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Reaching a settlement in an employment dispute can be a relief. However, negotiating the terms of a settlement agreement can also be complex because it must cover the claims, possible compensation and any contingencies. A common contingency that California employers include is a “no-rehire” clause, but an Assembly bill signed by Gov. Gavin Newsom will no longer allow these clauses in any settlement agreements. WHAT IS A “NO-REHIRE” CLAUSE? The “no-rehire” clause of a settlement agreement allows an employer to avoid rehiring or deny employment to an applicant without facing charges of discrimination. These clauses only apply in the specific circumstances that: The applicant was a former employee of the business; and The applicant and employer were both involved in an employment dispute. These clauses allowed employers to end the professional relationship with the employee and avoid any future legal issues with them. THE CLAUSE IS BANNED, BUT EMPLOYERS DO NOT HAVE TO REHIRE Gov. Newsom signed Assembly Bill 749 on October 12, 2019. This bill bans employers from including “no-rehire” clauses in any future settlement agreements. It will also make any of these clauses in current settlement agreements void. However, the bill does not prevent employers from: Ending the employment relationship with the employee; Not rehiring the employee after reaching a settlement agreement, as long as this is not in retaliation; or Including a “no-rehire” clause if the employee in question participated in workplace harassment. Therefore, employers cannot use the clause, but they can still act on it if they have a legal reason. But state lawmakers banned the clause itself because they believe that the restrictions of a “no-rehire” clause violate an employee’s rights. Banning these clauses will likely create some new challenges for employers. However, they still have options to protect their businesses from problem employees and disputes, even without these clauses.

In the first few months of 2020, the world’s primary concern has been COVID-19 – more commonly known as the coronavirus. The widespread virus has devastated several individuals and the U.S. stock market and economy. California declared a state of emergency over the virus on March 4, and issued a stay at home order that has now been extended to at least May 15, 2020. According to a new report, businesses could experience considerable effects from the virus as well that could leave them facing serious litigation. THE VIRUS COULD LEAD TO LAWSUITS FOR SEVERAL BUSINESSES Fortune magazine reports that the coronavirus could have a long-lasting impact on businesses even after the outbreak subsides. These impacts could include: Significant disruptions in business; Contract disputes if disruptions affect business proceedings; Disputes over business insurance coverage; and Employee privacy issues. All of these effects could leave businesses facing a flood of lawsuits. Many studies have found that it is true that large outbreaks of infectious diseases can have detrimental effects on companies since consumer fears can influence the market. Additionally, large companies and industries are also held to higher standards to protect both the public and their employees in extreme and frightening cases like this. California business owners must be aware of these potential impacts and risks, so they can: Plan to manage hazards and incidents in the workplace; Take proper action to protect their business; Reduce the effect the virus could have on the business; and Prevent the risks of these lawsuits before they happen. Taking these risks seriously and staying ahead of them can help business owners protect their employees and companies, as well as minimize the threat of potential lawsuits in the future.

Have you, as Summoner, been able to guide your Champion to destroy a Nexus or two? If you are one of the estimated 100 million active League of Legends players world with League of Legends, it is likely that you fully understand how elusive victory can be in the online battle arena. Those unfamiliar with the popular streaming game might not understand its terminology, but will regardless understand the stakes in intellectual property litigation brought by League of Legends developer Riot Games. The Beverly Hills company has filed a claim against a far less well-known esports developer called Riot Squad. In its lawsuit, California’s Riot Games claims that Chicago’s Riot Squad “hopes and intends that by its use of the Riot brand name, consumers will mistakenly believe that its esports organization is in some manner associated with, sponsored or endorsed by, or otherwise affiliated with Riot and its hugely popular products and services.” It should be noted that Riot Games has secured trademark protections for “Riot” and “Riot Games” when the terms are used in connection with esports and video games, the firm said. Riot Game has asked the U.S. District Court in the Central District of California’s Western Division to stop Riot Squad from using its trademarked “Riot” terms, award damages and require the fledgling firm to “deliver up for destruction” all products and materials using the terms. A news report on the dispute noted that Riot Squad does not own a League of Legends team. Rioters around the world are getting ready for the upcoming 10th anniversary of League of Legends with a day of streamed activities. Individuals and companies that need to protect their intellectual property can enforce their IP rights with the help of an attorney experienced in protecting client interests in intellectual property disputes.

