Even if you are unaware of the fact, your San Diego business has trade secrets that are entitled to legal protection under both California and federal law. However, certain steps must be taken to protect the secrecy of your trade secrets. If you post an online video showing how to make your "special sauce," for example, the secret is out and there is no longer a trade secret to be protected. This is what happened with the special sauce that is on the Big Mac sandwich.

The California Court of Appeals recently affirmed a trial court ruling that a restaurant did not have to reimburse employees for slip-resistant shoes. The court held that the slip-resistant shoes were not a "necessary expenditure" in the sense of being part of a unique uniform mandated by the restaurant employer

For a San Diego business contract to be formed -- to be enforceable in our courts -- the parties must come to an agreement. Most often, "agreement" is indicated by a signature or, with online contracts, by clicking on the "I agree" box. There are other methods of showing "agreement." One can indicate agreement with a contract by signing a different document, one that relates to and refers to the contract in question. That is one of the legal lessons from the recent California Supreme Court decision in Monster Energy Co. v. Schechter, Case No. S251392 (Cal. Supreme Court July 11, 2019).

There are many benefits to allowing assignability in many circumstances. So there is no reason to always say "no" to allowing assignment. However, there are legal and practical issues to consider and you should seek advice and guidance from an experienced San Diego corporate attorney. Here are some of the considerations.

In part one of this series, we discussed pitfalls and problems with respect to backdating a contract among sophisticated parties. With sophisticated business parties and where the contract has been negotiated, backdating can be "okay," but there are pitfalls to avoid.

There are some circumstances in which parties to a contract want to use a date on a business contract that is prior to the date that the contract is actually signed. This is the general meaning of "backdating a contract." As between sophisticated business parties and when the issue of the contract date is fully negotiated, backdating is not illegal.

The Federal Drug Administration ("FDA") joined a growing list of federal and state agencies that are intending to punish companies and businesses that pay social media influencers without fully disclosing the relationship and the payments.

Effective January 1, 2020, San Diego and California employers will have to be careful about their grooming and business professionalism policies and procedures with respect to hair types and styles.

With longer business contracts, there is a potential for conflict between the provisions in the contract. Indeed, the more provisions and the more pages, the more likely there may be a conflict among the provisions in the contract. This is the reason that it is important to retain an experienced San Diego corporate attorney to review and customize your business contracts.

In general, corporations are governed by their bylaws. The bylaws are adopted by a vote of the shareholders when the corporation is formed and, generally speaking, the shareholders can change the bylaws at any time by a vote of the controlling shareholders. However, there are some limitations.

One of the most important reasons to use written contracts for your San Diego business is the ability to use the contract to help eliminate risks in the event of breach. Generally speaking, the measure of damages for breach of contract here in the Golden State is "benefit of the bargain."

Last year, the California Supreme Court decided the case of Troester v. Starbucks Corporation, 5 Cal. 5th 829 (2018). In Troester, the court broadly held that the California Labor Code required that workers must be paid for all time worked, even for required tasks that only take a minute or two each day.

Every San Diego business that has employees should consider having an employee handbook. There are many state- and federally-mandated notices that must be provided and a host of company policies that must be summarized for your existing and new employees.

San Diego Business Contracts: The Difference Between an Indemnity and Damages Cap Without the assistance of an experienced San Diego corporate attorney, it can be difficult to distinguish different parts of a business contract. For example, many confuse the legal meaning and purpose of an "indemnification" clause, particularly if [...]

"Intellectual property" includes assets like trademarks, patents, and copyrights but also includes trade secrets. Indeed, trade secrets are the most common form of intellectual property owned by California businesses. Intellectual property is protected under both California and federal law.

San Diego Earn Out Provisions: Tips on Avoiding Post-Acquisition Litigation When a small-to-medium sized San Diego business is acquired by another business, often the new owners want to retain the previous owners in an employment capacity. This can be beneficial to both sides of the bargain. The new owners [...]

