Category Archives: Business Law

Bill Introduced to Allow In-Home Beauty Services in Tennessee

Nashville, Tenn. – February 8, 2017 — State Senator Steve Dickerson, R-Nashville, and State Representative Sam Whitson, R-Franklin, introduced legislation today that would allow Tennesseans to purchase cosmetology services in the privacy of their own homes.

The reform comes after The Tennessee Board of Cosmetology and Barber Examiners filed a complaint last year against Belle, a popular Nashville-based technology company that provides on-demand health and beauty services.  The Board initially alleged that Belle was violating the state’s cosmetology laws, but withdrew its complaint after Belle formally contested the Board’s allegations.  The Board’s decision to withdraw its complaint was covered widely in local, state and national media including Forbes​, ​Yahoo, ​Reason, ​the Nashville Business Journal​ and ​​the Memphis Commercial Appeal, among others.

“As we move forward into the 21st century, we must update state rules and regulations to reflect the realities of the 21st century economy,” said Senator Dickerson.  “This bill will remove barriers that are denying Tennesseans the opportunity to develop and grow in their chosen profession. By removing these impediments, we allow the entrepreneurial spirit of Tennesseans to flourish, increase freedom and enhance choice for our state’s consumers.”

“The regulatory structure of our state must be thoughtfully crafted in such a manner as to allow for constant innovation and facilitate consistent growth in the new economy,” added State Representative John Ray Clemmons, D-Nashville, an early supporter of the reform.  “Tennessee must strive to attract entrepreneurial talent and new jobs.”

“Last fall, the Tennessee Board of Cosmetology unlawfully attempted to shut down one of Nashville’s most exciting new tech companies for the sole purpose of protecting an out-of-date industry competitor from competition,” said Daniel Horwitz, Belle’s attorney.  “This bill ensures that the Board will be prevented from engaging in such lawless behavior ever again.”

“The repeal of these outdated regulations means beauty professionals can freelance in a way that they see fit, and whether that’s with us or by themselves, I believe everyone has that right,” said Armand Lauzon, CEO of Belle. “This new legislation paves the way for further innovations and economic growth in Tennessee, and perhaps most importantly, it will allow consumers to have the right to make the choices they deserve.”

Read more about the case below:

Tennessee Regulators Drop Complaint, Won’t Block Beauty App From Operating

Tennessee Wants To Shut Down This Beauty And Health App For Offering ‘Highly Disturbing’ Competition

Regulators withdraw complaint against Nashville-based startups

Tennessee Cosmetology Board Admits it Doesn’t Have Authority To Regulate Tech Companies

How This Nashville Tech Company Challenged a State Regulatory Board and Won

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Tennessee Board of Cosmetology Backs Down, Withdraws Threatened Enforcement Action Against Project Belle

Nashville, Tennessee—The Tennessee Board of Cosmetology and Barber Examiners has officially withdrawn its threatened enforcement action against on-demand beauty services provider Project Belle, greenlighting the company’s business practices and enabling its continued growth throughout the State of Tennessee. The Board’s decision to back down comes after intense media coverage from local, state and national media outlets including Forbes, Yahoo, Reason, the Nashville Business Journal, the Beacon Center of Tennessee, and the Memphis Commercial Appeal.

The Board had claimed that the Tennessee Cosmetology Act of 1986 prohibited Belle from facilitating the purchase of beauty services in the privacy of a customer’s home. Accordingly, the Board demanded that Belle pay a civil fine, waive its right to judicial review, and cease and desist from operating. Instead, Belle lawyered up and formally contested the Board’s allegations, causing it to reconsider its threatened enforcement action. The Board’s decision to permanently withdraw its complaint soon followed.

“We are extremely pleased that the Board of Cosmetology has withdrawn its unlawful and overzealous threats against Project Belle, whose only crime has ever been to provide eager customers with convenient, premium quality beauty services at competitive prices in the privacy of their own homes,” said Daniel Horwitz, Belle’s attorney. “No government agency should be in the business of preventing popular, innovative businesses from serving willing customers just to protect entrenched industry competitors from competition. We look forward to working with the General Assembly in the coming months to make clear that the Board lacks the authority to deprive healthy, able-bodied consumers of their right to purchase their desired beauty services whenever and wherever they please.”

“The Board has decided to dismiss its complaint and Belle will continue its operations and growth efforts in Nashville,” said Armand Lauzon, Belle’s founder and CEO, who recently penned an op ed in The Tennessean calling on legislators to repeal Tennessee’s outdated cosmetology regulations. “We are delighted by the Board’s decision.  It means that beauty professionals who have built businesses with us can continue their success, and our clients can continue enjoying services that many of them desperately need. It also means that economic growth and innovation can continue expanding in Tennessee. We are proud to have helped pave the way on this important issue.”

“I also want to send a special thanks to the legislators who took time to voice their support on our behalf, including State Representative John Ray Clemmons, State Senator Steven Dickerson, and State Senator Mark Green,” added Lauzon.

For press inquiries, please contact Julia Bonner at julia@pierce-pr.com.  The individuals referenced in this release are available for comment at daniel.a.horwitz@gmail.com and armand@projectbelle.com.

