in the nation that have enacted right-to-work legislation. However, no other state has passed such legislation in the past 20 years. How does Right-to-Work Legislation Help My Business? States with right-to-work laws continually see more migration of the work force, with more than 60 percent of America’s labor force living in right-to-work states. These states also have a higher percentage of residents age 16 years or older working versus non-right-to-work states and traditionally see greater economic growth.
Lies Unions Want You to Believe Unions claim that workers have lower wages in nonright-to-work states and fewer benefits; however, the truth is that some of the states that have right-to-work laws also have lower corporate and personal income rates. Employees keep more of the wages they earn. Also, when unions require higher wages and higher benefits, companies are unable to make as much profit. Therefore, the company will not be able to afford wage-and-benefit increases or have as much capital to put back into the market, and will be paying less state and federal taxes. Unions claim that current federal law protects employees who do not want to join, and that it is unfair to union members if the union must represent an employee who does not pay dues. In Pennsylvania, if an employee does not want to join a union, they will still contribute to the union out of every paycheck. State of Right-to-Work Legislation in Pennsylvania On November 10, 2009, Representative Daryl Metcalfe (R-Butler), introduced a four-bill legislative package known as the Pennsylvania Open Workforce Initiative. He was joined by 10 of his colleagues and right-to-work advocates at a press conference to announce the package. The bills were referred to, and still remain, in the Labor Relations Committee. Representative Robert Belfanti (D-Northumberland) and Representative Gene DiGirolamo (R-Bucks) are the Majority and Minority chairs of the committee. Both legislators receive campaign donations from union political action committees. Eleven of Representative Belfanti’s top 20 contributors are unions. In fact, he received more than $25,000 in union campaign contributions in the last election cycle. Thirteen of Representative DiGirolamo’s top 20 contributors also were unions, receiving more than $40,000 from them.
t Higher number of workers: As mentioned before, more than 60 percent of America’s workers live in right-to-work states, a number which has steadily increased from 28.5 percent in 1970. t Decrease in union membership: Unions dislike right-to-work laws because their membership is significantly smaller in right-to-work states. t Better overall business climate: Right-to-work states also tend to have a better business climate attracting business and workers. Six of the 22 right-towork states do not have personal income taxes. Courtesy of www.nrtw.org/en/print/1052. September 2010 > www.mbausa.org > 23
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“ADP  specializes  in  helping  organizations  achieve  better  business  results  by  streamlining  key  administrative  duties  such  as  payroll,  KXPDQ UHVRXUFHV DGPLQLVWUDWLRQ WLPH DQG DWWHQGDQFH DQG EHQHÂżWV management.  At  the  end  of  the  day,  it’s  our  commitment  to  our  clients  and  our  belief  in  their  goals  that  has  given  ADP  such  a  trusted  name.  I  believe  this  is  the  reason  why  so  many  businesses  in  Erie  count   on  ADP.â€? –  Ken  Polk,  District  Manager,  ADP September 2010 > www.mbausa.org > 27
People Buzz FORQUER GROUP INC. WELCOMES UNIFIED COMMUNICATIONS EXPERT Forquer Group, Inc., an Eriebased information technology solutions provider, has welcomed Craig Allison as business development manager. With extensive experience in the IT and telecommunications industries, Allison is responsible for expanding Forquer’s unified communications capabilities as well as marketing the firm’s comprehensive IT services and products. A graduate of Gannon University, Allison brings extensive industry experience to his new role, including senior level positions with IPLogic, a national IT solution provider and Tollgrade Communications, a publicly traded telecommunications service assurance manufacturer. DYNAMIC MANUFACTURING APPOINTS BUSINESS DEVELOPMENT ENGINEER Dynamic Manufacturing in Freeport, Pennsylvania, has announced the addition of Matthew D. Parrish as business development engineer. Parrish comes to Dynamic with prior experience in the electronics industry, account management and business development. He is a graduate of Slippery Rock University with a bachelor’s in business administration. Dynamic Manufacturing specializes in electronic contract manufacturing services, contract design services, cable assemblies, box build and aftermarket services. ONCOLOGY INSTITUTE DIRECTOR HONORED Valerie Bond Waid, MBA, BSN, RN, director of the Yolanda G. Barco Oncology Institute of Meadville 28 < www.mbausa.org < September 2010