Central to the success of every business is its strategy to stay ahead of the competition. Part of that includes finding, empowering and retaining top talent – keeping them away from other companies. It’s why so many businesses ask critical workers to sign non-compete agreements. If that individual leaves, they won’t empower the competition in doing so. California, however, has notoriously strict restrictions on non-compete agreements. So what is actually feasible for a business looking to protect its interests here? NARROW EXCEPTIONS TO THE NON-COMPETE BAN California law declares that any contract limiting someone from “engaging in a lawful profession, trade or business of any kind is void.” In essence, non-compete agreements are banned and the courts will not view them as enforceable. This occasionally holds true even if there is a choice-of-law provision specifying the agreement should follow another state’s laws. There are a few exceptions. However, they are narrow in scope. Non-compete agreements may be enforceable for: Current employees looking to moonlight Situations where someone who is buying a company wants to prevent the seller from competing with a new business Business partners or LLC members who mutually agree to not compete should they leave or the company be sold SO HOW DO I PROTECT MY BUSINESS? A non-compete can be effective in some circumstances, but it is important to remember it is only one tool. Businesses have a range of legal options to help them protect their interests. For example, just because a former employee did not sign a non-compete agreement doesn’t mean they can go around sharing trade secrets and confidential information with a new employer. Similarly, a former worker attempting to skirt intellectual property regulations as part of a new career step may also run afoul of the law. California businesses are not powerless. While these cases may be complex, often requiring a dedicated business law firm intent on finding a solution, pursuing them can provide a layer of protection to concerned entrepreneurs. Whether it is through well-planned litigation or dispute resolution, businesses can get the support necessary to see things through.

2019 was filled with employee protests claiming they are not getting the pay they deserve. Uber drivers objected to their employment and pay status. Amazon employees across the country protested the caps on their work hours and pay. AB 5 in California is wreaking havoc by virtually eliminating the independent contractor. And the list goes on. Wage and hour claims might be some of the most common disputes that employers face, but that does not mean that employers should underestimate them. These disputes can derail businesses and cause a business enormous distress. Here are some critical tips to help California employers prevent any wage and hour violations to avoid these disputes. BE AWARE OF NEW CALIFORNIA LAWS The most crucial step is for employers to understand the details of California’s employment laws–especially the most recent ones. For example: California lawmakers passed a law that increased the minimum wage for most employees to $12.00 per hour; and This January, Assembly Bill 5 went into effect. This law will change how employers classify their workers between contractors and employees. Employers must stay up to date with all employment and wage laws to protect their business. CONDUCT AN INTERNAL PAY AUDIT Business owners do not have to–and should not–wait for an employee’s dispute to lead to an investigation into their pay records. It might be helpful for employers to conduct their own audits to ensure they comply with both state and federal wage and hour laws. MAINTAIN ORGANIZED RECORDS Employers should keep records that cover several details, including: Each employee’s name; What kind of pay they earn; and Any relevant financial documents. This may seem like a tedious responsibility, but it can help reduce the risk of a dispute before it happens. ENSURE YOU CAN PAY EMPLOYEES ON TIME This might seem self-evident, but it is still critical. Federal and California laws are incredibly strict when it comes to employers withholding, reducing or holding back an employee’s pay since any of these actions violate the Fair Labor Standards Act. If employers are having trouble paying their employees, it might be necessary to restructure employment or budget plans to ensure they continue to adhere to the law.

Trade secrets are at the heart of most successful businesses, giving them a distinct advantage over competitors. This value is precisely why trade secrets are often the target of thieves or disgruntled employees. When it comes to protecting your company should something go wrong, it’s vital you proactively do one key thing: treat your trade secrets like secrets. KEEPING TRADE SECRET INFORMATION SECRET California offers a specific definition of what constitutes a trade secret. The secret must be some type of information – such as a technique, process, formula or program – that: Is not generally known by the public Derives value from the fact it isn’t widely known Its owner takes steps to protect It’s that last bullet point that can get companies in trouble. The World Intellectual Property Organization recounts a case in which a former employee of a bookkeeping company was charged with violating trade secrets. They claimed the former worker was inappropriately using the company’s client lists. The case was dismissed, however, when it was discovered those same client lists were often available for anyone to see. They were left visible on desks, saved on computers many people used, and even placed in areas where the public and maintenance staff could see them. Accordingly, be able to demonstrate that company safeguards are in place and enforced to keep trade information secret. POSSIBLE SAFEGUARDS It’s vital that companies take steps to actively protect trade secrets – not just in the event of a court case, of course, but also to ensure this information does not fall into the wrong hands. This could mean: Labelling related documents or items as “top secret” Restricting access to the information Setting up non-disclosure agreements and other protections with vendors Developing an employee training plan Securing computers that hold the information By prioritizing the secrecy of trade secrets, you can help protect yourself and your company. WHAT IF TRADE SECRETS GET OUT? Unfortunately, sometimes a trade secret leaks or is taken from the company. In these cases, your best next step is likely legal action. A successful lawsuit might lead to damages for any economic harm, an award for attorneys’ fees and injunctive relief. Intellectual property laws are complex, especially in the digital age, but protecting your rights is possible.

