Do You Need a Buy-Sell Agreement in California? When you establish or run a business in California with multiple owners, navigating the complexities of succession planning is a significant consideration. Among the essential tools for this process is a Buy-Sell Agreement. But do you really need one? This article [...]

Privacy Act Deadline Nears: Record Keeping Required The effective date of the California Consumer Privacy Act ("CCPA") is nearing. See Cal. Civ. Code, §1798.100 et seq. Among the many legal requirements imposed by the CCPA, such as a toll-free telephone number for customers to use, the CCPA requires record [...]

Will California Start Requiring That Employers Police Worker Meal Breaks? An Oregon Court of Appeals recently issued a decision that held that Oregon employers were required to police worker meal breaks. Under the applicable Oregon law and Wage Orders, workers are entitled to an uninterrupted 30-minute meal break for [...]

Can Fox Media Trademark the Phrase "Ok, Boomer"? Fox Media has made a splash in the news by filing an intent-to-use application for a trademark for the phrase "OK, Boomer." For those who have not heard, the "Ok, Boomer" is a retort used by teens and young adults to [...]

In Unusual Case, Ninth Circuit Orders Vacatur of Arbitration Award on Grounds of Partiality In general, arbitration verdicts and awards are final. This is one of the main advantages of submitting disputes to arbitration. In traditional court proceedings, there can be at least two layers of appeal that drag [...]

FTC Begins Requiring "Data Minimization": Is Your San Diego Business Complying? Data security and consumer privacy have been "hot" legal topics for several years. A newly emerging trend in both areas is the idea of "data minimization." As currently defined, data minimization is the idea that a business should [...]

New Guidelines for Social Media "Influencers" Many San Diego businesses are using social media "influencers." This has been an emerging trend in personalized marketing for several years now. Social media influencers use and wear various products from various manufacturers -- usually of luxury goods. Social media influencers are often [...]

Recovering Attorney Fees in San Diego Contract Disputes: Even a Dollar is Enough Says Court If there is litigation over a breach of contract, many well-crafted San Diego business contracts have fee shifting provisions whereby one party or the other can ask the court to award attorneys' fees. These [...]

Proving Copyright Infringement: Facts are Not Copyrightable, Says Federal Judge The producers of the popular Netflix show “Narcos” were vindicated in a recent trial over alleged copyright infringement. U.S. District Judge Rodney Smith ruled that Netflix and the producers did not use copyrighted material from a book written by [...]

Will California Follow New Jersey and Fine Uber For Misclassifying Workers? It has been recently reported that the State of New Jersey is fining Uber for unpaid employment taxes and for misclassifying its workers. New Jersey was the first state to adopt the so-called ABC test for whether a [...]

Eight Days Late May be "Okay" Despite "Time is of the Essence" Clause in Contract In general, California courts will enforce business contracts as written. Indeed, generally, the courts will enforce all provisions even if the provisions work some sort of disadvantage or hardship on one party or another. [...]

California Consumer Privacy Act: Can We Share Data with an Affiliated Business Without Disclosure The California Consumer Privacy Act ("CCPA") is going into effect on January 1, 2020. Among the many open legal questions is whether data can be shared with an affiliated business without the need for disclosure/consent [...]

Uber, Lyft, and Other Companies Back Ballot Initiative to Exempt Gig Drivers From ABC Test California recently amended its Labor Code to protect so-called gig economy workers and mandated that those workers be classified as "employees" as opposed to "independent contractors." See Cal. Lab. Code, §2750.3. This new law [...]

San Diego Business Contract Drafting: Even Apostrophes Matter An interesting decision involving a construction contract was recently issued by the Second District California Court of Appeals. See Regency Midland Construction, Inc. v. Legendary Structures, Inc., Case No. B292602 (Cal. App. 2nd Dist. November 7, 2019). The result of the [...]

What Professions are Exempt Under the Newly Codified “ABC Test” for Independent Contractors? As has been widely reported and discussed, the California State Assembly passed Assembly Bill 5, and Governor Newsom signed, which codified the California Supreme Court's ABC Test for when a worker is to be considered an [...]

