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Arkansas Innovators Promote Tech's Everyday Problem-Solving

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Two years ago, Justyn Hornor was in Little Rock for the Ark Challenge accelerator program when he learned that Little Rock real estate agent Beverly Carter had been kidnapped and murdered while showing a home to someone she thought was a potential buyer.

Hornor, a former armed escort for unarmed Army National Guard personnel, and his partner, Tim Brausell, co-founded Real Agent Guard, which launched in November 2014. Real Agent Guard is a mobile security system for solitary workers in the real estate industry.

“We were trying to solve the problem of lone workers going out into remote areas and not having to come up with an expensive new device to keep track of them,” said Hornor, a staff sergeant who has served in the Army National Guard since 2009. “There are some really expensive solutions out there. If somebody gets hurt on the job, there is no way to detect if something has happened to them.

“We were trying to bring this to market for the energy industry. We shifted from the energy industry to focus specifically on the real estate market as our initial vertical. Really, though, this applies to so many different situations.”

The technology Hornor and Brausell developed and used is straightforward: Users register in their phone when and where they are scheduled to be; if they fail to check in, police can be notified quickly as to their approximate location. Hornor said the idea is similar to squad check-ins while on patrol in the Army.

The added element of Real Agent Guard is that the alert system works even if the user or the phone is disabled.

Versatile Building Block
Technology to many people conjures thoughts of self-driving cars and spaceships flying in outer space, or maybe a smartphone that can show you a picture of how much milk is in your refrigerator so you know how much to buy at the grocery store.

That same technology provides the building blocks for programs such as Real Agent Guard and Hunger Not Impossible, which started a 30-day pilot program in northwest Arkansas on Nov. 26. Hunger Not Impossible, developed by Not Impossible Labs of Venice Beach, California, chose northwest Arkansas because Wal-Mart is headquartered there and because of the growing technological ecosystem of the area.

“Solving hunger is not necessarily a problem you would look at [and say], ‘We can solve hunger with tech,’” said Michael Paladino, the co-founder and chief technology officer of RevUnit in Bentonville. “But as you start to think more and more, tech will be a part of every solution. The younger generation is more geared that way; they do think of tech as part of every solution. For some of us who haven’t grown up with cellphones in our hand, it’s still a shift in thinking. It should be a part of every solution for every problem out there.”

RevUnit is one of the area technology companies that are working with Hunger Not Impossible. Erika Suhr, the manager of the pilot program, said her company found out that even a large percentage of the homeless or food-insecure (often people are both, of course) have cellphones, if not wireless plans.

The program allows users to request a meal through a text and identifies what restaurants are close. A volunteer then orders and pays for the meal with the program’s funds, and the user then gets the meal.

Suhr said food banks and hot meals at places such as churches are great helps, but some of those in need don’t have the facilities to prepare a meal or perhaps the time and ability to get to where the hot meals are. The Hunger Not Impossible technology hopes to be a third alternative.

“I don’t want to insult the team that has built the tech around this and say that it is low tech, but the beauty of it is it is simple and accessible,” Suhr said. “Whether you are someone who has a government-issued phone and you have 450 minutes a month or you’re relying on WiFi to connect, if you have a phone — and 62 percent of the homeless do — this is an answer. You have the tech in your pocket already.”

Tech Proliferation
Casey Kinsey is the founder and president of Lofty Labs, a web development consultancy in Fayetteville. He said the impact of technology has grown since it has become more accessible to the general public.

Remember those old stories about how NASA’s first computer weighed 10 tons and took up a city block? Well, the computing power of a smartphone puts those old dinosaurs to shame.

“It’s the small-business economy on software,” Kinsey said. “People are turning their attention to smaller problems. Tech was shipping people to the moon. At Lofty Labs, we’re not shipping people to the moon, but we’re using the same technology to solve terrestrial problems.”

As technology became accessible, people with a multitude of different agendas have embraced it. Some use it to design incredibly complex logistical plans for transportation; some use it to analyze big data for financial institutions; some use it to figure out a way to connect hungry people to food.

Some use it to chase and collect imaginary creatures.

“Pokemon Go is a crazy example of what technology can do,” Paladino said. “It’s not solving anything. That’s an example of technology not just changing behavior as it impacts looking at your phone, but changing physical behavior. People were driving to parks and walking around and driving to the Bentonville Square. It was literally activating groups of people to go do something. It was for a game; it wasn’t solving any social issue.”

Kinsey said the proliferation of technology is a great thing. Government agencies and huge corporations spend incredible amounts of money on developing and revising technologies for big-ticket problems.

But the availability of that technology allows for Hunger Not Impossible to use cellphones to feed the hungry.

“It’s a pretty cool time,” Kinsey said. “[Proliferation] is a big driver of all this you’re seeing. It’s really amazing that technology is being applied in all these ways.

“The little guy can look at any problem and work to solve problems too small for the big guy.”


Family Owners Wrangle Over Homer's Restaurant

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The popular Homer’s Restaurant in east Little Rock is at the center of a complicated family feud pitting the daughter of the restaurant’s founder against her two brothers.

Katrina Connell Vaughn has sued her older brother, Robert Connell; his wife, Alicia Ford Connell; younger brother, David Connell; and DC Group Inc., which operates Homer’s West Restaurant in west Little Rock. The three siblings are the children of Homer Connell, who opened Homer’s Restaurant in 1986, and his widow, Remedios or “Remy.”

Homer Connell died June 17 at age 73.

“This is an unfortunate family dispute in which two elderly parents — a mother who has long been incapacitated and a father who is recently deceased — have been taken advantage of by certain family members in an effort to improperly assert control over their finances and property,” said Vaughn’s suit, filed last month in Pulaski County Circuit Court.

Vaughn, of Little Rock, alleges that her brothers are “acting directly contrary to their parents’ wishes” as expressed in a series of estate planning documents. She asks the court “to stop the misappropriation and diversion of assets” and re-establish Vaughn as trustee of her parents’ trusts and the person in charge of finances and health care for her mother, who is in a nursing home. The lawsuit also says that the brothers are excluding Vaughn from her rightful role in running Homer’s Restaurant, at 2001 E. Roosevelt Road, and in receiving a share of profits from Homer’s West, at 9700 N. Rodney Parham Road.

It also alleges that brother Robert Connell replaced his sister’s power of attorney for their mother with a “bogus” power of attorney that was the product of “fraud, duress, coercion, undue influence, and procurement.”

Vaughn’s lawsuit details a sad story of parental and sibling estrangement and the decline of the parents.

The lawsuit says that father Homer Connell, after having taken issue with Vaughn’s care of her mother, sought to remove her as trustee of a family trust.

Homer Connell, “in a questionable state of mind,” also wrote a codicil to his will in February 2016, shortly before his death, seeking to remove Vaughn as his representative and instead naming David, as well as seeking to prevent Vaughn from inheriting anything from her father’s estate, the suit says.

Vaughn “was never made aware of much less provided with the secretly-created First Codicil until well after Homer’s death,” the suit says.

A Matter of Control
Vaughn had worked at Homer’s since 1991, “handling its books, records, and generally managing the operation including but not limited to ordering and serving food and waiting on tables,” according to the lawsuit. It also says that Vaughn is the full owner of RK&D Inc., the corporation that operates Homer’s.

“Defendants have excluded her from the restaurant and to Katrina’s knowledge no corporate tax return has been filed for 2015, which obviously needs to take place,” the suit says.

Robert Connell was long estranged from his parents and was intentionally excluded as their beneficiary in estate planning documents executed in 2014, the suit says. However, the lawsuit says, Robert Connell and his wife, Alicia, are now “in partial control of and operating the restaurant despite the fact that neither one of them is an owner or officer of the entity.”

The suit alleges that the couple have had numerous disputes with the IRS and the state of Arkansas over “taxes, liens, judgments, and other indebtedness, to the extent that tax returns have been filed in recent years at all.”

As for Homer’s West, Vaughn’s lawsuit says that David Connell is president and Vaughn is vice president and that as “a practical matter, she helped her brother David get the restaurant off the ground and turn it into the successful enterprise that it is today.”

Vaughn and David Connell agreed to a split of Homer’s West profits with Vaughn to get 70 percent and David 30 percent, the suit says.

“However, she received virtually no compensation for her work and she consequently was forced to walk away from the business after three years,” the suit says.

Vaughn’s lawsuit seeks to invalidate Robert Connell’s power of attorney over their mother, to confirm that Vaughn remains the trustee of two family trusts and to return control of Homer’s Restaurant to Vaughn.

Vaughn also says David Connell and DC Group never got permission to use Homer’s name for the purposes of Homer’s West and asks the court to force them to adopt a new name, something like “David’s Restaurant.”

Calls to David and Robert Connell were not returned by press time.

Cave City Votes to Become a Dry Township

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CAVE CITY - The decision by Cave City voters to become a dry township in wet Sharp County will definitely have an impact on the town's budget, but the city plans to still have 24-hour police coverage.

Cave City Township elected to make it dry by a vote of 500 to 436. The ballot issue was the result of a months-long petition supported by leadership in churches within the community.

"We were getting about $200,000 (in sales taxes) last year," Cave City Mayor Ron Burge said. "We'll probably lose around $20,000 (per year)."

Burge said that despite the loss, the 24-hour police presence will remain.

"We're going to continue to do that," Burge said. "We have enough money to do that. The sales tax was a little more than we predicted that it would be."

On social media, there had been comments tying the 24-hour police coverage directly to the sales of alcohol in the city because of speculation that it would result in more crime.

Burge said that is not the case.

"We had wanted 24-hour coverage for years," Burge said. "We had break-ins in the middle of the night before alcohol and we'd have to have an officer on call all the time. We would have to call somebody and it would take maybe an hour for someone to get there if you had a problem in the middle of the night. We wanted 24-hour coverage, (but) we just had not been able to afford it."

Burge said his own business had been broken into during the nighttime hours. He said officers would work until 11 p.m. or midnight, but be on call until 7 a.m.

Since the county, and thus the city, went wet in 2013, Cave City has had four full-time officers.

It's not just the city sales tax that will be affected, the Batesville Guard Online reported. Businesses will see loss in revenue as well, possibly affecting their employees.

"We got pretty much until the end of the year to sell what we got," said Sam Johnson, manager of the Flash Market in Cave City. He also said the store will have to cut back on staff as well as hours for employees who remain.

Another business that sells alcohol in Cave City is Dollar General, a nationwide chain. Although they are a publicly traded company and thus do not comment store by store, they did reply to an email from the Guard.

"We operate our business in accordance to all local, state and federal laws; we plan to remove the products from store shelves when the law goes into effect to comply with the new local regulation," Crystal Ghassemi with Dollar General Corporation Corporate Communications wrote.

In other parts of Sharp County, particularly the northern parts, brand new liquor stores were constructed when the county went wet. Liquor stores include T&C Sportsmans Liquor near Ravenden, Bootleggers near the Fulton County line, The Liquor Store in Hardy and Triple D in Ash Flat. So far, there have been no moves to make the townships that the liquor stores are in dry. If one of those townships were to vote to go dry, though, it could mean the liquor store owners will lose hundreds of thousands (or more) dollars that were invested in constructing and filling the stores.

"The permit would have to be canceled," said Milton Lueken, attorney at the Alcoholic Beverage Control division. "The law allows any such store affected 60 days to sell inventory on hand. They would not be able to purchase more inventory."

Lueken said that there would not be any legal recourse for store owners to cover the losses of construction. The only hope they would have is to find that there were irregularities in the election.

"When you're in a small township where people are more conservative, you run the risk of having an election and putting you out of business," Leuken said. "What some people have done is file a transfer to put the liquor store out of the township."

The wet/dry issue is a contentious issue in Independence County. Throughout most of 2016, there had been a petition signing effort throughout the county, led by the group Keep Our Dollars in Independence County, to get a wet/dry vote on the Nov. 8 ballot. The petition also had the support of both Walmart and Kroger retailers.

The petition was submitted July 22 and was 744 signatures short of the 7,996 (or 38 percent of registered voters in the county) required to get the measure on the ballot. Keep Our Tax Dollars in Independence County was given a 10-day extension to recoup the difference.

On Aug. 9, the group resubmitted 13,503 signatures. Of those, the clerk's office verified that 7,619 signatures were valid, but still 377 short of the required number. Some 5,884 signatures/signature lines were rejected if they were duplicates, if the person was not a registered voter and if a person registered to vote after signing the petition.

Signatures of people residing outside of Independence County also were rejected as well as those contained on sheets without proper notarization or dates. Illegible and incomplete signatures/signature lines also were thrown out.

However, 424 valid signatures were rejected if they were listed on sheets containing a signature(s) from individual(s) residing outside of Independence County.

Independence County Clerk Tracey Mitchell told the Guard that she followed state law when validating the petitions because Arkansas law on local option elections says if a petition includes signatures from petitioners of more than one county, the entire petition is rejected.

Keep Our Dollars in Independence County filed a lawsuit claiming registered Independence County voters' signatures were improperly rejected by Mitchell.

Currently, the lawsuit is under appeal. If the court rules in favor of Keep Our Dollars in Independence County, the wet/dry issue will automatically appear on the 2018 ballot.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

George's Inc. Hires New VP

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George’s Inc. of Springdale announced Monday that it has hired David Jetter as vice president of culinary innovation and product development.

“David’s creativity, customer-first mindset and process-oriented focus make him a great addition to our team," Co-CEO and President Charles George said in a news release. “We consistently strive to ensure our operations are in tune with the newest in food service innovation, and David’s culinary experience and proven track record of delivering meaningful results is exactly what we’ve been looking for in this role."

Jetter has 25 years of experience in the food service industry, including serving as a corporate chef for both national accounts and food service distributors at Tyson Foods Inc.

He graduated from the College of Culinary Arts at Johnson and Wales University and has hands-on experience as executive chef, sous chef, chef de cuisine and chef de partie at various restaurants throughout the country.

Cheryl S. Miller Joins Tyson Foods Board of Directors

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Tyson Foods Inc. of Springdale said Friday that Cheryl S. Miller, the chief financial officer for America's largest auto retailer, has joined its board of directors.