The US Ninth Circuit Court of Appeals recently affirmed that knowingly including inaccurate information in your copyright application will result in your copyright being held invalid. See Gold Value International Textile, Inc. v. Sanctuary Clothing, LLC, Case No. 17-55818 (US 9th Cir. June 4, 2019). The case provides an example where seeking the advice and counsel of an experienced San Diego corporate attorney during the copyright application process would have helped achieve a more desirable result.

Trade and service marks are some of the most powerful tools that a San Diego business can use to protect and expand its market share. The process of establishing a trade/service mark is essentially one of creation and use. Once in use, the mark can be registered with the US Patent and Trademark Office ("USPTO") under the provisions of the federal Lanham Act. An experienced San Diego corporate attorney can help with the legal requirements and the registration process.

Under California law, the simple answer is, “Yes, you can have a perpetual contract.” The more complicated answer is, "Yes, if that is what the parties agree to and they express that intent unambiguously in the contract." An experienced San Diego corporate attorney can help draft your business contracts to reflect what you and your contracting partners want with respect to termination.

The US District Court up in San Francisco recently handed down a decision with respect to an Uber user on the issue of contract formation.

San Diego Business Contracts: Using Insurance Clauses can Help Avoid Litigation and Reduce Costs/Risks The main function of business contracts is to set out the mutually-agreed obligations of the parties. Business contracts can also be used for secondary and tertiary purposes including reducing the likelihood of litigation and the [...]

Buying goods and services off the internet has become commonplace. But extreme caution is in order with respect to using and buying form/template contracts offline. Bluntly, it is just not a good idea and making a mistake will be expensive both in terms of a potential loss of your bargain and litigation costs if there is a lawsuit.

In general, San Diego businesses and consumers can only be bound to a contract if they agree to the contract. This is the essential element of entering into a contract knowingly. With online contracts -- like a website Terms of Service Agreement -- consumers often argue that "I did not know I was agreeing to anything."

Most contracts are enforceable as written and, once entered into, failure to perform one's obligations can lead to a lawsuit. However, there are a few circumstances in which a party may rescind a contract. Rescinding is like revoking the contract. As California Civil Code section 1688 states: "A contract is extinguished by its rescission." (Civ. Code, § 1688.) Rescission of contract is governed by California statutes.

What is "Conspicuous?": Guidance From the Federal Trade Commission With respect to certain types of consumer contracts and various types of notices, California statutes and case law often impose the requirement of "conspicuousness." As an example, if you have a provision in your website Terms of Service that requires [...]

As many San Diego employers know, in April 2018, the California Supreme Court changed the test for when a worker is to be classified as an "employee" or an "independent contractor." The new test is called the "ABC test" and essentially makes most workers "employees" here in the Golden State.

A US federal judge has recently ruled -- again -- that buying a condominium unit is not buying a "security" as defined by the California Corporate Securities Law of 1968.

Buy-sell Agreements are essential for San Diego businesses. This is true whether the business is a general partnership, a small closely-held corporation, a limited liability company, or another corporate form. A buy-sell agreement sets the terms and conditions under which the ownership of a business can be sold or transferred. The goal of a well-drafted buy-sell agreement is to provide the owners with "exit strategies" and to limit the expense of litigation when the need for "exiting" is looming.

In good news for San Diego businesses facing lawsuits about website accessibility, at least one court has recently dismissed a case because corrective actions were completed. As we have discussed before, blind and deaf users of internet websites have filed numerous lawsuits alleging that various websites are inaccessible, in violation of the federal Americans with Disabilities Act (“ADA”).

San Diego Corporations: Commercial and Election Chatbot Statute In September 2018, the California State Assembly passed a chatbot disclosure law (SB-1001). Then-Governor Brown signed the law, and it goes into effect on July 1, 2019. Essentially, the law requires that a website disclose to the user whether the user [...]

The legal concept of "ratification" is most commonly raised and used with respect to contracts. However, the doctrine of ratification also has application in the corporate world. An experienced San Diego corporate attorney can provide advice and guidance with respect to corporate ratification.

. In this article, we begin a series of articles describing the "parts of a contract." Let us assume, for example, that you hire an experienced San Diego corporate attorney to form a California professional corporation for you and your professional partners. As part of that process, you may want one or more agreements among owners to detail the understandings among you and your colleagues with respect to how the California professional corporation will be run, payment and bonus structures, buy-sell provisions, and more.