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Five Pennsylvania insurance companies recoup $16 million in tax payments after Tennessee Supreme Court holds that retaliatory taxes were improperly assessed

By Daniel A. Horwitz

The American insurance industry is unique in many ways.[1]  Included among its quirks is an interlocking, state-by-state “retaliatory tax” framework that ensures that equally low taxes will be levied on insurance companies across the country no matter where they do business.  The gist of this “retaliatory tax” system is that if one state decides to impose a comparatively more onerous tax on insurance companies, then every other state will punish that state’s insurance companies by imposing a retaliatory tax against them in response.  With the sole exception of Hawaii, every state has enacted a retaliatory insurance tax statute for this purpose.[2]

To illustrate the practical effect of this framework by way of example, suppose that Alabama and Tennessee each tax insurance companies in exactly the same way, and further, that some number of Alabama insurance companies do business in Tennessee (and vice versa).  To close a budget deficit, however, Alabama decides to raise taxes on insurance companies that do business in Alabama.  Thereafter, in response, Tennessee’s “retaliatory tax” statute authorizes Tennessee’s insurance commissioner to levy a punitive tax on all of the Alabama insurance companies that do business in Tennessee.[3]  Additionally, every other state (except Hawaii) would punish Alabama’s insurance companies in exactly the same way.[4]  Considered broadly, this practice has been described as “holding hostages to coerce another sovereign to change its policies.”[5] Continue reading Five Pennsylvania insurance companies recoup $16 million in tax payments after Tennessee Supreme Court holds that retaliatory taxes were improperly assessed

Tennessee Supreme Court holds that businesses may lawfully refuse to hire employees solely because they’ve previously filed for workers’ compensation.

By Daniel A. Horwitz

Can a business refuse to hire you solely because you’ve previously filed a workers’ compensation claim?  According to the Tennessee Supreme Court, the answer is yes.

In Yardley v. Hospital Housekeeping Systems, the Tennessee Supreme Court accepted a certified question of law to determine whether the Tennessee Workers’ Compensation Act prohibits employers from refusing to hire a prospective employee solely because he or she “had filed, or is likely to file, a workers’ compensation claim incurred while working for a previous employer.”  In some states, discrimination of this sort is unlawful and gives rise to a claim for “retaliatory failure to hire.”  In an opinion authored by Chief Justice Sharon Lee, however, the Tennessee Supreme Court held that under Tennessee law, this practice is legal.

In 2010, Kighwaunda Yardley, a hospital housekeeping employee, was hurt on the job and began receiving workers’ compensation benefits.  She received treatment and continued performing “light duty work” for her employer until 2012, with the expectation that when she fully recovered from her injury, she would return to her job as a housekeeping aide.

Unfortunately for Ms. Yardley, in 2012, her job was outsourced to a separate company (“the New Company”).  The New Company re-hired most of the hospital’s housekeeping staff, but it declined to hire Ms. Yardley.  An internal email sent by the New Company’s Vice President revealed that he had written that Ms. Yardley had: “been out on Workers’ Comp with the hospital long before the [New] Company’s arrival,” that her shoulder was hurting her again, and that “bringing her on board with the [New] Company would seem to be a Workers’ Comp claim waiting to happen.”  The New Company’s Vice President also stated internally that he: “would advise against hiring Ms. Yardley IF we have that option.”   After she was not hired, Ms. Yardley sued the New Company for retaliatory failure to hire.

Continue reading Tennessee Supreme Court holds that businesses may lawfully refuse to hire employees solely because they’ve previously filed for workers’ compensation.

Summary of Tennessee’s For-Profit Benefit Corporation Statute

By Daniel A. Horwitz

On January 1, 2016, Tennessee’s For-Profit Benefit Corporation law will take effect.  Here’s a summary of the law and what it’s going to do.

1.  What is a For-Profit Benefit Corporation?

A For-Profit Benefit Corporation is defined under Tennessee law as: “a domestic business corporation . . . that intends to pursue a public benefit or public benefits.”[1]

2.  What’s the difference between a For-Profit Benefit Corporation and a “traditional” corporation?

By law, “officers and directors of a [“traditional”] for profit corporation are to be guided by their duty to maximize long term profit for the benefit of the corporation and the shareholders.”[2]

In contrast, “[a] for-profit benefit corporation shall be managed in a manner that considers the best interests of those materially affected by the corporation’s conduct, including the pecuniary interests of shareholders, and the public benefit or public benefits identified in its charter.”[3]  Thus, by law, directors of for-profit benefit corporations are obligated to take the interests of both shareholders and the corporation’s publicly beneficial purpose into account when discharging their duties.[4]

3.  What counts as a “public benefit”?

A “public benefit” is a positive effect (or a reduction of a negative effect) on one or more people, entities, communities, or interests other than the corporation’s shareholders.  This includes, but is not limited to:  artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific, or technological benefits.[5]

4.  Does the “public benefit” have to be specified in any formal way?

Yes.  Under Tennessee law, Continue reading Summary of Tennessee’s For-Profit Benefit Corporation Statute