Miller, 44, is executive vice president and CFO for AutoNation Inc. of Fort Lauderdale, Florida. She's now one of nine independent directors on the 12-member board and will serve on the audit committee.

Tyson said Miller has more than 20 years of corporate finance experience including more than 15 years in the automotive industry. At AutoNation, she's a member of the company's executive committee and is responsible for all financial functions.

"Our nominating committee recommended Cheryl because of her financial background in consumer-focused industries and her experience in such key areas as acquisitions, cybersecurity and e-commerce," John Tyson, chairman of the Tyson Foods board of directors, said in a news release. "We believe her insight will be helpful as we explore new ways to continue growing our business."

Miller joined AutoNation in 2009 as treasurer and vice president of investor relations and was promoted to CFO in 2014. She previously worked for JM Family Enterprises, ION Media Networks, Republic Industries and Circuit City.

In addition to Miller and John Tyson, other members of the Tyson board of directors are Gaurdie E. Banister Jr.; Mike Beebe; Mikel A. Durham; current Tyson Foods president and incoming CEO Tom Hayes; Kevin M. McNamara; Brad T. Sauer; Jeffrey K. Schomburger; current CEO Donnie Smith; Robert Thurber and Barbara A. Tyson.

Christmas by the Numbers

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$626.1B
Holiday sales in 2015, an increase of 3 percent compared with 2014.
Source: National Retail Federation

$105B
Nonstore holiday sales in 2015, an increase of 9 percent compared with 2014.
Source: National Retail Federation

$69.1B
Total digital holiday spending in 2015, an increase of 13 percent over 2014.
Source: comScore

$929
The average amount shoppers plan to spend on Christmas gifts this holiday season, up from $882 last year.
Source: American Research Group Inc.

738,800
The estimated number of retail workers expected to be hired in the United States for the holiday season, unchanged from 2015.
Source: Challenger Gray & Christmas

25M-30M
The number of real Christmas trees sold in the United States every year.
Source: The National Christmas Tree Association

$1.1B
The value of U.S. imports of Christmas tree ornaments from China between January and September 2016. Imports from China led the way with 92 percent of the total imports of Christmas tree ornaments.
Sources: U.S. Census Bureau, International Trade Statistics

$25B
Estimated sales of toys in the United States in 2015, an increase of 7 percent over 2014.
Source: The NPD Group as reported to the Toy Industry Association

350,000 acres
Number of acres devoted to growing Christmas trees in the U.S.
Source: The National Christmas Tree Association

Sun Paper, McFadden Stories Grab Online Attention in 2016

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Shandong Sun Paper Industry’s decision to put a $1.3 billion pulp mill in Clark County was the most viewed story on ArkansasBusiness.com this year.

Arkansas Business had been tracking the company’s plans, officially announced April 26, since at least 2013, the same year Gov. Mike Beebe announced the $1.3 billion Big River Steel project, now wrapping up construction in Osceola.

At the time, word circulated that state and local economic developers had been working on another billion-dollar project. Arkansas Business reported in Whispers in February 2013 that Sun Paper was looking to invest in a pulp mill in Camden or Arkadelphia.

Back then, Camden was said to have an edge, with the Chinese eyeing that city’s former International Paper Co. site. But the Clark County site, just south of Arkadelphia near Gum Springs, boasted quick interstate access.

When official word finally came down in April, Gov. Asa Hutchinson called the project one of “the largest private investments in the history” of Arkansas. Sun Paper’s founder and chairman, Li Hongxin, said the bio-refinery would result in 2,000 construction jobs over a two and a half years of building, about 1,000 indirect jobs and 250 permanent jobs.

The average salary will be about $52,000.

Stories about major new economic development projects and new jobs are reliable online traffic drivers, but so are stories about prominent Arkansas sports figures. And one sports star who still commands attention is former Razorback football star Darren McFadden.

McFadden, now a running back for the Dallas Cowboys, filed a lawsuit in June against his former family friend and financial adviser, Michael Vick of Pulaski County, accusing Vick of “gross incompetence, self-dealing and outright theft” of more than $15 million.

While the alleged theft and mismanagement haven’t left McFadden bankrupt, a friend of McFadden’s told Arkansas Business Senior Editor Mark Friedman, the incident once again showed that professional athletes can be vulnerable to fraud.

“The problem of financial fraud against professional athletes is pervasive,” Laurence Landsman, a partner at the Chicago law firm Block & Landsman, told Friedman. “It happens with alarming frequency, and it is a difficult crime to detect before the money’s gone.”

Vick has denied wrongdoing. Because of McFadden’s NFL schedule, the case is scheduled to go to trial sometime between March and May 2018.

The influence of Texarkana attorney John Goodson also caught reader attention in 2016.

It was Arkansas Business — specifically Friedman — that first reported in December 2015 a questionable legal strategy used by Goodson and other attorneys involved in a class-action lawsuit against the United Services Automobile Association. While a U.S. District Court judge was pondering how to sanction Goodson and others for what the judge called “forum shopping,” Arkansas Business was also investigating Goodson’s role in getting a group of out-of-state attorneys a contract with the state auditor’s office.

Friedman’s story revealed that state Auditor Andrea Lea agreed to pay the attorneys a contingency fee nearly twice as high as other states have committed to pay in a long-odds pursuit of unredeemed U.S. Treasury bonds that belonged to Arkansans.

The law firms were introduced to Lea by Goodson, one of her campaign contributors and the husband of Arkansas Supreme Court Justice Courtney Goodson. While Goodson did not comment for the story, Lea told Friedman that Goodson’s campaign contributions didn’t play a role in her choosing the firms he recommended.

In the course of reporting the story, Arkansas Business learned that Lea repeatedly instructed staff to use private accounts to send emails about official state business to her private email address. Lea said she would implement “a new communication policy for the office to avoid any appearance of impropriety.”

Other People’s Money
Other people’s money — and how they use it — also drove clicks at ArkansasBusiness.com this year.

Friedman’s account of a legal dispute between Kristian Nelson and Mike and Gina Fullerton offered a glimpse into how the best intentions can have costly results.

The couple befriended Nelson, an ex-con, in part because they all attended the same church. The three teamed up to turn a former yoga studio on Pinnacle Valley Road into a restaurant and build an office building next door.

The deal soon collapsed; three separate suits were filed against Nelson and the construction company he worked for, alleging work on the project wasn’t done or properly completed. Meanwhile, Nelson filed liens and a civil suit against the Fullertons, alleging they used Nelson’s status as a convicted felon to keep him from getting an ownership interest in their joint business venture.

Marty Cook reported on a more successful investment: Gene Whisenhunt’s $19 million purchase of 375 undeveloped acres along Interstate 49 in Rogers in 2012.

The property had been forfeited to Bank of America as the result of $80 million in bad loans. Four years later, Whisenhunt’s bet is paying off, as development has restarted — in part because of Whisenhunt’s prescience.

“It signaled the end of the recession,” Ramsay Ball of Colliers International in Rogers said. “Those properties were stalled, and now they’re building out. They validated the region.”

Arkansas Business readers also remain fascinated by the state’s business leaders. This year, Arkansas Business unveiled a new feature profiling 10 of the state’s biggest “business icons.”

The brief overview that linked to the individual profiles of people like Warren Stephens, Johnny Allison, George Gleason and Alice Walton was not included in this year’s top 10 list. If had been, it would have been the No. 1 most visited article of the year by far.

The Full List

  1. Sun Paper of China Picks Clark County for $1.3B Pulp Mill — Gwen Moritz and Lance Turner
  2. NFL's Darren McFadden Learns Lesson From Financial Fumble — Mark Friedman
  3. John Goodson Helped Law Firms Get State Auditor Contract Potentially Worth Millions — Mark Friedman
  4. Church Friendship Collapses Along With Building Plans — Mark Friedman
  5. Whisenhunt’s $19M Cash Bet In Northwest Arkansas Pays Off — Marty Cook
  6. Pulaski County's Most Expensive Home Sales of 2015 — Mark Friedman
  7. Arkansas Hospitals Face Lawsuits After Refusing Insurance — Mark Friedman
  8. New Owners Leave Lindsey’s Resort in Familiar Hands — Alexis Hosticka
  9. Developer Brandon Woodrome’s $2M Fraud Seen From The Inside — Mark Friedman
  10. Inside New Overtime Regulations, Traps to Avoid, How to Prepare (Stuart Jackson Commentary)

Bonus: Ten Arkansas Business Icons Have Stories to Tell — Gwen Moritz

Dickens: Relevant 173 Years Later (Editorial)

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“At this festive season of the year, Mr. Scrooge,” said the gentleman, taking up a pen, “it is more than usually desirable that we should make some slight provision for the Poor and destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir.”

“Are there no prisons?” asked Scrooge.

“Plenty of prisons,” said the gentleman, laying down the pen again.

“And the Union workhouses?” demanded Scrooge. “Are they still in operation?”

“They are. Still,” returned the gentleman, “I wish I could say they were not.”

“The Treadmill and the Poor Law are in full vigour, then?” said Scrooge.

“Both very busy, sir.”

“Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course,” said Scrooge. “I’m very glad to hear it.”

“Under the impression that they scarcely furnish Christian cheer of mind or body to the multitude,” returned the gentleman, “a few of us are endeavouring to raise a fund to buy the Poor some meat and drink, and means of warmth. We choose this time, because it is a time, of all others, when Want is keenly felt, and Abundance rejoices. What shall I put you down for?”

“Nothing!” Scrooge replied.

“You wish to be anonymous?”

“I wish to be left alone,” said Scrooge.


If you have the luxury of Abundance, perhaps you’ll take time to remember — “at this festive season of the year”— the many who feel keen Want, even in this great and generous nation.


What a Difference A Year Makes (Gwen Moritz Editor's Note)

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Arkansas Business Publishing Group shuts down between Christmas and New Year, so there’s always a reward for pushing on through. I don’t think I’ve ever been so eager for a year to end while simultaneously dreading the new one.

A year ago, I used this space to make a “grown-up Christmas list,” riffing on an Amy Grant song, and I actually got some of what I wished for. The middle class in America did see a rebound in median income. Abuse of the justice system in Arkansas was punished rather than rewarded. People who bribed state officials were sentenced to prison rather than given immunity.

I would enjoy those blessings more if two of my wishes hadn’t been ground into dust and watered with my tears.

A year ago, I actually wrote these words: “2016 being an election year, my list also includes this standard wish: That anyone who sets out to mislead the public be thwarted.” Instead, a man who entered the political arena by promoting a malicious lie about the citizenship of the current president was himself rewarded with the presidency.

I also wished last Christmas that someone would figure out a new business model for the news industry that would support the kind of robust reporting and editing staffs we had when I entered the field almost 35 years ago. I explained then that this was not just a selfish wish: “I genuinely believe that democracy depends on an informed electorate,” I wrote, blissfully ignorant that the next few months would reveal the depravity of the minds that were already rushing in to fill the void.

(A young man, undereducated and unemployed, becomes increasingly religious and ultimately feels compelled to drive 350 miles to conduct his own armed assault on a pizzeria in response to ominous messaging about the actions and motives of American political figures that he obsessively accesses online. Clearly, radicalizing propaganda can work on susceptible Christians too, but are Christian parents monitoring the fake news their children are absorbing?)

A year ago I knew we would be facing a miserable election year, but I assumed (stupid me) that we would end up with a president who was fit and prepared for the job, even if not perfectly aligned with my opinions. Now I have no idea what to expect from 2017.

Will Donald Trump actually get interested in the details of legislation? If so, will he actually try to deliver on some promises made to the working class? (Will he even remember what those promises were? He said he forgot completely that he had made some kind of promise about Carrier jobs in Indiana.)

Or will he rubberstamp any legislation that Congress sends over in exchange for letting him do whatever he wants with the office of the presidency — including continuing to produce a reality TV show?

A huge question for me: What will happen to the Affordable Care Act? Trump may have forgotten that he promised to replace it with something much, much better, but 20 million Americans — including 300,000 Arkansans — are counting on him not to pull the rug out from under them.

Politically, of course, it was absolutely unthinkable for any Republican to vote to make improvements in Obamacare while Barack Obama was president. Perhaps now, with Trump getting all the credit, Congress will make the fixes that could have been done years ago.

I think that’s the only wish I’ll make publicly this year: That politics finally take a back seat to the reality that millions of hardworking Americans, many of them employed by readers of Arkansas Business, simply cannot afford health insurance without help from the government.


The last issue of the year is an indulgence for the Arkansas Business reporting staff. We revisit what we think have been the biggest business stories in Arkansas in the past 12 months, and we remind ourselves and our readers of the most interesting things newsmakers have said and done.

Next week, subscribers will receive the Book of Lists. It’s a compilation of the lists — accounting firms, banks, hospitals, etc. — that we do every week of the year, and this year we’ve added a section of “Market Facts” for a big picture that complements the minute detail of the lists.

I’m the editor of the Book of Lists, but I’m also its biggest fan. I use it almost every day; I can’t imagine how anyone who sells anything in Arkansas lives without it. Here’s a pro tip for 2017: When the Book of Lists hits your desk, get a big fat marker and scrawl your name across the front immediately.


Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.

Bentonville's Big Whiskey Plans Sours Little Rock Franchisee

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The news that a Big Whiskey’s franchise is opening in Bentonville left the owners of the Big Whiskey’s in Little Rock with heartburn.

Big Whiskey’s of Little Rock LLC said it had the franchise rights to Big Whiskey’s American Restaurant & Bar in Arkansas.

That’s according to a four-page complaint filed last month in Pulaski County Circuit Court.

The Little Rock franchisee didn’t find out until after the fact that Whiskey Holdings LLC, owned by Shane Miller of Bentonville, had secured the rights to a location in Bentonville.

The northwest Arkansas Big Whiskey’s is expected to open until early next year.

In a LinkedIn profile, Miller said that he has “plans for several more locations in Northwest Arkansas over the next few years.”

The Little Rock Big Whiskey’s, though, said it had the right of first refusal for any Big Whiskey’s in Arkansas, according to the lawsuit filed by John Keeling Baker of the Mitchell Williams law firm in Little Rock.

The Little Rock Big Whiskey’s wants the judge to award the franchise rights to it and prevent the northwest Big Whiskey’s from operating the franchise.