San Diego Asset Purchases and Avoiding Successor Liability: "Adequate Consideration Paid" is "Fair Market Value" In general, under California law, if a person or business buys the assets of corporate entity, the purchaser does not assume any of the liabilities or obligations of the selling corporation. This is the [...]

Business contracts can be confusing at times. That is one reason that is important to consult an experienced San Diego corporate attorney to review contracts that you are being asked to sign, and/or to draft contracts that you want to present for signature. One confusing aspect of business contracts is the difference between an "amendment" and an "addendum" to a contract.

In general, for a contract to be binding and enforceable, a person or San Diego business must consent to the contract. In other words, a person or business must agree to be bound. However, it is possible for a person or business to agree-after-the-fact. This is called "ratification" of a contract.

Personal brands are just like all brands -- they identify you as a unique commercial source of whatever goods or services or creative innovations in which you specialize. Part of the rise of personal brands is driven by the rise of the freelance labor market. Brands help you market, apply your skills creatively, engage with your existing and potential customers, and supercharge the growth of your market share

Every San Diego business with employees needs to have an employee handbook. An experienced San Diego corporate attorney can help draft the contents of your employee handbook and can offer advice and counsel with respect to what should be included and what mistakes to avoid.

Joint employer situations are common in today's marketplace. Joint employer circumstances are driven by several factors. First, San Diego businesses have long been using temporary staffing and flex-schedule agencies to find workers to fill work gaps left by full-time employees.

In general, when your San Diego business enters into a contract, the obligations that are imposed are the ones written in the contract -- the obligations to which the parties have agreed to bind themselves. Normally, if something is not written in the contract, then neither party is bound to that obligation. There are, however, a few exceptions to the rule where, by action of California law, certain obligations are implied.

A recent California Court of Appeals decision reaffirms that the duty to defend under a contractual indemnity clause is immediate. See Centex Homes v. R-Help Construction Company, 32 Cal. App. 5th 1230 (Cal. App. 2nd Dist. March 11, 2019).

Solving the "Liquidity Problem" is One Key to a Successful Business Divorce When you start your San Diego business with colleagues and friends, everyone hopes that the business will succeed and the friendships will last forever. Sadly, this is not always the case. For various reasons, business partners and [...]

"Materiality" Not Relevant When Contract Specifies Grounds for Termination As a general rule under California law, a breach of contract must be a "material" breach. That is, the breach must be important and relevant to the core purposes and intents of the contract. As an example, assume there is [...]

What is a Compliance with Law Provision and Why do I Need it in My San Diego Contracts? A "compliance with laws" provision requires that both parties to a contract must comply with the applicable laws with respect to some core aspect of the contract. These types of provisions [...]

What is a Writ of Attachment? A writ of attachment is a mechanism that San Diego business owners can use when a lawsuit has been filed to help collect on debts and ensure that monies are available from the debtor when a judgment is obtained. In this respect, a [...]

Consumer Privacy Act: Could the Courts Expand the Private Right of Action Under the CCPA? It has recently been reported that the California Senate failed to pass Senate Bill 561 which would have allowed a broad private right of action to consumers in the event of violation of the [...]

San Diego Commercial Leases: Who Pays if The HVAC Goes Out? Who pays if the HVAC — heating, ventilation, and air conditioning — stops working depends on what was negotiated in the lease. Repairing or replacing an HVAC system can be very expensive. Consequently, you should have an experienced [...]

Am I Bound by a Contract That I Signed Even if I Did Not Read it? In brief, "yes." A person who signs a contract is bound by the contract even if the person does not read the contract before signing. As discussed below, this applies to any contract [...]

Piercing the Corporate Veil to Reach Assets of Non-Shareholders Generally, forming a San Diego and California corporation will provide a shield against a creditor attempting to reach the personal assets of the shareholders of the corporation. In general, a shareholder of a corporation is not personally liable for the [...]