Reasons to Form a California Social Benefit Corporation If you are starting a San Diego-based business, you have many options for what type of corporate entity that you can form. The most common choices are a standard corporation and a limited liability company. These are generally used when the [...]

Tips for Drafting an Excellent Company Data Breach Protection Policy With the recent passage and signing by Governor Newsom of Assembly Bill 1130 ("AB 1130") which expands the definition of "personal information" to encompass all types of data that might be used to personally identify customers, patients or clients, [...]

In general, there is a similarity in the way in which California courts interpret California statutes and the way in which courts interpret written contracts. As with contracts, the words used by our Legislators are important -- words matter.

The advantage of obtaining a Certificate of Registration is that the owner of the copyright can then file lawsuits in federal court to prevent infringement and collect damages. Indeed, the owner of a copyright cannot begin a lawsuit without receipt of the Certificate. Legally, the Certificate is presumptive evidence that the copyright is valid and of copyright ownership. However, the Certificate is only a legal presumption.

Starting January 1, 2020, San Diego and California businesses will have expanded notification obligations if there has been a data breach of unencrypted personal information. Your company policies and procedures will need to be updated. If there is a breach, one key fact with respect to the amount and extent of subsequent liability will be the nature, breadth, and effectiveness of your internal privacy protection policies. There are hundreds of data breaches every year and they are expensive for companies experiencing them.

The effective date of the California Consumer Privacy Act (“CCPA”) is January 1, 2020. For businesses and stores in San Diego and California, a new era will commence with respect to their use of in-store video and other consumer tracking methods. One looming question is whether stores will have to cease in-store tracking and surveillance of their customers.

There have been many lawsuits recently filed wherein courts have required that businesses make their respective websites accessible to the blind and visually impaired. The ADA prohibits discrimination against those with disabilities with respect to "public accommodations." See 42 U.S.C. § 12181. The courts have struggled with the issue of website accessibility because websites are not physical locations.

Part of the "due diligence" of a business purchase is to uncover and catalog all of the current, pending, and near-future obligations that are owed by the Seller — those obligations that were incurred while the seller was operating the business. Those obligations should be paid before or at the closing from the proceeds of the sale. Typically, ongoing obligations like rent or utilities are prorated as of the closing date.

In general, all contracts can be terminated. If the contract is silent as to the "how’s and when’s" of contract termination, then the risk of litigation over termination is enhanced. However, termination provisions can largely eliminate this risk in many situations. The key is to differentiate and specify "for cause" and "for convenience" termination.

San Diego and California businesses that operate websites have been confronted with an increasing number of lawsuits concerning website accessibility under the federal Americans with Disabilities Act (“ADA”) and the California Unruh Act. What has been "evolving law" over the last several years has become "settled law." Essentially, businesses must make their websites accessible to the visually impaired if those websites facilitate access to physical locations. The same legal rules will likely apply to any mobile apps operated/owned by your business.

Since the Inwood case, the federal courts have concluded that contributory trademark infringement has two legal elements that must be proven with the second prong having several options. The first element is that some person or entity must commit direct trademark infringement. The second prong that must be proven -- the contributory part of the case -- can be proven one of three ways...

A no rehire provision prohibits a person who has signed a settlement agreement from being hired again by the employer. Sometimes a no rehire provision will be time-limited; but often the clause has no end date meaning a permanent ban from being hired by that employer. However, under this new law -- Assembly Bill 749 -- such clauses are now invalid in settlement agreements.

With respect to website accessibility, the recent decision of the US Ninth Circuit in Domino’s Pizza, LLC v. Robles, 913 F.3d 898 (US 9th Cir. 2019) requires that any business' website must be accessible to the visually impaired if the website is used in connection with a physical location. This ruling is based on the court's interpretation of the federal Americans With Disabilities Act ("ADA") which requires that all places of "public accommodation" be accessible to those with disabilities.

Once again, California has defied the US Supreme Court and has banned employment-related mandatory arbitration. Further, the new act, Assembly Bill 51 ("AB 51"), makes it a misdemeanor crime for an employer to attempt to get employees to sign a mandatory arbitration agreement that is banned by AB 51. AB 51 makes it unlawful for employers to require employees to sign mandatory arbitration agreements as a condition of being employed or continuing their employment. Retaliation for refusing to sign an arbitration agreement is also prohibited.