The northwest Big Whiskey’s had not filed its answer in the case as of Thursday.

We didn’t hear back from the corporate Big Whiskey’s of Springfield, Missouri.

Notable Arkansas Deaths in 2016

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The first day of 2016 saw the death of a political giant in Arkansas, Dale Bumpers, and in April, Ray Thornton, a respected politician, jurist and educator, died.

Also passing during the year were a number of noted philanthropists, such at Pat Walker; business heavyweights, such as Tyson’s Buddy Wray; and beloved media veterans, including Ben Fry, Allen Weatherly and Beth Ward Haynie.

Following is a reminder of some of the notable deaths of 2016.

January

Dale Bumpers, 90, a former Arkansas governor who served in the U.S. Senate for 24 years, died Jan. 1. Bumpers, considered one of the most talented politicians Arkansas has ever produced, defeated Orval Faubus and Winthrop Rockefeller for governor in 1970 and J. William Fulbright in 1974 for the U.S. Senate. A gifted speaker, Bumpers delivered one of his best-known speeches defending President Bill Clinton during Clinton’s impeachment trial.

Hayes McClerkin, 84, former speaker of the Arkansas House of Representatives, died Jan. 6. McClerkin, a prominent Texarkana lawyer, also served as an aide to Gov. Jim Guy Tucker. He was a member of the House from 1961-70 and was a member of the Arkansas Blue Cross & Blue Shield board, serving as chairman 2004-11.

Bradley Dean Jesson, 83, of Fort Smith, a former chief justice of the Arkansas Supreme Court, died Jan. 11. Most of his career was spent with the Hardin Law Firm, now Hardin Jesson & Terry PLC, but Jesson also served as Fort Smith city attorney, legislative secretary to Gov. Dale Bumpers, chair of the Arkansas Democratic Party, chair of the University of Arkansas Board of Trustees and special master for the Supreme Court in Lake View School District v. Huckabee, the landmark case involving public education in Arkansas.

Jim Hannah, 71, former chief justice of the Arkansas Supreme Court, died Jan. 14. Hannah, a longtime circuit court judge, was elected to the court in 2000 and became chief justice in 2004, serving in that role until August 2015, when he resigned from the court because of illness. He was known for his efforts to make the court system more open to the public and to implement new technologies, particularly digital technologies.

Donald “Buddy” Wray, 78, former president of Tyson Foods Inc., died Jan 18. Wray was instrumental in transforming Tyson Foods into a corporate giant. The University of Arkansas established the Donald “Buddy” Wray Chair in Food Safety in the Dale Bumpers College of Agriculture in 2004, and Wray was inducted into the Arkansas Agriculture Hall of Fame in 2012. He retired from Tyson in 2014.

March

Otto Jech, executive vice president of George’s Inc. of Springdale, died March 6. He was 86. Jech began his poultry career in his father’s chicken coop building business and in 1951 began taking care of a chicken farm for the founder of George’s. He was named executive vice president of the company in 1980.

Ben Fry, the longtime general manager of Little Rock public radio stations KUAR and KLRE, died March 10. Fry, 54, had been general manager of the two University of Arkansas at Little Rock-affiliated stations since 1995, overseeing financial management, engineering, programming and fundraising.

Bob Cooper Coleman Sr., a member of the family that founded Coleman Dairy in Little Rock, died March 18 at the age of 62. Coleman worked for 44 years at Coleman Dairy, which was established in Little Rock in 1862, sold to a dairy cooperative in 1995, and in 2006 became a division of Hiland, owned by Prairie Farms of Carlinville, Illinois. Coleman, head chef of the Coleman Cooking Team, also was active with the Arkansas Hospitality Association, which in 2013 honored him with the Maurice E. Lewis Lifetime Achievement Award.

John Simone, the former CEO of USA Truck Inc. of Van Buren, died March 24 in Fernandina Beach, Florida. He was 54. Simone led a turnaround of USA but took a leave of absence in April 2015 after being diagnosed with lung cancer; he later resigned in July 2015.

Joseph Stanford “Sandy” Boone, 93, of Springdale, a businessman and real estate developer, died on March 31. Boone, the founder of Original Homes Inc., helped organize the Northwest Arkansas Homebuilders Association and served two years as president. He was a director of the National Association of Home Builders for eight years.

April

Raymond Hoyt “Ray” Thornton Jr., 87, a former Arkansas Supreme Court justice and congressman, died April 13. Thornton served Arkansas as attorney general from 1971-73, U.S. representative for Arkansas’ 4th District from 1973-79 and U.S. representative for Arkansas’ 2nd District from 1991-97. He was a state Supreme Court justice from 1997-2005, and he was president of two Arkansas universities: Arkansas State University from 1980-84 and the University of Arkansas from 1984-90. Thornton was the nephew of brothers Witt and Jack Stephens, who founded Stephens Inc. of Little Rock.

Bettye Caldwell, of Little Rock, a pioneer in the field of early childhood development, an educator and a member of the Arkansas Women’s Hall of Fame, died April 17. She was 91. Caldwell, whose research led to the creation of Project Head Start, also was a professor of education at the University of Arkansas at Little Rock in 1974, becoming a Donaghey Distinguished Professor in 1978, and in 1993, she became a professor of pediatrics at the University of Arkansas for Medical Sciences.

Scott Hembree, 55, of Rogers, CEO of Global Dental Technologies in Bentonville, died April 23. Hembree, a Fort Smith native, was a former owner of Trans-American Tire and Trans States Lines in Fort Smith and Sugar Hill Farm in Paris. Hembree was the son of the late H.L. Hembree III, who served as chairman and CEO of Arkansas Best Corp., now ArcBest Corp.

Henry Ford Trotter Jr., a prominent Pine Bluff businessman, died April 25. He was 78. He joined his father in the family business, Trotter Ford, in the 1960s and worked there until his death, serving as chairman. The company, now Trotter Auto Group, expanded to own a number of automobile dealerships.

John Lisle, 77, founder of Lisle Rutledge Attorneys in Springdale, died April 27. Lisle, a trial lawyer, also served in the Arkansas Senate in 1981-83. “To many, being a lawyer was a job,” said his law partner, Donnie Rutledge. “To John, it was something much more. Something that is hard to put into words, but is fundamental, authentic and profound.”

Herbert “Herbie” Byrd, 87, of Little Rock, died April 29. Byrd was a longtime radio broadcaster who covered the Central High Crisis and politicians ranging from Orval Faubus to Bill Clinton.

May

Gus “Buddy” Blass II, 92, a Little Rock businessman and philanthropist, died May 8. Blass began his business career at the Gus Blass Co., leaving to start Capital Savings & Loan in 1961, which grew to almost $100 million in assets before it was sold in 1980. He founded Capital Properties in 1970. Blass served on the board of trustees of the University of Arkansas at Fayetteville from 1981 to 1991.

Michael Allen Lasiter, 50, founder of Redstone Construction Group of Little Rock, died May 31. Lasiter expanded his paving and asphalt company into many areas, including building, recycling, excavation, real estate and the quarry business.

Neal Lance Gildner of Bismarck, owner of Gildner Autogroup in Arkadelphia and noted for his generosity to local nonprofits, died May 29. He was 60.

June

Gary DiGiuseppe, 60, a longtime central Arkansas journalist and newscaster, died June 1 in a vehicle accident. DiGiuseppe was the morning newscaster on “First News With Kevin Miller” on KARN.

Paul Barton, 58, of Arlington, Virginia, a journalist who once was Washington Bureau chief for the Arkansas Democrat-Gazette and whose career included covering Bill Clinton and interviews with President George W. Bush, died June 6.

Wayne Dowd, 74, of Texarkana, a former state senator best known for his work on the Arkansas juvenile justice code, died June 16. Dowd, who served in the Senate from 1978 to 2000, “inaugurated the juvenile court system in Arkansas,” said Tom Cabaniss of Texarkana, a retired CPA long involved in state and local politics. “He was big into judicial code and having a whole separate code for juveniles rather than just hardened criminals.”

Homer Connell, 73, founder of the popular plate lunch restaurant Homer’s Restaurant in Little Rock, died June 17.

Donna Kelley, a KARN radio reporter and newscast anchor, died June 26. She was 66. Kelley, who worked at KARN for 16 years, coming to Little Rock from Orlando, Florida, was remembered as a “consummate professional” and hailed for her journalistic integrity.

July

Don Soderquist, 82, of Rogers, a longtime executive with Wal-Mart Stores, died July 21. He started with Wal-Mart in 1980, serving as an executive vice president. In 1988, Soderquist became chief operating officer and vice chairman, retiring from those positions in 2000. He was inducted into the Arkansas Business Hall of Fame in 2010.

Randy Alexander, a leader in residential real estate in Arkansas who owned McKay & Co. Realtors, died July 22 in Little Rock. He was 71. Alexander joined McKay & Co. as a real estate agent when the company was founded in 1972. In 1980, he became president, and two years later, he purchased the firm’s residential sales division. He retired in 2010, when he closed the firm.

Sheilla Lampkin, 70, a member of the Arkansas House of Representatives from Monticello, died July 23. Lampkin, a retired schoolteacher, was vice chairman of the House Education Committee.

August

S. Gene Cauley, 48, of Hot Springs, once a high-profile class-action lawyer in Little Rock before pleading guilty to stealing millions from a client trust account, died Aug. 12.

Ronald Gene “Ronnie” Baldwin, the executive director of the Arkansas Sheriffs’ Association, died Aug. 28. He was 63. Baldwin, a longtime law enforcement officer, also served five terms as Cross County sheriff, retiring in 2008.

September

Pat Walker of Springdale, a philanthropist and co-founder of the Willard & Pat Walker Charitable Foundation, died Sept. 3. She was 97. Walker had been inducted into the Arkansas Women’s Hall of Fame just a few days earlier, on Aug. 25. Walker’s philanthropic contributions were enormous, and a number of institutions in Arkansas are named for her, among them the Pat Walker Theater at Springdale High School, the Pat Walker Health Center on the University of Arkansas campus at Fayetteville and the neonatal intensive care unit at Arkansas Children’s Hospital.

Andrew Jackson “Andy” Lee III, who served seven terms as Benton County sheriff from 1989-2002, died Sept. 5. He was 68. Lee also served as a Bentonville City Council member and as the executive director of the Bentonville/Bella Vista Chamber of Commerce. Lee was living in Florida but died while visiting relatives in Bentonville.

Pat M. Riley Sr., 92, a Little Rock businessman who invested in nursing homes and opened a number of health clubs, died Sept. 6. In the 1980s, Riley opened four clubs that evolved into the Little Rock Athletic Club, the Little Rock Racquet Club, the North Little Rock Athletic Club and the Downtown Athletic Club. Riley was a member of the Arkansas Tennis Hall of Fame and the Arkansas Swimming Hall of Fame.

Dr. W. Martin Eisele, 94, of Hot Springs died Sept. 14. Eisele, one of the first board-certified surgeons in the state of Arkansas, also served as president of the Hot Springs Chamber of Commerce and was instrumental in promoting a new Hot Springs Community College.

Dale Freeman, Lawrence County judge, died Sept. 17 at 75. He was instrumental in a successful special countywide sales tax election last fall to pay for a new county jail.

Eugene John Post Sr., founder of Mount Bethel Winery in Altus, died Sept. 18. He was 88. Post served on the Franklin County Quorum Court for 42 years.

October

Maurice Jennings, a prominent Fayetteville architect and partner of famed Arkansas architect E. Fay Jones, died Oct. 10. He was 68. Jennings worked on many noted projects, including Thorncrown Chapel in Eureka Springs and the Mildred B. Cooper Memorial Chapel in Bella Vista.

Ron Loveless, 73, a former Wal-Mart and Sam’s Club executive, died Oct. 17. Loveless started at Wal-Mart as a store stocker and worked his way up through the company until Sam Walton, Wal-Mart’s founder, picked him to head the new Sam’s Club division. Loveless retired from the company in 1986.

Ray Gosack, former Fort Smith city administrator, died Oct. 21. He was 58. He worked for the city for 20 years in a number of roles. During his tenure, the city developed its first comprehensive plan, and Gosack was instrumental in the revitalization of downtown Fort Smith and the redevelopment of Chaffee Crossing.

November

Allen Weatherly, 64, who led the Arkansas Educational Television Network through 15 years of awards and online expansion, died Nov. 1. Under Weatherly’s leadership, the Conway-based network of PBS member stations increased educational services, including online professional development for teachers, produced programming and training for Ready to Learn, the network’s children’s media service, and archived the memories of Arkansas’ World War II veterans.

John “Skip” Gregory, 79, a Rogers businessman active in city affairs, died Nov. 7. Gregory, who had owned Gregory’s Menswear in Rogers, served as a city councilman, interim mayor for three months and member of the Rogers Planning Commission.

Reginald D. “Reggie” Marshall, 58, of Little Rock, an interior designer and co-founder of Marshall Clements Interiors & Antiques, died Nov. 30.

December

Christen Franke, an owner and operator with her family of Franke’s Cafeteria in Little Rock, died Dec. 4. She was 37.

Donna Galchus, founding member of Cross Gunter Witherspoon & Galchus PC of Little Rock, died Dec. 4. She was 70. Galchus practiced labor, employment and immigration law for the firm, founded in 1997.

Ron Pierce, 81, of Mountain Home, the founder of Bass Cat Boats and a former member of the Arkansas Game & Fish Commission, died Dec. 4. Pierce was Mountain Home’s mayor from 1976 to 1986 and served on the Game & Fish Commission from 2006-13.

Edward Eugene “Gene” Lewellen Sr., of Little Rock, the owner and operator of Terry’s Finer Foods in Little Rock’s Heights neighborhood for more than 30 years, died Dec. 5, 2016. He was 83.

Beth Ward Haynie, 74, a fixture on Little Rock television for more than 37 years, died Dec. 8. Known as Beth Ward, she had hosted the noon newscast of KTHV, Channel 11, which she had helped launch in 1987 as “Arkansas Today,” and the morning show. She was also widely known for her weather reporting and for hosting “Dialing for Dollars” on KARK, Channel 4, where she began her television career in 1968.