What is a "Corporate Opportunity"? If you are a major shareholder or owner of a corporation or limited liability company, you owe certain fiduciary duties to your company and to the other owners. One of the fiduciary duties that is owed is the duty to not divert corporate opportunities [...]

Pro-Tips (Part 3) for a Good Company Telecommuting Policy: Data Security If your San Diego business allows or is contemplating allowing work-from-home or other remote employees, your business must establish an official company telecommuting policy. There are a host of legal and labor law issues that must be addressed. [...]

Does Your Letter of Intent Have a Copeland v. Baskins Robbins Problem? Under California law, letters of intent are problematic and should be signed only after careful review and counsel from an experienced San Diego corporate attorney. Businesses often use a letter of intent as a method of listing [...]

Corporate Governance: Breaking Board Deadlocks with a Provisional Director Like any human activity, running a business can be fraught with disagreements and disputes. Sometimes these disagreements are severe enough to result in deadlocks on the corporation's board of directors. This is possible if your corporation has an even number [...]

Pro-Tips (Part 2) for a Good Company Telecommuting Policy: Safety and Workers’ Comp In part one of this series, we discussed how to write a well-considered and effective company telecommuting policy with respect to meal and rest breaks. Even if you have employees who work from home or otherwise [...]

What to do if a Contract is Lost or Destroyed? Sometimes it happens that a contract gets lost or is destroyed. The contract might not be filed properly among your business records, or the contracts might have not been boxed up during the most recent relocation, or the box [...]

Top Solutions for "Fixing" Unfinished Contracts It is not unusual for a business contract to end up being "unfinished" or incomplete in its final form. This is particularly true with longer contracts that might have been subject to extensive negotiation. An example might be when the finished signed contract [...]

San Diego M&As: Assignability of Confidentiality Agreements Under California law, most contracts and contractual rights can be freely assigned. Legally speaking, an assignment is a transfer of the rights (and obligations) of a contract held by one person/entity to another. Assignments are common when there is a business acquisition [...]

Top Reasons for Avoiding Unwritten Contracts Here in San Diego and the rest of the Golden State, certain types of unwritten contracts can be enforced in the courts. Certain contracts, like contracts for the sale and purchase of real estate, must be in writing, but a lot of other [...]

Pro-Tips for a Good Company Telecommuting Policy: Dealing With Rest/Meal Breaks Many San Diego employers have workers that prefer to work from home and, if the job duties can be effectively accomplished from a remote location, many employers like the concept, too. However, if you have work-from-home employees or [...]

San Diego Business Law: Is Advertising a Unilateral Contract? As discussed below, under most circumstances, advertisements are not considered "unilateral contracts" in California. When most San Diego business owners think about "contracts," what comes to mind is probably the standard bilateral contract. As the name implies, "bilateral" contracts are [...]

What are Implied Contracts? Implied contracts are specifically allowed under the California Civil Code, §1621. That provisions defines an implied contract as "... one, the existence and terms of which are manifested by conduct." In interpreting this provision, California courts have held that the standard rules with respect to [...]

Some Legal Lessons as Uber Reportedly Settling Most Arbitrations: $146-$170 Million It has recently been reported that Uber is in the process of settling most of the arbitration claims that have been filed by its drivers. According to the reports, the settlements will total between $146 million and $170 [...]

Should You Designate Your Employee Handbook as "Confidential?" NLRB Says "No" Employee handbooks are a useful way of bundling together various information and notices that an employer needs and wants to provide to employees. Handbooks are particularly useful for newly-hired employees. Occasionally, the question arises whether an Employee Handbook [...]

Five Top Reasons for Not Using Off-the-Internet Form Contracts Business contracts have important and sometimes expensive legal consequences. Contracts should be taken seriously and be treated as seriously as every other aspect of your business. A good contract can make the difference between a successful business transaction and a [...]

Acceptance of a Contract by Silence, Inaction, and Subsequent Action An interesting case out Texas recently came to our attention showing an intriguing example of how silence and subsequent actions can be deemed by a court sufficient to create a contract. Normally, we deal with California cases, but, occasionally, [...]