Prior to Dynamex, the main test for determining the proper worker classification was the "control test." This control test examined various facts related to how much control an employer exercised over the worker. The more control, the more likely the worker should be/should have been classified as an "employee." The Dynamex case overturned the control test and held that the new test would be called the ABC test. The ABC test retains much of the control test as part "A" and adds two additional tests. An employer must satisfy all three tests for a worker to be properly and legally classified as an "independent contractor."

The California Attorney General’s Office finally released proposed regulations to govern how the California Consumer Privacy Act ("CCPA") will be implemented. These proposed regulations will guide how the Attorney General's Office regulates businesses under the CCPA and will be cited extensively by California and federal courts when confronted with legal challenges related to the CCPA. As expected, the proposed regulations offer a lot of extra details, but provide little concrete guidance for businesses that are attempting to comply.

In simple terms, "yes," employee clock-in-clock-out time rounding is allowed under California law as long as the rounding is "neutral" in its application and does not benefit the employer substantially more than it benefits the workers. This is the holding of a recent California Court of Appeals decision.

Trade secrets are protected under both California and federal law. The federal law is called the Defend Trade Secrets Act ("DTSA") and was passed in 2016. It is similar to many state statutes and provides a federal law which can be used to file lawsuits if employees or former employees steal or threaten to steal your business' trade secrets. However, there is a compliance-with-government-request protection provision in the DTSA which requires that certain notices be given.

Before filing a lawsuit concerning employment-related claims of discrimination or harassment (such as sexual harassment), an aggrieved employee first must make a filing with the California Department of Fair Employment and Housing ("DFEH"). The DFEH is the administrative body tasked with overseeing employment discrimination under the California Fair Employment and Housing Act ("FEHA").

Under California law, there are three methods of attempting to prove the joint employer doctrine. If proven, then both, or either, employer may be held liable for any violation of federal or California labor laws. This might include failure to pay overtime or minimum wages or failure to give proper rest breaks, etc. The three methods of proving the joint employer doctrine are:

A recent decision by a federal judge here in California has allowed a class action case against Nestle to go forward based on an allegedly misleading non-GMO label. Two aspects of the package labeling were deemed potentially problematic. First, the labeling indicated that there were no GMO ingredients even though there were potentially GMOs in the ingredient chain upstream from the final ingredient.

In general, here in California, it is "okay" to use so-called "orphan" signature pages for business contracts as long as the parties have in fact agreed to the contract and all of its essential terms. An orphan signature page refers to a separate final page of a contract, where various signature lines are located, which is circulated for original signatures without the whole contract being attached. This one page is signed by the relevant parties and is eventually reunited with the remainder of the whole contract.

Many employers skimp on their job descriptions (or generally avoid doing them). However, this is a mistake, particularly given the heightened protection that California law is providing for workers here in the Golden State. A good and accurate job description is necessary for all of the following legal issues:

At the very basic level, "contracts are promises that the law will enforce." This is the definition provided by WexDictionary run by the Cornell University Legal Information Institute. Legally speaking, here in California and elsewhere, contracts are important precisely because they create legally enforceable obligations.

The new test was adopted by the California Supreme Court in 2018 in Dynamex Operations West v. Superior Court, 4 Cal.5th 903 (Cal. Supreme Court 2018). The new law makes it difficult to classify workers as independent contractors. The law goes into effect on January 1, 2020, and will be retroactive. That means that workers who have been misclassified can seek recovery of unpaid minimum wages or overtime or penalties for untaken meal breaks for the previous three to four years.

As we recently discussed here, the California Supreme Court issued its opinion in OTO, LLC v. Kho, Case No. S244630 (Cal. Supreme Court August 29, 2019), which invalidated an arbitration provision in an employment contract. The case is remarkable in many respects and likely will be an important legal precedent going forward.

San Diego business contracts sometimes contain what are generally called "efforts clauses." Often, these clauses are connected to some approval or resource that one party to the contract must obtain and generally refer to some activity or event that is to occur after the contract is signed. For example, a typical "efforts" clause might be something like this: "Party A will use its best efforts to obtain permitting approval from CITY."

