Slack Fill Update: Chicago Federal Judge Dismisses Junior Mints Case Slack fill laws are in the news again. A federal judge in Chicago has just dismissed a claim by an Illinois woman that her box of Junior Mints was not full enough. See news report here and here. The [...]
San Diego Mergers and Acquisitions: Real Estate and Title Insurance Issues If real estate is a component of a San Diego merger and/or acquisition, then special and careful attention must be paid to title insurance issues. Retaining an experienced San Diego corporate attorney is essential. As most know, title [...]
Another Case Nullifies a Non-Solicitation-of-Employees Agreement A few months ago, we wrote about the case of AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., Case No. D071924 (Cal. App. 4th Dist. November 1, 2018). See here. In that case, we discussed how the court found an employee non-solicitation agreement [...]
San Diego Copyrights: Careful How You Register Photos When a San Diego business registers photographs for copyright, there is a choice between registering them as individual photos or as a compilation. The most common issues are cost, as fees are charged per registration, and practicality, as one registration form [...]
San Diego Mergers and Acquisitions: What is a Reasonable Termination Fee? A typical merger purchase agreement will contain various termination rights and will also include termination fees (also called "breakup fees"). The idea behind termination fees is to protect both parties to the merger agreement if the merger is [...]
Employees are a Huge Threat to Your Data: Strategies for Reducing Risk Recently, Verizon published a report on cybersecurity and data breaches. See full report here. It is an interesting report focusing on the threat to data posed by insiders such as employees and third-party "partner organizations." According to [...]
San Diego Business Contracts: Using Cost-Adjustment Clauses to Reduce Risks If your San Diego business is contemplating a long-term contract that involves materials and supplies, you might consider adding a "cost-adjustment" clause to the contract to reduce risks from market price fluctuations. With a long-term contract — one that [...]
The Case of Elon Musk: Securities Fraud and Being Careful with Your Tweets Last year, Elon Musk, the CEO of Tesla, Inc., got himself in hot water with the Securities and Exchange Commission ("SEC") about some statements he made and some tweets he sent. The SEC regulates securities in [...]
San Diego Employers: Do We Have to Allow Emotional Support Squirrels? San Diego and California employers are familiar with the idea that "reasonable accommodations" are necessary when an employee claims a disability. Under the Americans With Disabilities Act (ADA), "disability" includes an emotional disability. A recent trend in treating [...]
Can a Text Message be Considered "Written Notice" Under a Contract? Many business contracts have what are generally called "notice provisions." These generally state that, for some particular issue related to the contract or breach of the contract, one party must notify the other side. Examples include a "notice [...]
Due Diligence When Acquiring a Medical Corporation/Physician Practice Acquisitions If you are thinking of buying a San Diego medical corporation/physician practice, it is important to conduct your due diligence to ensure that you are getting what you expect. You will need an experienced San Diego corporate attorney to provide [...]
Franchising News: FTC Proposes New Franchisor Disclosures The Federal Trade Commission (“FTC”) recently requested public comments on its proposed changes to what is known as the FTC's “Disclosure Requirements and Prohibitions Concerning Franchising” (the “Disclosure Requirements"). Here in San Diego, franchising is regulated by both the federal government and [...]
Federal Court: Once a Corporation, Always a Corporation A recent decision by a federal court in Rhode Island reminds businesses that "once a corporation, always a corporation." This lesson is just as applicable to San Diego businesses as businesses on the east coast. See Morowitz v. United States, No [...]
San Diego Online Retailers: Paying for False Online Reviews Will Bring Legal Trouble The Federal Trade Commission Act prohibits businesses from engaging in unfair and deceptive business practices including deceptive and false advertising. FTC Act, 15 U.S.C. § 41 et seq. Here in the Golden State, there is a [...]
How the California Courts Evaluate Liquidated Damages Clauses When required to interpret a liquidated damages clause, California courts use a two-part test. A liquidated damage clause is a provision whereby the parties to a contract agree, in advance, on the amount of damages that one party will receive in [...]