Reverse Morality Clauses are Becoming More Common Hollywood celebrities have long been required to sign agreements containing "morality clauses." These generally state that the celebrity will not engage in various activities or make various public statements that "materially damage or injure" the reputation of the film/entertainment studio and/or production [...]

Strategies for Renegotiating Value-of-Contract Limitation of Liability Clauses Limitation of liability clauses have long been upheld as valid by courts in San Diego and elsewhere in California. However, serious caution is in order if your business is being asked to sign an agreement that contains a limitation of liability [...]

U.S. Department of Labor Issues Guidance on "Employee-vs-Independent Contractor" Question Adding more confusion to San Diego and California labor laws, on April 29, 2019, the US Department of Labor ("DOL") issued a Guidance Letter on the question of "employee" versus "independent contractor" with respect to the federal Fair Labor [...]

San Diego Business Contracts: Arbitration Agreement Held to Have Retroactive Effect If a business contract is written correctly and broadly enough, then the contract can have a retroactive effect. This is the holding of a recent California Court of Appeals case with respect to an arbitration agreement. See Salgado [...]

Dynamex Applies Retroactively Says 9th Circuit: Businesses Now at Risk Back to 2014 The US Court of Appeals for the Ninth Circuit recently held that the Dynamex decision applies retroactively. See news report here. Dynamex was decided in April 2018 and changed the rules on how California businesses are [...]

Protect Your Company's Twitter/Social Media Accounts With "Claim and Delivery" (Replevin) Clauses When an employee separates from a business — voluntarily or involuntarily — one of the thornier problems crops up if the employee exits with a Twitter handle or social media account. Speed is of the essence in [...]

Assemblymember Lorena Gonzalez (D., San Diego) Introduces Bill to Codify Dynamex Decision State Assemblymember Lorena Gonzalez, elected from here in San Diego, has recently introduced a bill -- known as AB 5 -- that would convert the Dynamex decision into statutory law. See news report here. As we have [...]

"No" to Implied Class Action Arbitrations Says SCOTUS In another sure-to-be-controversial decision, the US Supreme Court, by a 5-4 margin, recently held that class action arbitrations cannot be compelled unless explicitly agreed to. The case is Lamps Plus, Inc. v. Varela, Case No. 17-988 (US Supreme Court April 24, [...]

San Diego Mergers & Acquisitions: Are No-Shop Clauses Valid in California? In a merger and/or acquisition agreement, often the parties agree to what is called a "no shop" clause. A typical "no shop" clause prohibits a seller from soliciting or considering new or alternative bids for the business for [...]

Thoughts on Legal Risks Re: Your CCPA Data Collection and Use Notices The California Consumer Protection Act ("CCPA") is going into effect at the beginning of 2020. There are various statutes being proposed right now in the State Assembly intended to make the CCPA even more protective of consumers. [...]

Mergers and Acquisitions: Attention to Detail is Essential During Due Diligence A recent California Court of Appeals decision gives a good illustration of the importance of paying close attention to every detail of important contracts during merger and acquisition due diligence. See Triyar Hospitality Management, LLC. v. WSI (II) [...]

What is a Suit for “Trade Contract Price” When your San Diego business delivers goods, but you are not getting paid, you have several options in terms of filing a lawsuit. First, you can sue for breach of contract — hopefully, a lawsuit based on a written contract. Here [...]

False Advertising/Labeling: Ninth Circuit Holds That Standard for "Literally False" is Lenient Two recent opinions handed down by the US Ninth Circuit in San Francisco have clarified that the summary judgment legal standard for "literally false" labeling and advertising is a lenient standard -- preponderance of the evidence. See [...]

Confidentiality and Nondisclosure Agreements: Three San Diego "Must-Use" Circumstances Confidentiality and nondisclosure agreements are essential to any San Diego business. A confidentiality and nondisclosure agreement is an agreement that protects the confidentiality of your company's data and trade secrets. These agreements are not just for inventors or for those [...]

The Importance of Checking Corporate Status Before Contracting If your San Diego business is entering into a contract with another business, it is important to investigate the status of the corporation or other entity form with which you are about to enter a relationship. An experienced San Diego corporate [...]