Donald Corbin, 78, of Little Rock, a retired Arkansas Supreme Court justice, died Dec. 12. Corbin also served in the state House of Representatives and on the Arkansas Court of Appeals. He was elected to the state Supreme Court in 1990, retiring at the end of 2014, and participated in a number of high-profile decisions, writing decisions that struck down a ban on gay foster parents and a law requiring voters to show photo identification.

‘He Wasn’t Unkind, but He Was a Crook’ - Best Quotes of 2016

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“He wasn’t unkind, but he was a crook.”

David Hoffman of Santa Cruz, California, reflecting on his business dealings with accused serial fraudster John Rogers of North Little Rock


“I always try to remember what my dad told me years ago: ‘Don’t ever forget what it’s like to sit on the other side of the desk.’”

Darwin Hendrix, chairman and CEO of the Bank of Delight (Gurdon Girding for More Bank Competition)


“He said he was looking for pine trees, and I said, ‘You’re talking with the right person because we have a lot of those in Arkansas.’”

Mark Hamer, director of business development in Asia for the Arkansas Economic Development Commission, on a 2010 breakfast conversation with Hongxin Li, chairman of Shandong Sun Paper Industry JSC Ltd. that led to a billion-dollar industrial announcement for Clark County in April 2016


“Everyone says that if Batman had a mower, it would be a Spartan.”

Robert Foster, founder of Intimidator Inc. of Batesville, maker of Spartan zero-turn lawn mowers


“It was something that devastated me. It was the hardest thing I’ve ever gone through in my life.”

Robert Foster, describing his split with former business partner Phil Pulley, co-founder of Bad Boy Mowers of Batesville, now a rival of Foster


“I grew up in the Holden Avenue Church of Christ in Newport, Arkansas. Jesus loves all the children, red and yellow, black and white. That’s it. That’s my politics.”

— Little Rock lawyer David Couch, who uses initiated acts to liberalize Arkansas law


“David is a stickler for the law. Whatever one might say about David Couch, he is a defender of the law. He believes in it. He never hides behind it. But he thinks it’s a tool for good.”

Marsha Scott, a political and organizational consultant discussing Couch’s initiative efforts


“Alice leaning on us pretty hard helped. She flew us up there several times. We really did not want to go to Bentonville.”

— Dallas restaurateur Shannon Wynne, describing how Alice Walton persuaded him and his business partners to locate a Flying Fish restaurant in Bentonville


“I don’t want to be a chain and I don’t want to be a Chili’s. I want to have a little neighborhood corner restaurant. I like funky.”

David Stobaugh, co-owner of Stoby’s Restaurant in Conway, which is being rebuilt after a fire in March


“It’s our home. It’s always great to come home. We feel like being headquartered in Little Rock has been an advantage for us in a lot of ways.”

Warren Stephens, CEO at Stephens Inc. (Business Icons: Warren Stephens Steers Company Into Growth, Expansion)


“I don’t have anything before me that the plaintiff put a gun to the defendant’s head and made him sign the note.”

— Yell County Circuit Judge Terry Sullivan before granting a $2 million summary judgment against Lex and Ellen Golden of Little Rock, who personally guaranteed to repay the loan to Chambers Bank of Danville


“I always tell people: We’re not making widgets here. We’re making a good time.”

Michael Marion, general manager of Verizon Arena in North Little Rock (Verizon Arena On Track for Biggest Revenue Year Ever)


“Running a restaurant is exactly like running a political campaign. Your clientele are your constituents. You’ve got to communicate with so many different kinds of people from so many different socioeconomic backgrounds and get along and delegate and make quick decisions. You are in politics, sister. You may not realize it, but you are.”

— Little Rock Director Kathy Webb’s advice to Trio’s co-owner Capi Peck, who ran successfully for the Little Rock Board of Directors


“You take people with innovative-type ideas and you get innovative-type results. That is innovation alley over there. During the next 20 years, it is going to become the next redevelopment hot spot.”

Margaret McEntire, founder and former owner of Candy Bouquet International, on the growing wave of commercial makeovers along Sixth Street east of Interstate 30 in Little Rock


“If you wade into the water, whatever is in that water is on your leg.”

Matthew Davidge on buying the former Equity Broadcasting/Soul of the South facility in west Little Rock and the historical controversies associated with both endeavors


“We’re one of the very few airports that set out with that goal and made it.”

Ron Mathieu, executive director of the Clinton National Airport, on becoming debt-free entering 2016


“It was a cage match and it didn’t disappoint from a spectator’s point of view.”

Bob Clausen, KARK anchor, describing Donald Trump’s election night victory over Hillary Clinton


“The only time I was scared [during the 2008-09 financial crisis] was when I remembered Mack had got me into the car business.”

Robert L. Johnson, billionaire founder of Black Entertainment Television, joking about his automotive partnership with Mack McLarty


“Four in 10,000 customers: Even the EPA lets that ride sometimes as acceptable levels of cancer.”

Pat Costner of Eureka Springs, who generates her own solar power, speaking to the state Public Service Commission on the tiny number of current “net metering” customers served by Arkansas utilities


“Yes, Don Hale and I have been conspiring for years and we finally figured out how to dominate the north-central Arkansas financial industry.”

Kirby Williams, joking about the news that he and Hale had gone to work for separate banks after decades of running their own advertising firms in Hot Springs and El Dorado.


“I had only a dream and determination. And something else that was incredibly valuable — my first client.”

Elise Mitchell on starting her Fayetteville PR firm, representing Promus Hotel Corp.


“Newspapers are going to be around for a while. But they’re going to be a premium product for a premium price.”

— Arkansas Democrat-Gazette Publisher Walter Hussman Jr. (Business Icons: Walter Hussman Delivers Innovation to Newspaper Industry)


“The old model was essentially building a very expensive factory to process expensive newsprint paper and sending tons of it out daily by an expensive transportation system only to be looked at once and thrown away.”

— Former Arkansas Gazette Editor Carrick Patterson, describing the daily newspaper business model he now sees as moribund


“I am struck by what we were like 10 years ago, like lemmings about to go off a cliff. We were blissfully ignorant and just thinking about return.”

Rick Adkins, president and CEO of Arkansas Financial Group Inc., discussing the pre-2008 housing bubble


“I saw all those records at the Rose Law Firm, and there was nothing there to be secretive about. Maybe [Hillary Clinton] was embarrassed for people to know the piddling little stuff she was doing for her legal fees.”

— Little Rock journalist Ernest Dumas on the presidential candidate’s penchant for privacy, a trait that dogged her from her Arkansas years to her defeat last month


“This is exactly the kind of project they want to invest in. It’s in the U.S., a stable country, and it’s in an area that needs development, Jefferson County.”

Roger Williams, CEO of Energy Security Partners, describing equity funds’ reaction to his plans to build a $3.5 billion plant to turn natural gas into liquid fuel north of Pine Bluff


“My path was anything but typical. I was a single mother before I started working. I was going to be the best receptionist I could possibly be.”

MaryEmily Slate, on how she rose from being a 19-year-old without any college to become a vice president and plant manager at Nucor Steel


“I couldn’t face it; I should have faced it. If I had faced it, I probably wouldn’t be sitting here.”

Dennis Smiley Jr., the former president of Arvest Bank’s Benton County market, describing how his personal financial habits led him to commit bank fraud


“I don’t know how he got up and went to work at Arvest Bank.”

— U.S. District Judge P.K. Holmes III before sentencing Smiley to 97 months in federal prison for bank fraud


“The future is very bright. It darn well better be; I own a lot of stock.”

Robert Young after retiring as chairman of the ArcBest board of directors after reaching 75


“He’s not going anywhere for three years. He’s going to be on speed dial for me.”

Tom Hayes on Donnie Smith, whom he will replace as CEO of Tyson Foods on Dec. 31


“This gamesmanship is improper in any case. That it has become standard practice for some Respondents only further convinces the Court that this conduct is an abuse of the judicial process.”

— Chief U.S. District Judge P.K. Holmes III on attorneys involved in a controversial class-action case


“We have a huge problem with North College: It looks like shit.”

— Builder Mark Zweig on his quest to rehabilitate one of Fayetteville’s main corridors.


“You don’t know whether to shake his hand or lick his face. My son’s 5 and he looks older than Doug McMillon.”

James Corden, host of the Wal-Mart shareholders extravaganza, about the company’s baby-faced CEO


“We planned a lot of things this morning. That was not one of them.”

— Walmart CFO Brett Biggs after Corden gave him a long hug and a kiss after introducing him at the shareholders meeting


“At my advanced age, it was going to be short term.”

Tom Glaser, 66, about his six-month tenure as interim CEO of USA Truck Inc. of Van Buren


“The goal is not to create winners and losers. The goal is statewide productivity increase.”

Maria Markham, director of the state’s Department of Higher Education, on the state’s new performance-based funding formula


“It’s a happy day for me. This is more than a gift; this is about an investment.”

— Tyson Foods Chairman John Tyson after his family and company donated $15 million to the Arkansas Children’s Northwest


“Our focus now is to find someone to come fill that void.”

— Gentry Mayor Kevin Johnston after the closing of all Walmart Express stores left his city without a grocery


“My clients are very proud of that settlement.”

— Attorney John Elrod of Fayetteville about plaintiffs’ attorneys, including John Goodson of Texarkana, who received $1.85 million from a controversial class-action settlement while only 4 percent of the class members filed a claim


“The fact of the matter is that the parties still unapologetically defend their right to silently forum-shop away from a judge that would scrutinize their settlement and safeguard absent class members’ interests.”

Ted Frank, director of the Competitive Enterprise Institute’s Center for Class Action Fairness (Class-Action Watchdog Says Sanctions Should Stand Against Attorneys)

Arkansas Business Year in Review: Best & Worst of 2016

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Worst 1-2 Banking News

The Lex Golden family steered a second bank holding company into bankruptcy court in July. The Chapter 11 filing for Allcorp Inc., parent company of Community State Bank in Bradley (Lafayette County), was followed two months later by regulators taking over Allied Bank of Mulberry (Crawford County).

The insolvency of Allied came 30 months after the Goldens took the $66.3 million-asset lender’s parent company, Acme Holding Co., into bankruptcy court.

Best Corporate News

Bank of the Ozarks Inc. announced the start of a new Little Rock corporate campus to accommodate its growing staff to support its expanding operations.

First-phase construction of a 180,000-SF building will nearly triple its existing office capacity. Occupancy at the current 92,000-SF headquarters was forecast to max out at 269 next year.

Worst Fraud Prosecution

The U.S. attorney’s office couldn’t prosecute a dead man, so they tried to convict his underlings. That was the backdrop for the government’s unsuccessful case against former One Bank executives Michael Heald and Brad Paul.

With the March 2013 death of One Bank’s owner, Layton “Scooter” Stuart, Uncle Sam went after his executive team.

The government went ahead with an unconvincing case against Heald and Paul after the duo refused to buckle to plea bargain pressure while maintaining their innocence and cooperating with prosecutors.

Ironic twist: Uncle Sam granted immunity to the man who most helped Stuart operate One Bank as his own personal piggy bank: Tom Whitehead, former chief financial officer.

Former Senior Executive Vice President Gary Rickenbach pleaded guilty to a much reduced charge of failing to report a crime and drew a sentence of probation. Only Alberto Solaroli, the Florida resident whose fraudulent $1.5 million loan from One Bank was the basis for all the charges, went to prison and only for a year.

Best Restaurant Resurrection

That looks to be Stoby’s, the beloved Conway restaurant heavily damaged by fire in March. The restaurant was razed, and now David Stobaugh, who owns the restaurant with his wife, Patti, is rebuilding at the same site and hopes to be open in spring 2017. Facebook reactions to the fire revealed heartbreak: “Will there be a chance to give back to Stobys? As in volunteering help to clean up, remove debris, etc.? If so, please post. I would volunteer in a heartbeat.”

Best Preview

Months before her use of a private email server contributed to Hillary Clinton’s presidential loss, journalist Ernest Dumas summed up her most persistent damaging trait.

“She always said things were nobody’s business,” Dumas told Arkansas Business, linking her “obsession” with privacy and secrecy to imbroglios that plagued her starting in her days as Arkansas’ first lady. Whitewater, Travelgate and the stolen emails were all examples of secrecy-related woes.

Dumas had examined the Rose Law Firm files on Madison Guaranty Savings & Loan, the thrift that failed under Jim McDougal in 1989. Madison became an issue in Bill Clinton’s 1992 campaign and a subject in the Whitewater investigation later.

“I saw all those records at the Rose Law Firm, and there was nothing there to be secret about,” Dumas recalled. “Maybe she was embarrassed for people to know the piddling little stuff she was doing for her legal fees.”

Worst Mix Heard on Air

After years of reporting on the Razorbacks, sportscaster Aaron Peters resigned from KNWA-TV in Rogers and KARK-TV in Little Rock in October after saying he had mixed prescription medication with alcohol and appeared briefly on the air.

Peters announced his resignation in a posting on Facebook, saying he had been “asked to step down.” On Oct. 12, he was seen briefly as the sports segment began, slurring his words and seeming intoxicated. The cameras cut away, and Peters said on his video post that he had “made a poor, poor judgment decision,” mixing prescription medication with alcohol between shows.

Peters concluded that it was time “to ponder what to do with the next chapter of my life.”

Best Political Activist

David Couch is a Little Rock lawyer who’s the force behind a number of voter initiatives in Arkansas that have sought to liberalize state law. Among them is this year’s successful Arkansas Medical Marijuana Amendment, which voters approved Nov. 8 by a margin of 53 percent to 47 percent. “The initiative is pure democracy,” Couch says.

Worst Source

Jason Shelby told a remarkable tale. He served 17 years in the Army, was shot three times in Afghanistan and was helped through recovery by driving for the ride service Uber. As odd as it sounds, the Bentonville resident told Arkansas Business in May, the first ride he gave was to a University of Arkansas student from Afghanistan, and the rider’s warm thanks for Shelby’s service had eased his anxiety. “From that point, I knew I was going to be OK.”

He went on to earn a master’s degree at UA, he said.

The only trouble is that the Army could find no record of a veteran by Shelby’s name with such a war record, and the UA could find no record of a degree being awarded to him. Shelby stood by his account of his service, but did not protest after an editor’s note on the discrepancies was published.