New Overtime Rules from the Feds: Little Impact for San Diego Employers The federal Department of Labor ("DOL") recently proposed new regulations with respect to overtime payment obligations under the Fair Labor Standards Act ("FLSA"). If ultimately adopted, the proposed standards would make over a million workers eligible for [...]
Caution With "Pay-If-Paid" Contract Clauses With respect to construction contracts and contracts between a general contractor and a subcontractor, the California Supreme Court has long ago declared that "pay-if-paid" clauses are unenforceable. Back in 1997, the court held a "general contractor's liability to a subcontractor for work performed may [...]
San Diego Business Law: Demand Letters and the Litigation Privilege Occasionally, a San Diego business will find itself confronted with a potential breach of contract. When this happens, one of the first steps to take is to send a "demand letter" asking that the other party perform its obligations. [...]
San Diego Business Law: Three Key Differences Between Breach of Contract and Tort There is often much confusion about the difference between legal liability based on breach of contract and liability based on tort. In this article, we offer a brief discussion of three key distinctions. Obligations Founded on [...]
San Diego Breach of Contract: Reliance Damages If there has been a breach of a contractual obligation, under California law, the non-breaching party is entitled to recover damages. Among the several types of recoverable damages are "reliance damages." These are monetary amounts or their equivalents that have been paid [...]
More on the Frustration of Purpose Doctrine: Brexit Not Sufficient Grounds The legal doctrine of Frustration of Purpose has been in the news lately. We wrote about the doctrine recently. Under California law, frustration of purpose will excuse performance of a contract if there is some unforeseen event or [...]
Do California Shareholders Have the Right to Inspect Corporate Emails? In general, owners of stock in corporations are entitled to certain rights regarding inspection of corporate records. See Cal. Corp. Code,§§ 213, 1501, 1600 et seq. In general, small shareholders (under 5%) are entitled to less access — basically, [...]
Copyright Law Update: Your Copyright Must be Registered Before You can Sue The US Supreme Court recently issued its opinion Fourth Estate Public Benefit Corp. v. Wall-Street.com, No. 17-571 (US Supreme Court March 4, 2019). The Court reaffirmed the Copyright Act's requirement that a copyright must be registered before [...]
San Diego Businesses: Not So Fast on Cashless Retailing In the news lately are a multitude of cities and states that are banning cashless retailing. Philadelphia just passed a city law prohibiting most retailers from refusing to take cash or charging cash-paying customers a higher price. Fine of $2,000 [...]
Employees Must be Paid When Required to Call-in for Shifts Under California labor laws and applicable Wage Orders issued by the Department of Industrial Relations, if an employer requires an employee to “report for work” that employee must be paid. See Wage Order 7; Cal. Lab. Code §§ 200-203, [...]
Fraud as a Defense to Breach of Contract: Capacity to Act Otherwise Required If a contract is breached, the party breaching the contract will likely be sued. Once in the courthouse, there are many defenses that can be asserted that, if proven, will allow the breaching party to avoid [...]
Tips for Avoiding Pitfalls of Two-Step Acquisitions Two-step acquisitions (or two-step mergers) are common in the business world, particularly when there are significant uncertainties as to cost/valuation, the "fit" between acquiring company and target, potential market directions, and other issues. A two-step acquisition can be a solution, but can [...]
Causation and Insurance Liability: Of Squirrels and Electrical Arcing With respect to drafting San Diego business and insurance contracts, special attention should be paid to drafting clear and comprehensive definitions of causation particularly because causation is one of the more difficult concepts to understand in the law. Indeed, causation [...]
San Diego Franchise Law: Ideas on Handling the Ostensible Agency Doctrine This article will discuss what is known in franchise law as the "ostensible agency" doctrine. Ostensible agency is a legal doctrine used by courts to decide who is considered the "employer" with respect to employees of the franchisee. [...]
McDonald's Loses its "Big Mac" Trademark in Europe: Three IP Lessons In case you had not heard, McDonald's lost its trademark registration for the "Big Mac" in the European Union (“EU”). See CNBC report here. This was big news and, as a result, industry competitors immediately sought to capitalize [...]