Trademarks and service marks are extremely valuable, and many businesses spend substantial sums of money creating and maintaining trademarks. These are the marks that create the "brand" and help generate consumer loyalty. That loyalty can drive market share and prevent a competitor from becoming profitable. Registering a trademark allows the owner to file a lawsuit in federal court to prevent infringement of the trademark.

The California State Assembly recently passed AB 5 which imposed the so-called ABC test on California employers with respect to how "employees" and "independent contractors" are classified. The author of AB 5 was San Diego Assemblywoman Lorena Gonzalez (San Diego, D). Gonzalez touted the law as an effort to bring fairness to workers in California. AB 5 was aimed at giving "gig" workers the benefits and protections that are afforded to more traditional workers under California's labor laws. Companies like Uber, Grubhub, and Lyft were among the targets of the legislation.

On September 17, 2019, Samsung Electronics received a double-helping of bad news with respect to efforts to force arbitration of consumer class actions related to the Galaxy smartphone. In the first case, the plaintiff filed a class action suit stemming from severe burns allegedly caused by his Samsung phone. See Samsung Electronics America, Inc. v. Ramirez, Case No. 18-16094 (US 9th Cir. September 17, 2019). In the second case, the plaintiff filed a class action alleging false advertising with respect to the marketing of Samsung's phones.

Many San Diego businesses want to protect themselves in the event of litigation with respect to business contracts. Often business contracts contain an attorney fees clause whereby the losing party in the litigation is forced to pay the attorney’s fees and litigation costs of the other party. Under most cases, absent a statute or a contractual provision, if there is litigation, each party must pay its own litigation costs including attorney’s fees. But, by contract, you can require the other party to pay. These are often called "fee-shifting provisions."

Some San Diego employers with workers currently classified as "independent contractors" will likely have to re-classify those workers. One solution that is available is to turn to staffing agencies and contract with such companies to achieve the same flexibility that is obtained by having independent contractors. Essentially, the staffing agency is the employer and will be responsible for providing the employees with various benefits that are mandated by the California Labor Code.

AB 1202 requires any business that collects and "sells" consumer personal data and information must register themselves as "data brokers" with the California Attorney General. Filing a form is required along with a registration fee and the information must be updated annually. The new statute defines a “data broker” as “a business that knowingly collects and sells to third parties the personal information of a consumer with whom the business does not have a direct relationship.”

As with most employment-related questions, the answer is not a clear "yes" or "no." According to a recent decision by the US District Court in the Central District of California, an employee of Union Pacific was properly terminated when his fishing trip vacation photos were posted on Facebook and when the employee -- at first -- was less than honest about being on a fishing trip.

In general, the CCPA applies to any sort of data -- including biometric data -- that is collected by a business about its customers. However, the definition of "customer" or "consumer" is very broad and is not limited to those who may be purchasing goods or services. Thus, many have concluded that employee data and the data collected from employees and about job applicants would be covered by the CCPA. California lawmakers seem to agree and, thus, for the next year at least, employee data was removed from coverage of the CCPA.

In a recent decision, the Oregon Supreme Court held that providing an employee with a negative employment reference can be considered unlawful "retaliation" under Oregon law. See McLaughlin v. Wilson, 365 Or 535 (Or. Supreme Court September 12, 2019). Oregon and California lawmakers tend to take notice of new laws made in each respective state. One wonders if this new legal precedent might soon be followed here in the Golden State.

As with its previous version, AB 51 bans employers from requiring that employees agree to arbitration as a condition of employment. Further, the new law criminalizes any effort to make workers or applicants waive rights to bring litigation or suit for alleged violations of the California Fair Employment and Housing Act (“FEHA”). The FEHA is the main California anti-discrimination statute.

AB 5 codifies, with many important exceptions, the California Supreme Court's Dynamex decision from April 2018. See text of AB 5 here. The Dynamex decision imposed on California businesses a new test for when workers can be classified as independent contractors. The new test is called the ABC test. To properly classify a worker as an "independent contractor," all three parts of the test must be satisfied. AB 5 makes the ABC test part of California's statutory law which effectively prevents Dynamex from being overturned.