Worst Argument

Even Dennis Smiley Jr. rejected his own lawyer’s attempt to blame his victims during his sentencing hearing in January after pleading guilty to bank fraud.

W.H. Taylor of Fayetteville had argued for leniency in a sentencing memorandum by saying that banks should have been more vigilant in preventing Smiley’s scheme, which amounted to 55 fraudulent loans for approximately $6.3 million. U.S. District Judge P.K. Holmes III called it a “somewhat incredulous argument” and Smiley took full responsibility for his crime on the stand.

Holmes sentenced Smiley to 97 months in prison.

Best Buyback

John James started his career as an entrepreneur with Scrub Shopper, an online seller of medical apparel.

Scrub Shopper became one of several subsidiaries under Acumen Brands, the online retail company James founded in 2009. James left Acumen Brands in 2015 to start Hayseed Ventures, which partners with startup companies to help them become successful businesses.

In March, James bought Scrub Shopper back from Acumen Brands for at least $1 million — James declined to give the exact price. James hopes the still-profitable Scrub Shopper will be the foundation for Hayseed’s growth.

“We want to be the largest reseller of scrubs in the world,” James said. “That’s not a joke. That’s literally our plan.”

Worst Turnover

Dallas Cowboys running back Darren McFadden sued his former family friend and financial adviser, Michael Vick of Pulaski County. The Arkansas Razorbacks’ former star running back had given power of attorney to Vick. That decision backfired. McFadden, in the lawsuit, accused Vick of “gross incompetence, self-dealing and outright theft” of more than $15 million. Vick, who shares his name with a former NFL quarterback, has denied the allegations. The case is pending.

Best Startup Price

Wal-Mart Stores Inc. said in August it would spend $3.3 billion to buy the startup online retailer Jet.com of Hoboken, New Jersey.

Launched in 2015, Jet.com was a members-only online marketplace that was founded by Marc Lore, who was a co-founder of Quidsi, which is the parent company of Diapers.com. When Wal-Mart announced the purchase, few people had ever heard of Jet.com. Some retail watchers, though, praised the move and predicted it would be the spark the Bentonville retailer needs to boost its online sales. Others weren’t so sure. “It looks very irrational and desperate,” said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York.

Worst Exit Strategy

Three middle-aged women who had all worked for First National Bank of Lawrence County for decades smuggled out almost $4 million in cash between 2005 and 2015, covering up the shortage with timely transfers that depended on advance notice of routine audits. The only plan for getting away with it was apparently the suicide of one, who would then be blamed by the surviving conspirators — but her suicide attempt failed.

Peggy Sutton, Brenda Montgomery and Cindy Tate all received 51-month sentences after pleading guilty to bank fraud in U.S. District Court and were each ordered to pay $1.3 million in restitution.

Best Lawyering

U.S. District Judge Kristine Baker sentenced Montgomery and Tate to 57 months in prison for their embezzlement, and Sutton would have received the same sentence had her lawyer, Tim Dudley of Little Rock, not questioned a discrepancy between the plea agreement with federal prosecutors and the pre-sentencing report by the federal probation officer.

As a result, Sutton got a 51-month sentence and Baker similarly reduced the sentences for Montgomery and Tate.

Worst Transparency

When she was running for state auditor in 2014, Andrea Lea said, “Transparency should be the foundation of any public office.” But that was before she was sworn in.

While Arkansas Business was reporting on Lea’s granting of a no-bid contract to inexperienced, overpriced lawyers recommended by campaign contributor John Goodson, one of her former staff members alerted a reporter to the existence of emailed notes about staff meetings with lawyers who wanted the job.

Those emails had not been produced in response to the first Freedom of Information Act request because George Franks, Lea’s chief of staff during her first six months in office in 2015, took the notes and sent them from his personal email address to her personal email address, as she requested.

The emails were then released, and Arkansas Business reported assurances by spokesman Skot Covert that Lea used her personal email very little. That prompted Franks to produce text messages in which Lea repeatedly instructed him to use his private account to send emails about official state business to her private email address — instructions that continued for months after she took office in January 2015.

After those text messages surfaced, Lea said in an email to Arkansas Business, “I made a statement I believed was accurate but based on the texts, it appears I misspoke. … Moving forward, I am implementing a new communication policy for the office to avoid any appearance of impropriety.”

Best Cautionary Tale

On one side of a dispute is an ex-con who said he was attempting to improve his life. On the other side is a couple who went to his church. Both Mike and Gina Fullerton and ex-con Kristian Nelson claim to have been victimized by the other.

The dispute centered on Pinnacle Valley Road west of Little Rock, where Nelson grew up and the Fullertons live now, and where the three hoped to turn a former yoga studio into a restaurant and build an office building next door. The Pinnacle Valley Restaurant opened in 2015, but the office building never got past the slab.

Nelson sued the Fullertons and alleged they used his status as a convicted felon to keep him from getting an ownership interest in their joint business venture. The Fullertons denied the allegation and sued Nelson for filing a false lien. Both cases are pending.

Worst Halftime Speech

We don’t know what Bret Bielema and his coaching staff told the Arkansas Razorbacks while in the locker room with a 24-7 lead over the Missouri Tigers on Nov. 25.

Whatever the gridiron spiel, it should be banished from his playbook, never to be uttered again.

The worst team in the SEC East (2-6 and 4-8 overall) went on to win 28-24 when the Hogs failed to score in the second half.

Perhaps committing the halftime speech to paper with a cathartic burning and burial ceremony is in order.

From the Political to the Criminal: Top 10 Arkansas Business Stories of 2016

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No. 1: Trump Triumphant

In a presidential election like no other, Donald Trump proved all the naysayers wrong.

He overcame 16 Republican primary opponents and Democrat Hillary Clinton, the first woman atop a major-party ticket but also a veteran politico with a gold-plated resume married to one of the best retail politicians the United States has ever produced.

And, as the song says, Trump did it his way.

He was an unconventional candidate, to say the least. Remarks — on Mexicans, immigrants, an American POW, a disabled journalist, the family of a U.S. soldier killed in the Iraq War, Muslims, women — any one of which would have sunk any other candidate only seemed to reinforce his popularity among many.

And revelations — and Trump’s acknowledgement — that he’d avoided paying income taxes for years, along with allegations of shady business dealings and sexual assault, also failed to sway supporters.

Trump’s ideology is flexible and it veers from traditional Republican stands. His views have about-faced on immigration, foreign policy, health care, abortion. However, on a couple of issues he’s remained fairly firm: trade and entitlements. Trump supports international tariffs and has said he wouldn’t cut Social Security, Medicare or Medicaid.

What Trump, a real estate mogul, did that few other presidential candidates have been able to do in recent elections is connect with the crowd. The star (and executive producer) of the reality TV program “The Apprentice” and a consummate showman, Trump exploited his show business experience to successfully sell himself and his campaign, employing the slogan “Make America Great Again” and encouraging the use of simple, memorable chants like “Build the wall” (on the U.S. border with Mexico) “Lock her up” (Hillary Clinton) and “Drain the swamp” (the Washington power structure).

Trump also took full advantage of social media in the form of Twitter, bypassing media outlets — and political handlers — to reach out directly to voters, a practice that @realDonaldTrump has maintained since the election.

His supporters consider Trump an alpha male straight-shooter unconcerned with political correctness who is too rich himself to be beholden to oligarchic special interests. Trump understands his power, noting in January: “I could stand in the middle of Fifth Avenue and shoot somebody and I wouldn’t lose voters.” And though one hopes his theory is never tested, he’s probably right.

Although much has been made of Trump’s defying almost all polling predictions to win the Electoral College and, hence, the election, he trailed Clinton in the popular vote, 62.8 million to her 65.4 million votes, more than President Barack Obama received in 2012. But Trump won in key states with big electoral totals: in the industrial states of Michigan, Wisconsin and Pennsylvania, states hit particularly hard by manufacturing’s decline.

In Arkansas, it was no contest at all. Trump got 60.6 percent of the vote in the November General Election; Clinton, who spent almost a dozen years as the state’s first lady when Bill Clinton was governor, 33.7 percent.

In the Arkansas General Assembly, the election gave Republicans an extra nine seats in the 100-member House, and after the election, three Democrats switched parties, giving the GOP a total of 76 in the House. Republicans also gained two seats in the 35-member Senate for a total of 26.

Victory has a way of reordering the universe and wiping slates — and memories — clean.

In February, Republican Gov. Asa Hutchinson told a Washington audience that the 2016 presidential election was a new phenomenon: “The entrance and the dominance of Mr. Trump on the stage and the way he really consumes the media is extraordinary.” The governor added that “the frustrations with Washington and the establishment has just created a different dynamic than we’ve ever seen before. … All of the criteria that we’ve used to evaluate candidates probably could be thrown out the window this year.”

A few days later, Hutchinson endorsed U.S. Sen. Marco Rubio of Florida for the GOP presidential nomination, saying it was “up to Arkansas to stop the Donald Trump show. The next generation of

conservatives cannot allow Donald Trump to take everything we stand for and throw it away.”

By March, with Trump winning Arkansas’ Republican primary, Hutchinson was saying he’d support Trump if he became the nominee.

By mid-June, after meeting with Trump, the governor said promoting conservative causes was more important than any difference he might have with the businessman, adding, “Anybody’s presidential who’s elected president.”

And by July, speaking before the Republican National Convention, Hutchinson proclaimed, “Donald Trump is the right leader for our time.”

The transition of President-elect Trump to President Trump continues with hardly less drama than the campaign: Calls are circulating for a congressional investigation of a Central Intelligence Agency assessment that Russian hacking was a deliberate effort to tip the election to Trump. Trump disagrees with the CIA’s findings.

The American electorate wanted change. We got it.

No. 2: Health Care in Transition

2016 was a rocky year for health care administrators in Arkansas, and though they worried about the future of Medicaid funding at the start of the year, they pushed forward with major construction projects throughout the state.

Uncertainty bedeviled the start of the year, with hospital administrators unsure if Arkansas’ hybrid Medicaid expansion plan, which had improved the bottom lines of their institutions throughout the state, would continue. Dan Rahn, chancellor of the University of Arkansas for Medical Sciences, warned in April that if the Medicaid expansion wasn’t funded, losses at UAMS could increase by tens of millions of dollars.

It all goes back to the Affordable Care Act, which, beginning in 2014, had expanded health insurance coverage in the United States. Although states had the option of expanding Medicaid using federal money, many states rejected that money. Arkansas, however, created the private option, which used federal Medicaid expansion money to buy private health insurance for Arkansans who earn too much for traditional Medicaid, but not enough to be eligible for federal tax credits on health insurance.

The federal government is paying for all of the cost of the expansion through 2016 and then will gradually decrease its share to 90 percent, leaving the state to pay 10 percent.

Gov. Asa Hutchinson’s plan, Arkansas Works, called for making modifications to the private option, but it still used federal money to buy insurance for the poor.

Arkansas Works faced two hurdles: The Legislature had to approve it in a special session. If it survived there, it then needed a supermajority vote of 75 percent in the state House and Senate in order to receive funding. It overcame both obstacles. Starting Jan. 1, the private option will be called Arkansas Works.

National politics, however, brings further uncertainty.

One of the many campaign promises President-elect Donald Trump made was that he would repeal and replace the Affordable Care Act, which he called a “total disaster.”

Across the country, monthly premiums for private insurance sold through government-run exchanges are ballooning an average of 25 percent starting in 2017. In Arkansas, the premiums on policies sold through the exchange to about 60,000 Arkansans are also climbing, an average 10 or 11 percent in 2017.

What’s more, several insurance companies have turned their backs on Obamacare, saying the exchanges are not profitable. In 2016, UnitedHealth Group said it wouldn’t sell insurance on the exchanges in 34 states, including Arkansas. And QualChoice Life & Health Insurance Co. of Little Rock is withdrawing coverage in certain counties in the state.

After November’s election, Hutchinson remained pragmatic. He said he would ask the Trump administration to approve even more changes to the Arkansas Works program, which covers more than 300,000 Arkansans, that the Obama administration had allowed.

Arkansas’ hospital landscape also was transformed in 2016. In September, the $150 million Baptist Health Medical Center-Conway began taking patients. And St. Bernards Medical Center in Jonesboro has started a four-phase, multiyear $130 million construction project.

In northwest Arkansas, Mercy Northwest announced in April it would spend $247 million over five years on projects that included expanding its Rogers campus and building clinics. Arkansas Children’s Hospital continued with its $167 million hospital project in Springdale, which was announced in 2015 and which is expected to open in January 2018. Washington Regional Medical System’s $65 million Women & Infants Center started taking patients in November.

Opening new facilities doesn’t necessarily mean profits will follow. In November 2015, CARTI opened its $88 million cancer center in west Little Rock. The nonprofit cancer treatment center experienced several one-time events that caused financial problems, and in 2016 it fell below the required debt-service coverage ratio on the $49 million bond issue that was used to build the four-story center. In September, Fitch Ratings Inc. of Chicago, which provides the credit rating for CARTI, lowered its rating on CARTI’s bond from BBB+ to BBB-, which is the lowest investment-grade rating. Fitch’s outlook remained negative.

No. 3 Big Projects Make the News

Steel in northeast Arkansas and wood in the southwest supplied raw material for big economic development news in 2016. Natural gas fueled big dreams in Pine Bluff.

Big River Steel began production at a $1.3 billion plant in March, planning to employ 425 workers eventually. State officials said 100 additional workers would be employed by businesses associated with the plant, the largest private investment ever in Arkansas. Nucor Corp. said it would add a $230 million cold mill to its Blytheville operations, predicting 100 new jobs and bringing Nucor’s payroll to about 1,800 area workers.

Meanwhile, nearly 250 miles away, officials announced plans for a $1.3 billion pulp mill near Arkadelphia expected to employ 250 workers by 2020. Shandong Sun Paper Industry of China will operate the plant, which is expected to pump up to $100 million a year into the economy, on 1,000 acres. As many as 1,000 additional jobs in the timber industry are expected in the plant’s supply chain.