San Diego Businesses: Is it Time to Say "No" to Biometrics? In our modern world, businesses have a tendency to think that every new technology is the "wave of the future" and the "key" to efficiencies, profits, and success. But, occasionally, certain technologies are just too fraught with legal [...]
Consumer Privacy Act Updates: Senate Seeks to Remove Protections for Businesses California State Senator Hannah-Beth Jackson (D-Santa Barbara) recently introduced a bill to make the California Consumer Privacy Act even tougher. See report here. Of particular note, Sen. Jackson's bill would remove a 30-day cure period for businesses and [...]
San Diego Commercial Leases: Avoid Arguing Over What is a Trade Fixture or a Leasehold Improvement One of the more confusing aspects of commercial real estate law is distinguishing between what is a trade fixture and what is a leasehold improvement. However, dealing with these issues up front as [...]
Deceased Judge's Vote Does Not Count Much ado has been made in the news recently about the US Supreme Court's decision in Yovino v. Rizo, No. 18-272 (February 25, 2019). In Yovino, the Supreme Court vacated a decision by the US Ninth Circuit in San Francisco because the decision [...]
San Diego Businesses: Thoughts on Employee Handbooks and "Standalone" Disclosures Businesses are increasingly required to provide disclosures here in San Diego and across the country. As we have discussed here, the California Consumer Privacy Act was passed in 2018 and contains many disclosure requirements. Warning labels on packaging is [...]
California Business Contracts: The Right to Adequate Assurance of Performance Every San Diego business has had it happen: A contracting partner fails to perform or fails to deliver on time, and there is worry about why and whether the other party can meet its obligations. These situations can be [...]
Forming a San Diego Professional Psychology Corporation If you are a going out on your own as a psychologist, forming a California professional psychology corporation as the business entity for operating your practice is probably the best investment you can make in your new practice. Forming a California professional [...]
Tips for Ensuring Your Automatic Renewal Clauses are Enforceable Many San Diego businesses, particularly online and service businesses, use automatic renewal clauses in their consumer contracts. As the name implies, automatic renewal clauses typically state that the contract extends for additional terms automatically unless the customer takes some active [...]
Can "Data Dividends" Make the Consumer Privacy Act Workable for San Diego Businesses Governor Gavin Newsom recently proposed what he called a “data dividend” that all California consumers should be paid when their personal data is collected. The Governor believes that consumers should "share in the wealth that is [...]
Corporate Governance: Thoughts About Proper and Improper Shareholder Votes In general, corporations are run as mini-democracies, at least in terms of important corporate decisions. The shareholders, for example, are the owners and they meet at least once a year to elect the directors of the corporation. Once elected, the [...]
San Diego Gas Station Franchises: The Petroleum Marketing Practices Act When we hear the word "franchise," most of us probably think of a fast food restaurant. As we have discussed in previous posts, franchising is an enormous component of the American consumer marketplace and franchises are common in all [...]
San Diego Businesses: Do I Have to Worry About Climate Change Litigation? Climate change litigation is becoming an increasing threat to businesses here in San Diego and throughout California. At the moment, the targets of climate change litigation are big publicly held companies. Just last summer, the federal court [...]
San Diego Employers: Act Now to Avoid Class Action Arbitration As we have discussed, there are many good reasons why San Diego employers want to use arbitration provisions in their employee agreements and want to have their employees agree to waive their right to bring class action lawsuits as [...]
Tips for Handling the Legal Dangers of Workplace Romance Dating and romances between coworkers is common. Aside from lost productivity and lost efficiencies created by both successful and unsuccessful romantic entanglements, the behavior generates many legal dangers and challenges to the employer, including the following: Perceptions by others of [...]
Goonewardene v. ADP, Inc.: Workers Not Covered by Third-Party Beneficiary Doctrine A unanimous California Supreme Court recently issued an opinion providing further guidance on California's third-party beneficiary doctrine. The third-party beneficiary rule relates to contract law and is important for San Diego businesses. In general, parties can agree to [...]