Medical Center, was recently honored at a program in Pittsburgh entitled, Wise Women. The program was developed by Deloitte & Touché USA LLP to increase the base of qualified, connected women leaders in the Pittsburgh and surrounding areas. It is an outgrowth of their Women’s Initiative and is founded on the premise that talented professionals and executives need both trusted mentors and a strong, diverse network of colleagues and friends in order to establish themselves as leaders in their careers and in the community. MALIN BERGQUIST’S FINNECY ELECTED TO AICPA COUNCIL CPA William G. Finnecy, a partner with the Erie office of the Malin Bergquist accounting firm, has been elected to the Council of the American Institute of Certified Public Accountants (AICPA), as representative of the Pennsylvania Institute of CPAs. Among other responsibilities, Finnecy will help this primary strategic decisionmaking body — governing the nation’s 350,000 CPAs — in making recommendations to Congress on measures to enhance U.S. financial reporting and taxation systems. With approximately 263 members from every state and U.S. territory, the Council has the authority to establish AICPA policies and procedures and to enact resolutions binding upon the Institute’s board of directors, officers, committees and staff. Additionally, John M. Kuhn of Malin Bergquist has received his designation as a certified public accountant (CPA) from the Pennsylvania
EDITORIAL > Contact: Karen Torres
State Board of Accountancy. Kuhn is a member of Malin Bergquist’s Forensic and Valuation and Notfor-Profit Organizations Groups. He holds a master’s degree in business and a bachelor’s degree in finance and accounting from St. Bonaventure University. Also, Christopher Elliott, an accountant with the Erie office of the Malin Bergquist, has been appointed to an advisory panel of Athena PowerLink®, a nonprofit organization providing professional advice to women-owned businesses. STAIRWAYS WELCOMES TWO NEW COLLEAGUES Stairways Behavioral Health has named A. Joseph Weindorf as health director of Risk Management. Weindorf has served as an independent consultant to Stairways in forensics and risk management, and moves now to an administrative role in oversight of facilities and risk management. Weindorf brings to his new position years of experience, as a veteran Erie police officer, magisterial district judge and as former director of public safety for the City of Erie and also the County of Erie. He is a state-certified instructor and has trained pre-service and in-service police officers for 20 years. Also, Lenore M. Skomal has been named the new editor for Stairways Behavioral Health’s UP Magazine, a quarterly community wellness and mental health awareness resource founded in 2008. Skomal is an award-winning author, editor and career journalist with more than 30 years professional experience in all forms of media.
Events
The Manufacturer & Business Association (MBA) and UMPC Health Plan recently co-sponsored the 12th annual Golf Classic Tour at Whispering Woods Golf Club in Erie to benefit three area educational programs including Pennsylvania Business Week, The Patrick R. Locco Scholarship Awards and The John P. Tramontano Jr. Education Fund. For photos, visit the Photo Gallery on www.mbausa.org.
Golf ball sponsor Matric Limited. A sellout each year, the Golf Classic Tour draws MBA members and their guests from across Pennsylvania, shown here with recent copies of the Business Magazine.
There were some close-calls but no one won this year’s Hole-in-One contest sponsored by Roth Cadillac.
Kevin McCormick of Erie Beer sponsored the on-course beverages.
UPMC Health Plan, represented by Ki Kim (second from left), co-sponsored the 2010 Golf Classic.
Jerry Eighmy of American Turned Products (right) with UPMC’s Ki Kim won $1,000 in the raffle drawing. Creative Imprint Systems sponsored these handy beverage coolers. Maple Donuts treated golfers to breakfast at the Welcome Station.
Sign sponsor Howard Industries.
The Employers’ Energy Alliance of Pennsylvania, Inc., represented by Patty Welther and Chuck Jenkins, provided the delicious boxed lunches.
Golf cart sponsor Highmark.
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