What could be the state’s largest economic development endeavor ever is developing north of Pine Bluff. Energy Security Partners of Little Rock, led by Roger Williams and Arkansas figures Wesley Clark and Rodney Slater, plans a massive $3.5 billion plant for turning natural gas into diesel and jet fuel. A peak construction workforce of 2,700 and 225 long-term jobs are projected. The site was confirmed in September after the Jefferson County’s economic development team secured 1,100 acres with taxpayer money and leased the land to ESP, which is at work securing financing.

In October, Suzhou Industrial Park Tianyuan Garment Co., which makes clothing for Adidas, agreed to put a clothes factory in Little Rock, a $20 million commitment expected to bring 400 jobs. The project represents the first apparel company moving manufacturing from China to the United States, Gov. Asa Hutchinson said.

Intimidator Inc. of Batesville, which makes mowers and utility vehicles, revealed plans for a $12 million expansion to add 400 full-time employees over four years, giving it a workforce of more than 500. FMH Conveyors of Georgia hailed a $12.5 million material-handling factory in Jonesboro, creating 110 jobs.

Northwest Arkansas and the Fort Smith area were job-creation hotbeds, led by Mercy Northwest Arkansas’ announcement of a $247 million expansion and 1,000 new jobs by 2021 at its Rogers hospital and surrounding clinics. Simmons Foods Inc. of Siloam Springs planned to add 100 jobs at leased space in Fort Smith; Bekaert, maker of steel cord for tires, announced increased plant capacity for 100 new jobs; P.H. Glatfelter Co. announced a $12.5 million specialty paper and fiber facility, creating 83 jobs; and Elite Comfort Solutions said it would expand its production of flexible foam bedding and cushions in Fort Smith, adding 100 workers. Shared Services Center-Fort Smith, which supplies business office support in health care, also said it would add 100 jobs.

In the Little Rock area, an American Airlines subsidiary, Envoy Air Inc., said it would bring 60 new jobs to a $2 million aircraft maintenance facility; FedEx marked the grand opening of a 303,000-SF ground facility employing 175 people; and Sig Sauer Inc. finalized plans to move its Elite Performance Ammunition manufacturing to Jacksonville from Kentucky, creating 50 full-time jobs with more promised later.

No. 4: A Wild Ride For Energy

2016 was a roller-coaster year for the state’s energy industry, with fossil fuel companies seeking to rebound and clean energy projects on the upswing.

But since the presidential victory of oil-coal-and-gas-friendly Donald Trump and an OPEC decision to cut production, oil and gas prices have rallied.

As the year began, natural gas was swooning in Arkansas as a supply glut devastated prices and brought drilling to a virtual halt. Production plunged after a 10-year boom, and state severance tax collections fell by half.

Murphy Oil Corp. of El Dorado reported a 2015 net loss of $2.27 billion in January, and later froze top salaries. Layoffs came on top of 2015 job reductions, and dividends were cut. A sale of Canadian assets brought a second-quarter profit, and third-quarter losses moderated. Murphy’s retail fuel spinoff, Murphy USA, fared better, with its stock rising to near $70 a share in December, up from $60.78 on Jan. 4.

In February, Energy Security Partners, led by Roger Williams and Arkansans Rodney Slater and Wesley Clark, proposed a Jefferson County site for a $3.5 billion plant for turning natural gas into liquid fuel. Williams confirmed the site 10 miles north of Pine Bluff in September and said pre-engineering for the project, which would be the state’s largest economic development endeavor ever, has begun. He predicted he would have financing of “$100 million by the first of the year or early 2017.”

Arkansas’ solar-energy industry faced a crossroads. The Public Service Commission is reviewing rules for utility customers who produce their own power, with rate and rebate recommendations due from utilities, environmentalists and consumers by September 2017. Meanwhile, the state’s largest solar array went online in East Camden in March, supplying defense contractor Aerojet Rocketdyne and giving Ouachita Electric Cooperative Corp. a cushion for peak demand. Other cooperatives initiated smaller solar facilities, and Entergy Arkansas says a large field near Stuttgart could deliver power within two years. Scenic Hill Solar of Little Rock, led by former Lt. Gov. Bill Halter, and L’Oreal announced a multimillion-dollar deal to install 4,000 solar panels at the cosmetics giant’s factory in North Little Rock and 5,000 more on the roof of a Kentucky plant.

The Plains & Eastern Clean Line, a nearly $2 billion project to transmit Oklahoma wind power across Arkansas, advanced with federal approval in 2016 after an earlier state rejection and opposition from lawmakers in Washington. But the project faces a court challenge from opponents who allege the misapplication of federal power and an intrusion on local authority. Opponents also fear environmental damage and falling property values. U.S. Sens. John Boozman and Tom Cotton, as well as Rep. Steve Womack, are set to fight the power line anew after Trump’s inauguration.

Changes in Washington could also kill moves to shut down two coal-fired power plants owned by Entergy. The Sierra Club sought the shutdowns in February to meet Environmental Protection Agency clean air rules. Instead, Entergy plans to close the plants, in Jefferson and Independence counties, by 2028. Trump campaigned on curtailing the EPA’s power.

No. 5: Medical Marijuana Gets Voters’ OK

Arkansas became the 29th state and the first in the Bible Belt to approve the sale and use of marijuana for medicinal purposes.

Arkansas voters approved Issue 6, the Arkansas Medical Marijuana Amendment, on Nov. 8 by a margin of 53 percent to 47 percent. Another medical marijuana proposal, Issue 7, the Arkansas Medical Cannabis Act, was struck from the ballot by the Arkansas Supreme Court in late October for not having enough qualified signatures for the voter-initiated proposal.

The amendment passed despite opposition that included Gov. Asa Hutchinson, a former director of the federal Drug Enforcement Administration, and the Arkansas State Chamber of Commerce.

A medical marijuana proposal on the 2012 ballot had been narrowly defeated by Arkansas voters.

Hutchinson said he wouldn’t try to block the program’s implementation and designated $3 million of state funds to fund the startup.

The 2016 amendment calls for medical marijuana to be overseen by three government agencies: the Department of Health sets the guidelines for qualifying conditions and patients and the patients’ caregivers, the Medical Marijuana Commission will grant licenses to dispensaries and cultivation facilities, which will then be regulated by the Alcohol Beverage Control Division.

Hutchinson, President Pro Tempore of the Senate Jonathan Dismang and Speaker of the House Jeremy Gilliam named representatives to the commission on Dec. 7.

Hutchinson named Little Rock oncologist Dr. Ronda Henry-Tillman, who was designated chairwoman of the commission; Dismang named pain management specialist Carlos Roman of Little Rock and Dismang’s former chief of staff, James Miller of Bryant, while Gilliam named pharmacy executive Stephen Carroll of Benton and attorney Travis Story of Fayetteville.

The three agencies have until March 9 to announce their rules for running the medical marijuana program. The commission will begin accepting applications for dispensary licenses by June 1.

Hutchinson said he preferred that the dispensary and grower licenses be awarded through a lottery system similar to the way the state awards alcohol permits. He said that would prevent large companies from dominating the new industry.

State Rep. Doug House filed a bill that would postpone the agencies’ rules deadline until May and the start of dispensary applications until July 1.

The state Legislature has the authority to alter the amendment by a two-thirds vote if, according to the amendment, the changes do not affect the legalization of medical marijuana or the number of dispensaries created.

State Sen. Bart Hester said he is considering a bill to raise additional taxes on marijuana sales to offset his proposed $105 million tax cut.

No. 6: NWA Back to Boom Times

At the 22nd annual Business Forecast Luncheon in January 2016, Kathy Deck said northwest Arkansas was the economic star of the state.

The region added nearly 5,000 jobs in 2015 and Deck predicted it would add another 5,000 in 2016. While the exact statistics of 2016 haven’t been tabulated, it looks like it was another stellar year for northwest Arkansas, as Deck predicted.

“It continues to be nothing short of amazing,” said Deck, the director of the Center for Business & Economic Research at the University of Arkansas at Fayetteville. “The northwest Arkansas economy is very dynamic and it’s huge.”

According to the Arkansas Department of Workforce Services, unemployment in northwest Arkansas was less than 3 percent in September. The national rate was 5 and the state’s rate was 4 percent.

Most of the other economic metrics look strong.

Construction continues to be vibrant in the region. Commercial permits for Benton and Washington counties, the backbone counties of the area, amounted to $206.5 million in the first half of 2016. That figure is more than all of 2015, which had a total of $188 million. The first half of 2015 had $75.2 million in commercial permits; the first half of 2016 saw almost three times that total.

There were numerous big-ticket builds planned or put into construction in 2016. The region’s medical community was at the forefront with multimillion-dollar expansions announced or completed by Mercy Northwest Hospital, Arkansas Children’s Hospital and Washington Regional Medical Center. Hospitals are feeling the need to expand to better serve the area’s growing population.

That need to expand continues to be felt in northwest Arkansas’ residential segment, which has recovered to its prerecession levels. In Arvest Bank’s Skyline Report, there were nearly 1,600 residential building permits issued in the first half of 2016, an increase of 15 percent from the same period of 2015 in Benton and Washington counties. More than 4,300 homes were sold in the first six months of the year, an increase of 16 percent compared with the same span in 2015.

Construction of multifamily units continues strong in northwest Arkansas, thanks to a vacancy rate of just 2.4 percent in the first half of 2016. Fayetteville has three projects totaling nearly 1,110 units under construction, while Rogers and Bentonville have more than 800 under construction.

“If Little Rock is screaming hot, northwest Arkansas is screaming hot squared,” said Jerry Webster, president of Little Rock’s Webster Corp., an apartment broker.

No. 7: Infrastructure Landscape Changing

The central Arkansas infrastructure landscape has been in flux this year, with the Broadway Bridge closing, Robinson Center opening, interstate work and a few smaller public projects.

The bridge, which crosses the Arkansas River and connects Little Rock and North Little Rock, closed Sept. 28. The Arkansas Highway & Transportation Department’s $98.4 million plan is to replace the aging structure in six months.

The Robinson Center in Little Rock comes in at a close second to the bridge in being the most noticeable change. Its 28-month, $68.6 million renovation and expansion concluded Nov. 10.

Funded by a 2 percent advertising and promotion tax, the project included:

• A new ballroom and outdoor terrace overlooking the river;

• A complete reorganization of the back-of-house support areas;

• Performance hall improvements, including more acoustic volume, improved sight lines, bigger lobby spaces and restroom facilities and new box seating along the side walls; and

• Restoration of the building’s exterior.

Also completed this year were improvements to Interstate 40 between Conway and North Little Rock. The 22-mile, $117 million project took about four years and ended in April.

But little progress has been made on the $630.7 million project to expand the Interstate 30 corridor, including its bridge over the Arkansas River. A public meeting was held in April to present two plans: an eight-lane general purpose proposal and a six-lane with four collector/distributor lanes. Also proposed is moving the Cantrell Road interchange that brings drivers from I-30 into downtown Little Rock south to Fourth and Sixth streets.

The next step is for the plans to be honed and for a no-build alternative to be analyzed. The estimated construction timeline is 2018-22.

Other central Arkansas building and development news includes the Little Rock Technology Park’s nearly $7 million worth of phase 1 renovations. The Tech Park announced this month the first tenants moving into its permanent offices at 415 and 417 Main St., set to open March 1. The $100 million project will entail more than 600,000 SF spread over five phases; voters passed a half-cent sales tax in 2011 to provide $22 million for it.

In addition, a $6.2 million federal grant was awarded to the Little Rock Port Authority in August, a grant that will be used to add a new dock with direct dock-to-rail capability and new rail storage at the port’s Slackwater Harbor. That is expected to cost $10 million and take two years.

And in September, the Clinton National Airport learned it was getting a $5.9 million Federal Aviation Administration grant to help it improve 2,500 feet of the pavement of Taxiway A at Adams Field.

In the education sector are four schools that ranked among the state’s largest commercial building projects: the nearly complete $95.3 million North Little Rock High School; Robinson Middle School and Mills High School in Little Rock, weighing in at $37.6 million each; and the $33.3 million Pinnacle View Middle School in Little Rock.

No. 8: Bank Consolidation Continues

Bank consolidation was the biggest business story of 2015 and it continued into 2016, with some of the biggest banks in the state and some of the smaller getting in on the action.

Publicly traded Bank of the Ozarks in July overtook privately owned Arvest Bank as the largest bank chartered in Arkansas by completing two big bites that were announced in late 2015: an $800 million deal to buy Community & Southern Bank of Atlanta and the $402.5 million purchase of C1 Bank of St. Petersburg, Florida.

As of Sept. 30, BOZ’s total assets topped $18.4 billion, while Arvest, which hasn’t made an acquisition since 2013, reached $17 billion.

Centennial Bank, owned by publicly traded Home BancShares Inc. of Conway, remained a distant third at the end of the third quarter, with $9.75 billion in assets. But two more Florida acquisitions announced in the fourth quarter — Landmark Bank of Fort Lauderdale and Bank of Commerce of Sarasota — will add some $670 million in assets and allow Centennial to “crawl over $10 billion,” in the words of Chairman John Allison.

Simmons Bank, which converted to a state bank charter in April, acquired Trust Co. of the Ozarks of Springfield, Missouri, in February and then in September completed the acquisition of a Tennessee bank, Citizens National Bank of Athens.

Another Tennessee acquisition announced in the fourth quarter, First South Bank of Jackson, and Simmons’ biggest yet — a $564 million deal for $2.47 billion Bank SNB in Stillwater, Oklahoma, revealed last week — will combine to bring its assets above $10 billion as well.

Bear State Bank of Little Rock, the smallest of Arkansas’ four publicly traded banks with $2 billion in assets as of Sept. 30, acquired Metropolitan National Bank of Springfield, Missouri, in February.

Bear State also converted from a national to a state charter in 2016, as did Anstaff Bank of Green Forest. As the year draws to a close, the $444 million Anstaff Bank has applied to merge in $125 million Twin Lakes Community Bank, which Anstaff’s parent company, First National Bancorp Inc., acquired at the end of 2015.

Two more announced acquisitions were pending in December:

• First Community Bank of Batesville’s all-stock acquisition of Little River Bank in Lepanto; and

• Central Bank of Little Rock’s acquisition of Pinnacle Bank of Rogers.