Mixed Signals from Federal Courts on How Employers May Implement Mandatory Arbitration for Employees Of late, mandatory arbitration for employees has been a hot legal topic. As we have discussed on this blog, employers have good reasons for seeking to implement arbitration. Arbitration helps reduce the litigation costs and [...]
San Diego Trademark Use: Use Caution When "Blanding-Down" There has been a recent trend in marketing called "blanding-down" with respect to trademarks and trade dress. Blanding-down is when someone in the marketing department redesigns the company logo or trademark or trade dress by removing complicating elements like a background [...]
Corporate Governance: Directors Cannot Vote by Proxy We wrote recently about use of shareholder proxies. As we discussed, San Diego and California corporations are owned by shareholders, but the management of the corporation is given over to the board of directors. As one court said long ago, "[t]he property [...]
San Diego Mergers and Acquisitions: "Arbitration" Versus "Expert Determination" Contract law truly has infinite flexibility and complexity. Indeed, these are two of the greatest attributes of contract law. Since contracts are creatures of intent, the only limits are the creativity and desires of the parties. One example is the [...]
“Fiji Water Girl” and Contract Formation If you watched the recent Golden Globe Awards (or saw photos after the fact), you probably saw the "Fiji Water Girl." As an advertising promotion, Fiji Water Company, LLC, the company that bottles and sells Fiji Water, hired a model named Kelly Steinbach [...]
Free Speech and Commercial Speech: Ninth Circuit Strikes Down San Fran Billboard Warnings Labels With respect to warning labels and similar types of business regulations, there is an ongoing tension in the law between free speech and the interests of consumers and the public. Free speech is implicated because [...]
San Diego Commercial Leases: To Assign or Sublease? If you have commercial space in San Diego, you more than likely have a lease with the property owner. For various reasons — many quite legitimate business reasons — your company may need to be out from under the obligations of [...]
Mergers and Acquisitions: Three Strategies for Dealing With #MeToo or "Weinstein" Situations If your San Diego business is contemplating a merger or making an acquisition, it is increasingly important to include sexual harassment and good behavior representations and warranties in the early part of the process and to provide [...]
How California Courts Determine the Severability of Contracts Often, people think of a "contract" as some unified whole; a singular "thing." But, in truth, contracts are generally complex and involve a collection of obligations that are agreed to by both parties. Even a simple contract to deliver product contains [...]
To Initial or Not? Thoughts on Requiring Initials for Contract Provisions Among business executives and corporate lawyers, there is an ongoing and long-running debate about the value of requiring a party to a contract to initial various provisions and clauses in addition to signing the agreement. It is common, [...]
Employee BYOD: Compliance with California Reimbursement Laws BYOD is an acronym for "bring your own device." It is increasingly common for employers and businesses to allow or require that their employees use their own devices for business purposes. The most common device is, of course, employee-owned cellphones. But BYOD [...]
Five Reasons for Using In-Writing-Only Contract Amendment Clauses At their core, contracts are merely agreements between persons. There is nothing too mysterious about a contract. Contracts can be written out, can be made orally ("with a handshake"), or can be made via actions like "course of dealings." This is [...]
California Franchise Law: No Franchise if No Franchise Fee In California, franchise relationships are governed by statute. See Cal. Bus. & Prof. Code § 20001 et seq. Under the law, for a franchise relationship to exist, there must be an agreement — either in writing or an oral agreement [...]
Establishing Your Business Credit Rating: What is A DUNS Number? Many successful businesses at some point have incorporated and operate via some corporate entity like a C corporation, an S corporation, a limited liability company, or some other limited liability business entity. Using a corporate entity protects your personal [...]
Franchising News: National Labor Relations Board Reinstates "Entrepreneurial Opportunity" Factor One of the more vexing problems facing San Diego employers is a myriad of overlapping laws, regulations, and jurisdictions. This is readily apparent when considering how to classify a worker as an "employee" or as an "independent contractor." Among [...]