And two small Arkansas bank charters disappeared completely in 2016:

• Allied Bank of Mulberry, $66 million in assets as of June 30, was shut down in September by bank regulators, who arranged an emergency acquisition by Today’s Bank of Huntsville, pushing its assets to $184 million as of Sept. 30.

• Community First Bank of Harrison, $469.5 million in assets as of Sept. 30, was acquired in November by $1.5 billion Equity Bank of Andover, Kansas.

No. 9: Goodsons’ Legal Controversies

Class-action attorney John Goodson of Texarkana and his wife, Arkansas Supreme Court Justice Courtney Goodson, dominated legal news in Arkansas in 2016.

John Goodson, a member of the University of Arkansas board of trustees, was sanctioned in August along with other attorneys for abusing the federal court system in a controversial class-action strategy first reported by Arkansas Business in December 2015.

Media attention to the case may have changed the way class-action cases are handled, and media attention to judicial elections — including Courtney Goodson’s unsuccessful run for a promotion — could change the way state Supreme Court justices are chosen in the future.

In January, weeks before voters statewide chose between Justice Goodson and Circuit Judge Dan Kemp of Mountain View to become the state’s chief justice, a three-part series in the Arkansas Democrat-Gazette examined the role of financial contributions to judicial campaigns and the appearance of favoritism shown by the state Supreme Court to a handful of law firms specializing in class-action cases. It found that John Goodson, his law firm and five out-of-state law firms were among the biggest campaign donors.

“Dark money” — spending on advertising by groups that can shield the identity of donors — favored Kemp, the ultimate victor. The influence of identified and unidentified donors contributed to a debate about whether popular elections are the best way to choose appellate judges, a system that Gov. Asa Hutchinson was already concerned about.

In November, the Arkansas Bar Association completed its draft of a proposed constitutional amendment to appoint justices to the state Supreme Court rather than have them elected.

Meanwhile, John Goodson’s method for litigating class-action cases was again being picked apart. U.S. District Court Judge P.K. Holmes III, the chief federal judge for the Western District of Arkansas, learned from Arkansas Business that a case that had been in his courtroom was dismissed in 2015 only to be refiled the next day in state court. (An earlier strategy that Goodson’s firm and others used to generate hundreds of millions of dollars in settlement fees was found to be illegal by the U.S. Supreme Court in 2013.)

Holmes said he never would have approved the settlement, which called for the plaintiffs’ attorneys to quickly receive $1.85 million while thousands of victims had to complete a claims process so onerous that, in the end, only 4 percent filed claims amounting to less than $300,000.

Holmes ordered 17 attorneys involved in the case to explain why they shouldn’t be sanctioned for abusing the court system, a step so rare that it drew attention from newspapers and legal publications nationally.

In August, Holmes reprimanded John Goodson and four other attorneys after finding bad faith and abuse of the court system in their manipulation of the case. Ten other attorneys were found to have abused the judicial process, but their misconduct didn’t rise to the level of bad faith, Holmes said, so they were not sanctioned.

The attorneys’ appeal of Holmes’ order is pending with the 8th Circuit.

The attention that the case has received is expected to make life harder for plaintiffs and attorneys as other judges have now been alerted to their techniques. One law professor said Holmes’ finding is likely to deter plaintiffs’ attorneys and defense attorneys from bailing out of federal court and filing in state court in the hope of getting better results.

Also in 2016, Arkansas Business reported that out-of-state attorneys recommended by John Goodson were given a no-bid contract by state Auditor Andrea Lea for a contingency fee nearly twice as high as other states have committed to pay in pursuit of unredeemed U.S. Treasury bonds that belonged to Arkansans. Goodson contributed to Lea’s campaign for office in 2014.

No. 10: White-Collar Crime

The land of fraud remained a popular domain for denizens of the private and public sector alike during 2016. A calendar sampling of white-collar crimes that generated federal prison time includes:

Jan. 8: Brenda Blair, 48, of Gentry is sentenced to 28 months after waiving indictment and pleading guilty to one count of wire fraud. Blair bilked Tyson Foods of more than $550,000 through illegal benefit payments.

Jan. 28: Dennis Smiley Jr., 52, is sentenced to eight years and a month for bank fraud. The former Arvest Bank executive pleaded guilty to a single count of bank fraud in connection with $5.3 million he obtained from 23 Arkansas lenders through forged signatures and fraudulent collateral.

Feb. 26: Alberto Solaroli, 61, is sentenced to 12 months and one day for money laundering and ordered to pay $120,000 in restitution. That represented a sweet plea deal after a grand jury penned a $1.5 million loan fraud indictment against him for ripping off Little Rock’s One Bank & Trust.

June 29: Andrew Melton, 69, is sentenced to seven years for using hundreds of thousands of dollars from ThermoEnergy Corp. to pay personal expenses. The former chief financial officer of the company was convicted of 12 counts of mail fraud and five counts of failure to remit $1.9 million in payroll taxes to the IRS.

July 25: Little Rock Dr. Robert Barrow, 63, is sentenced to two years for conspiring to commit health care fraud. Barrow swindled $680,000 from Arkansas Blue Cross & Blue Shield and more than $32,000 from dozens of patients.

Sept. 13: Dawn de Brantes, 48, is sentenced to 90 months for investment fraud conspiracy and tax fraud conspiracy. Daniel C. Olivares, her 34-year-old stepson, is sentenced to two years for investment fraud conspiracy.

The Clarksville pair were part of the ZeekRewards online Ponzi scheme, where she was chief operating officer and he was senior technology officer.

Oct. 5: Final sentencing for all three embezzlers at First National Bank of Lawrence County concluded with each defendant receiving 51-month sentences. Peggy Sutton, 61; Brenda Montgomery, 57; and Cindy Tate, 57; admitted to stealing more than $3.9 million from the Walnut Ridge bank during the course of a 10-year conspiracy.

Oct. 27: Ted Suhl, 51, is sentenced to seven years after his July conviction on two counts of fraud and bribery. The case involved Suhl using charitable donations to a West Memphis church to disguise payoffs to benefit his business ventures, which provided behavioral health services for youths.

Much of the money flowed through the 15th Street Church of God in Christ to Phillip W. Carter, 47, with a portion passed on to Steven B. Jones, 51, who both were sentenced in February after making plea deals.

Jones, a former deputy director of the Arkansas Department of Human Services and a former state legislator, was sentenced to two years and six months. Carter, 47, a former probation officer in Crittenden County and a former West Memphis City Council member, was sentenced to two years.

Hot Springs Wants Bold Approach for Downtown

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HOT SPRINGS - Hot Springs officials are set to vote this week on a budget that includes $50,000 to develop a plan for the property where the Majestic Hotel once stood.

The city demolished the landmark hotel after a fire destroyed it in 2014, the Sentinel-Record reported. City Manager David Frasher said any development plan needs to play up the city's namesake thermal water.

Frasher said the water is intrinsic to the city yet inconspicuous to visitors. He said raising its profile should be fundamental to development plans for the site.

"Somebody who named this place was so taken by the hot springs that they named it that," Frasher said at the city's budget presentation last week. "When you think about naming your city after a geographic feature, what if you named your city Canyon, and you got there and the canyon was covered up by a bath house? It would be a strange thing."

Frasher is urging a bold approach to the development. He told officials the property should generate 15,000 visitors a month.

The Hot Springs Board of Directors is scheduled to vote Tuesday on the budget.

A portion of the $50,000 will allow Hot Springs to participate in a program called Kansas State University Targeted Assistance to Brownfield, or TAB. The TAB program helps communities find new purposes for properties where other developments used to be located. The program will create architectural renderings of ideas to visualize development goals.

City officials have said the public will help decide how the property is developed. Dates are being set for workshops that TAB will facilitate. The city has to secure an environmental release for the property before any plan can move forward.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)


In the Workplace 2017: How Arkansas Employers Can Deal with Medical Marijuana

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Editor's Note: This is the first of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Here's a quick look at important employment issues that could arise next year.

Now that Arkansas is the latest state to have a medical marijuana law on the books, Arkansas employers must be prepared to address this issue.

Although the amendment to the Arkansas Constitution is effective immediately, it should take some time for most Arkansas residents to take advantage of the approved use of medical marijuana given the regulatory and administrative mechanisms that must be put into place. Arkansas has just 120 days to promulgate rules to implement the amendment.

Employment-Related Provisions

From an employment perspective, the new law allows "qualifying patients" who have "qualifying medical conditions" certain protections in the workplace.

For instance, employers:

  1. Cannot "discriminate" against a person (that includes not hiring, disciplining, failing to promote or terminating one's employment) or otherwise penalize a person based upon that person’s past or present status as a "qualifying patient" or "designated caregiver";

  2. Cannot discipline a "qualifying patient" for the medical use (which includes actual use or mere possession) of marijuana in accordance with the amendment if he or she possesses not more than 2 ½ ounces. Under the amendment, a rebuttable presumption exists that a "qualifying patient" is lawfully engaged in the medical use of marijuana if he or she A) is in actual possession of a registry identification card and B) possesses an amount of usable marijuana that does not exceed 2 ½ ounces;

  3. Cannot discipline a "qualifying patient" for giving a permitted amount of usable marijuana to another "qualifying patient" for medical use if nothing is transferred in return;

  4. Cannot discipline a "qualifying patient" for possessing marijuana paraphernalia to facilitate the use of medical marijuana; and

  5. Cannot discipline anyone for giving a "qualified patient" marijuana paraphernalia to facilitate the use of medical marijuana.

"Qualifying medical conditions" presently include cancer, glaucoma, HIV/AIDS, amyotrophic lateral sclerosis, severe arthritis, posttraumatic stress disorder (PTSD), Tourette’s syndrome, hepatitis C, Crohn’s disease, fibromyalgia, Alzheimer’s disease, ulcerative colitis and any "chronic or debilitating disease or medical condition" with symptoms such as peripheral neuropathy, "intractable pain," seizures, "severe" nausea or "severe and persistent" muscle spasms. The Department of Health may add to this list in the future.

Significant Compliance Issues for Employers

Given this new law, how do you respect the rights of an employee who has permission to use medical marijuana, yet protect other staff and customers?

Answer: It depends on a variety of issues discussed below.

Are you a federal contractor? Federal contractors could have their hands full given the tug-of-war between federal and state law on this issue. Federal law still considers marijuana an illegal drug, although there are some legal prescription drugs, like Marinol, that contain THC or other marijuana derivatives.

For those of you who are federal contractors, you are in luck — most courts believe federal law preempts state medical marijuana laws on this issue. Still, if you decide you are a federal contractor, it would not hurt for you to seek guidance on the medical marijuana issue from the federal agency involved with the contract.

Differing obligations under the Americans with Disabilities Act and the Arkansas Civil Rights Act. Arkansas employers might have different obligations under the federal Americans with Disabilities Act (ADA) and the state Arkansas Civil Rights Act (ACRA), which mirrors the ADA in various ways.

For instance, while the ADA would not protect the use of medical marijuana by a person with a disability — it would consider it an illegal drug — the ACRA would not prohibit its use. So, you could face a situation in which it was perfectly legal to fire an employee under the ADA for medical marijuana use, but not legal under the ACRA, and chances are the ADA would not preempt the ACRA on this issue.

Perhaps the best approach to this issue is to think about medical marijuana like any other prescribed medication — what would you normally do if an employee was taking a prescription drug that could impact his or her ability to safely perform the essential functions of the job? Typically, you should have your HR manager (not the employee's direct supervisor) forward the relevant job description to the employee’s doctor and ask in writing A) whether the employee can safely perform the essential functions of the job, B) what is the duration of the health condition that requires the medical marijuana prescription and C) whether the doctor suggests any accommodations. We typically advise employers to allow the employee to take the written request for information to the doctor.

If the doctor raises concerns about the employee's ability to safely perform the essential functions of the job, you may have to consider an "accommodation" for the employee, such as leave while using medical marijuana or a transfer to a non-safety sensitive job.

The impact on workers' compensation claims. There are also implications under Arkansas' workers' compensation laws.

One particular statutory section that defines compensable injuries states, "The presence of alcohol, illegal drugs, or prescription drugs used in contravention of a physician's orders shall create a rebuttable presumption that the injury or accident was substantially occasioned by the use of alcohol, illegal drugs, or prescription drugs used in contravention of physician's orders."

In other words, there used to be a rebuttable presumption that a workplace injury was non-compensable if the employee tested positive for marijuana.

With the passage of the amendment, if medical marijuana use by an employee who is injured on the job is not inconsistent with a physician's orders, the previous presumption about the cause of the injury disappears. More injuries will be considered "compensable."

What Actions Can You Prohibit?

First, the new amendment does not require an employer to "accommodate the ingestion of marijuana in a workplace."

So, unlike the normal use of prescription drugs, Arkansas employers do not have to allow their employees to "light up" or otherwise use marijuana on their property. In fact, the amendment states that nothing in the new law permits a person to possess, smoke or use marijuana in a variety of locations, including schools, school busses, alcohol or drug treatment facilities, community or recreation centers, public transportation or any "public place."

Second, the new amendment does not require an employer to allow an employee to work "while under the influence of marijuana." Additionally, the amendment states that nothing in its text permits a person to undertake any task under the influence of marijuana "when doing so would constitute negligence or professional malpractice."

Finally, the amendment does not permit a person to operate, navigate or control any type of "motor vehicle, aircraft, motorized watercraft, or any other vehicle drawn by power other than muscle power" while under the influence of marijuana.

What to Do Now

Here is our list of things to do for now:

  1. Take a hard look at your job descriptions, especially the ones you consider to be safety-sensitive. Update them as needed with the assistance of your employment lawyer.

  2. For truly safety-sensitive positions, make it a requirement that an employee disclose to your HR manager or other senior manager that he or she is using medical marijuana or any other "regular" prescription drug that could impact the employee's ability to safely perform the essential elements of the job.

  3. Make sure your handbook is up-to-date and include in it prohibitions against the use of medical marijuana at work and being under the influence of medical marijuana at work.

We suspect the Arkansas Department of Health or the General Assembly will fine-tune the amendment to help everyone understand their obligations, so stay tuned.

Additionally, we can’t be sure at this point whether the Trump administration will take a harder line on medical marijuana than the Obama administration. All sorts of questions remain about the provisions of the amendment, many of which seem contradictory.

(Stuart Jackson heads up the Labor & Employment Law team at Wright Lindsey Jennings in Little Rock.)

In the Workplace 2017: With Overtime Rules On Hold, What's Next?

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Editor's Note: This is the second of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Here's a quick look at important employment issues that could arise next year.

Since the Department of Labor has appealed the district court injunction of the overtime exemption rules that were scheduled to take effect earlier this month, the new rules are in limbo until the legal battle plays itself out (or the new presidential administration takes on the ultimate decision).

Faced with this uncertainty, relieved employers who were unprepared for the new overtime exemption rules may feel as if they are now excused from having to make any effort to comply with the new rules, and some employers who have already transitioned employees from exempt to non-exempt or increased employees' wages to meet the new salary level (i.e., $47,476 per year or $913 per week) may be considering whether they should roll back these changes.

In addition to the reasons employers should consider going through with a planned transition, employers who intend to wait until the dust finally settles before taking steps to comply with the new overtime exemption rules or who plan to roll back an already-implemented change, should consider the following:   

The overtime exemption rules could be enforced retroactively to Dec. 1, 2016. If the district court injunction is overturned on appeal or the rules are otherwise revised and implemented, employers may be held liable for any overtime worked by employees who would have been classified as non-exempt under the rules starting Dec. 1, 2016 — regardless of when the rules are eventually enforced and as if the injunction had never been issued. (Employers may want to consider tracking the hours of any employees who may be reclassified if the new rules are enforced.)

Employers are not required to roll back any changes implemented in anticipation of the new rules. For the sake of employee morale (and potential administrative resources/efficiency factors), employers should consider maintaining already-implemented wage increases.

Rollbacks of already-implemented changes could lead to discrimination claims. Employers should carefully review all roll-backs of employees' wages to ensure that adjustments are being applied consistently.

(Jane A. Kim is a partner at Wright Lindsey Jennings in Little Rock. Her practice centers on defending employers in state and federal court litigation, and providing guidance on workplace policies and agreements.)

In the Workplace 2017: 'Ban the Box' and Concerted Activity Under the NLRA

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Editor's Note: This is the fourth of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Below, a quick look at two important employment issues that could arise next year.

Momentum for ‘Ban-the-Box’ Continues to Grow

Last year I wrote an article about the "ban the box" movement — an initiative intended to prevent employers from learning about and considering the criminal history of an applicant in the early stages of the hiring process.

The initiative, which delays the background check inquiry, is intended to provide job applicants with a criminal record a more fair chance to make their qualifications known to prospective employers.

Momentum for the policy continues to grow with a total of 24 states now having adopted statewide policies, according to the National Employment Law Project. Additionally, nine states have now removed the conviction history question from job applications for private employers. Although Arkansas has not yet adopted a statewide policy, Pulaski County has now joined the movement by unanimously passing an ordinance removing criminal history questions from the county’s initial employment applications.

The stated purpose of Pulaski County Ordinance 16-1-29A, which took effect in August, is to assist in the “successful reintegration into the workforce of people with criminal records by removing barriers to employment and enhance the health and safety of the community by assisting people with criminal records to lawfully provide for themselves and their families.” The ordinance requires that background checks are delayed until after a conditional offer of employment is made.

If a background check reveals an offense, the county is required to conduct an individualized assessment that consists of a consideration of the nature and gravity of the offense, the time passed since the offense and the nature of the job.

If Pulaski County rescinds an offer of employment based on a finalist’s criminal history, the applicant must be provided with an adverse-action letter that specifies the deadline by which the applicant may contest the accuracy of the reported information or provide evidence of rehabilitation.

Attorneys with expertise in employment screening can help private sector employers who are considering the implementation of a ban-the-box policy. Human resource professionals should be prepared to discuss with counsel the company’s current hiring process and to provide documents that are involved in the hiring process, including employment applications, offer letters and adverse-action notices.

(By Regina Young, a partner at Wright Lindsey Jennings in Little Rock. Her active trial practice includes defending employers in federal and state court litigation and appeals. Email her here.)

Protected Concerted Activity Under the National Labor Relations Act

Recently, the National Labor Relations Board (the board) seems to be focusing more on violations of the National Labor Relations Act (the act) involving non-unionized employees.

That’s right, non-union employees as well as employees represented by a union are protected by the act. Under Section 7, employees have a right to engage in "concerted activities for the purpose of … mutual aid or protection" or "protected concerted activity."

Protected concerted activity involves two or more employees taking action for their mutual aid or protection regarding terms and conditions of their employment. The board’s concept of the type of conduct protected by Section 7 is broader than you might expect.

For example, an employee at a used car dealership in Yuma, Arizona complained to his manager about how sales commissions were being calculated. Later, the owner asked the employee to come to a meeting in the sales manager’s office.

During the meeting, the employee lost his temper and began yelling at the owner calling him a "f--king motherf--ker," a "f--king crook" and an "a--hole." He also told the owner he was "stupid" and stood up during the meeting, pushed his chair aside and warned the owner that if he was fired, the owner would "regret it."

The employee was fired by the owner for his conduct at the meeting. After reviewing the facts, the board concluded that the employee’s conduct was protected by Section 7 of the act and it was against the law for the owner to fire him.

In a similar case, an employee of a catering company became upset because he thought a supervisor had been disrespectful of his co-workers.

The employee posted on Facebook that the supervisor was "a nasty mother f--ker," a "loser," and said "f--k his mother and his entire f--king family."

When the posting was brought to the attention of the employer, the employee was fired. The board found that the employee’s Facebook posting was not so egregious as to lose protection under Section 7 of the act. The board ordered the employer to reinstate the employee and pay him full back pay.

Employers must be very careful how they deal with situations that could involve an employee engaged in protected concerted activity under the National Labor Relations Act.

Currently, the five-member National Labor Relations Board consists of only three members: two Democrats and one Republican. The two vacant seats will be filled by President-elect Trump, giving Republicans majority control.

But this does not mean that employers should expect immediate relief from what some would consider overreaching decisions by a board controlled by President Obama’s appointees.

(By John Davis, a partner at Wright Lindsey Jennings in Little Rock. He represents employers in labor and employment law matters and workers' compensation defense. He advises clients in connection with wage and hour issues, union activity, and employment policies and agreements. Email him here.)

In the Workplace 2017: LGBT Rights and Immigration Law Compliance

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Editor's Note: This is the last of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Below, a quick look at two important employment issues that could arise next year.

LGBT Rights in the Workplace: What's Next for Arkansas?

In the summer of 2015, the U.S. Supreme Court issued a landmark decision affecting the LGBT community, ruling that same-sex couples have a constitutional right to marry. While there were no such watershed LGBT decisions in 2016, several legal issues are working their way through state legislatures and the lower courts.

Title VII

For example, this year several federal courts considered whether to overturn years of precedent and adopt the U.S. Equal Employment Opportunity Commission’s (EEOC) position that Title VII’s prohibition against "discrimination because of sex" includes a prohibition against sexual orientation discrimination.

In oral arguments held in late November, the judges of the Seventh Circuit seemed inclined to rule that Title VII does cover sexual orientation discrimination. It seems inevitable that this question will ultimately have to be resolved by the Supreme Court. Like Title VII, the Arkansas Civil Rights Act (ARCA) does not list sexual orientation or gender identity as a protected class, but Arkansas courts have looked to Title VII when interpreting the ACRA. If Title VII is ultimately found to prohibit sexual orientation discrimination, we can expect plaintiffs to argue that the ACRA should be interpreted the same way.

At the agency level the EEOC under the Obama administration has identified sexual orientation and gender identity discrimination as an enforcement priority. Many have questioned whether that enforcement priority will change under the incoming Trump administration.

Transgender employees’ restroom access is another area in which legal challenges are working their way through the courts.

Bathroom Access

A bathroom access bill similar to the one passed in North Carolina is expected to be introduced in the 2017 session of the Arkansas General Assembly.

North Carolina’s controversial law requires people to use the restroom of the gender assigned to them at birth and is the subject of more than one pending lawsuit.

Some believe North Carolina’s governor lost his re-election bid at least in part because of the bathroom bill, which many business groups opposed. Should such a bill pass in Arkansas, we can expect national attention and reaction similar to that received by North Carolina.

(By Michelle Kaemmerling, a partner at Wright Lindsey Jennings in Little Rock. Her labor and employment practice focuses on employment and complex commercial litigation in state and federal court, and consumer class action lawsuits. Email here here.)

Immigration Law Compliance: Preparing for a Trump Administration

Donald Trump's victory in November has generated many questions for employers — what's going to happen to the Affordable Care Act, or the U.S. Department of Labor's new overtime rule? — but there is one area slated for change in which employers can prepare for now: immigration.

While Mr. Trump’s proposal for "an impenetrable wall" along the southern border has garnered the most attention, his other immigration policies likely will have a more direct and immediate impact for Arkansas employers.

As an employer you might be thinking, "Well, I don’t have any foreign workers, so changes in immigration policy won't affect me, right?" Wrong.

Trump has consistently stated that he wants to deter illegal immigration by "turning off the jobs and benefits magnet" that attracts foreign workers. In other words, he wants to crack down on businesses that employ people without work authorization.

This likely means more worksite enforcement visits from Immigrations and Customs Enforcement (ICE) to check whether there are workers employed without work authorization. Such visits commonly occur by ICE agents who arrive unannounced (or with very little notice) seeking to audit the company's I-9 forms.

To accomplish his goal of increased enforcement, Trump has proposed tripling the number of ICE agents. He's also suggested that E-Verify should be mandatory for all employers (keep in mind that E-Verify is separate from Form I-9; it does not replace it).

In short, employers need to be prepared for an increase in I-9 audits by a beefed-up ICE agency.

During an ICE audit, employers can find themselves in trouble not only if they have unauthorized workers, but (more commonly) because they did not properly prepare or maintain their I-9 forms for each employee. Penalties can be steep; fines generally start around $200 and go up to several thousand dollars per offense. In 2015, a California company was fined more than $600,000 because it failed to properly complete I-9 forms for its employees.

So what should employers do to get ready for a possible audit?

First, you must prepare. You definitely don't want to wait until ICE is on-site demanding to see your I-9 forms. Therefore, employers would be wise to conduct an internal I-9 audit to identify and correct potential problems now. In fact, an annual internal I-9 audit is on ICE's list of "Best Employment Practices."

If you need another reason to conduct an internal audit, keep in mind that you'll be given safe harbor if ICE discovers an unauthorized worker, but only if you have properly prepared and maintained your I-9 forms.

Unfortunately, audits can create more problems when employers choose to perform them themselves and then commit mistakes that lead to further violations. Common mistakes include filling out new I-9s for employees and throwing the old ones away, making revisions to I-9 forms without signing and dating the changes, and preparing new I-9 forms to correct mistakes and backdating them so they appear to be timely.

Even if these mistakes are "innocent," they can lead to stiff fines.

Therefore, the better practice may be to engage an outside firm to perform the audit, especially if it's the company’s first audit or if the company suspects there may be issues.

Employers can also use an external audit as an opportunity to update I-9 policies and to train compliance employees on proper procedures to prevent future mistakes.

While the future of employer regulations may be uncertain, conducting an internal I-9 audit is an easy step employers can take to ensure they are complying with both current immigration law and likely changes by the Trump administration.

(By Neemah Esmaeilpour, who heads up the immigration law practice at Wright Lindsey Jennings in Little Rock and is a member of the Labor & Employment team. Email him here.)

Pay to Rise for Millions as 19 States Increase Minimum Wage

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ALBANY, N.Y. - It will be a happy New Year indeed for millions of the lowest-paid U.S. workers. Nineteen states, including New York and California, will ring in the year with an increase in the minimum wage.

Massachusetts and Washington state will have the highest new minimum wages in the country, at $11 per hour.

California will raise its wage to $10.50 for businesses with 26 or more employees. New York state is taking a regional approach, with the wage rising to $11 in New York City, to $10.50 for small businesses in the city, $10 in its downstate suburbs and $9.70 elsewhere. Some specific businesses - fast-food restaurants and the smallest New York City businesses - will have slightly different wage requirements.

"This $1.50 increase, I cannot even comprehend or tell you how important this will be," said Alvin Major, a New York City fast-food worker. The 51-year-old father of four helped lead the fight for the increase in his state, one of several successful efforts by fast-food workers and other low wage workers around the country. "The price of food has gone up. Rent has gone up. Everything has gone up. ... This will make a difference for so many people."

Voters in Arizona, Maine, Colorado and Washington approved increases in this year's election. Seven other states, Alaska, Florida, Missouri, Montana, New Jersey, Ohio and South Dakota, are automatically raising the wage based on indexing. The other states seeing increases are Arkansas, Connecticut, Hawaii, Michigan and Vermont.

Additional increases are slated for later in the year in Oregon, Washington, D.C., and Maryland.

In Arizona, the state Chamber of Commerce and Industry filed a lawsuit challenging the increase, which will raise the minimum wage from $8.05 to $10. On Thursday, the Arizona Supreme Court refused to temporarily block the raise.

Workers and labor advocates argue the increases will help low-wage workers now barely making ends meet and boost the economy by giving some consumers more money to spend. But many business owners opposed the higher wages, saying they would lead to higher prices and greater automation.

Some restaurant owners may consider reducing portion sizes or charging for side dishes that were once included in the price of a meal to absorb the increase, according to Melissa Fleischut, president of the New York State Restaurant Association.

"I'm sure prices will go up where they can, but restaurants want to avoid sticker shock," she said. "They're going to have to get creative."

The adjustments in New York, California and several other states are part of a series of gradual increases to a $12 or $15 hourly wage.

The minimum wage will also go up this weekend in 22 cities and counties, including San Diego, San Jose and Seattle.

The high number of states and localities raising the wage this year reflects the successful work of fast-food workers and organized labor, according to Tsedeye Gebreselassie, senior staff attorney at the National Employment Law Project, as well as federal inaction on the wage. The national minimum was last raised, to $7.25, in 2009.

"These aren't only teens trying to make some pocket money," she said. "Increasingly it's adults who are using this money to support their families."

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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