We have discussed the California Consumer Privacy Act (CCPA) in past blog posts. This law has brought monumental changes to how companies manage their consumers’ information as of January 1, 2020. Many business owners across California share two primary concerns about this new law. Here is a brief overview of those main concerns. THE ECONOMIC IMPACT OF COMPLYING WITH THE LAW WILL BE HIGH As we have discussed before, many business owners are particularly concerned about what it might cost them to comply with the CCPA. To comply, businesses will generally have to: Adjust their privacy policies regarding consumer information; Change how they process and store personal data; and Stop selling consumer data, which impacts how many businesses operate. Making these changes will likely be expensive. And the estimated costs released in October 2019 did not necessarily ease business owners’ worries. The California Department of Finances estimates that complying with the law could cost more than a total of $55 billion. And that is only calculating the initial costs. Individual businesses can expect an average cost of $200 million or more to comply, depending on their circumstances. THE RISK OF LITIGATION BUSINESSES FACE COULD INCREASE Business owners understand the risk of litigation they face, and there are strategies to reduce those risks. However, the CCPA is new territory for businesses and consumers alike. According to Bloomberg Law, this could significantly increase the risk of litigation and lawsuits businesses face. There are a few reasons for this, including: Consumers have a private right of action they can take if companies violate the CCPA; The CCPA does not yet include a strict burden of proof, like California’s current data breach laws do; and Since the law will be so new, courts are not yet sure what can and cannot be litigated. If consumers take legal action against companies for violating the CCPA, they can sue for $750 per incident. This might not seem too significant, but those costs can quickly add up. These two concerns are valid. And it might be beneficial for business owners to consult an experienced attorney and take action to protect their business and minimize risks, to prepare for when the CCPA does go into effect.

Many California entrepreneurs nowadays share their dream of starting a business with their friends or even their family members. A business partnership is often a strategic way to approach a business. It allows business owners to pool their money, combine resources and run a business more effectively. One of the primary benefits of a partnership is gaining different perspectives that help create new business ventures and reduce risks. However, when those perspectives vary too much, it is common for business partners to run into disputes. Partnership disputes can stem from several issues, including: Disagreements about each partner’s level of involvement; The disclosure of confidential information; and Conflicts regarding compensation. Not every business partnership will face these challenges, but it is always essential to have a partnership agreement in place to handle these possible disputes. HOW EFFECTIVE IS THE PARTNERSHIP AGREEMENT? When business partners start a company together, there are several legal forms and applications they must complete. However, the partnership agreement between partners is one of the most important. It is often the key to resolving disputes. An effective partnership agreement should cover several details, including: How much control each partner has over the business; Each partner’s specific role and responsibilities; How the partners will distribute compensation; The process of decision-making for the company; and most importantly The strategy for resolving any disputes. A partnership agreement must address all of these details. That way, partners can refer to the agreement in any disagreement. DISPUTE-RESOLUTION STRATEGIES SHOULD BE SPECIFIC When creating the partnership agreement, it can be challenging to think of the worst-case scenario of a dispute. However, it is essential. This can involve a step-by-step plan, including: How a partner should inform the other of their disagreement; How the partners will approach discussing the conflict; Establishing a third party to be present in the discussion; and Whether the partners wish to pursue mediation or arbitration. Creating a clear-cut plan that details how business partners will resolve a dispute gives them the necessary guidelines to follow in the event of a dispute. IT IS CRITICAL TO PUT PERSONAL FEELINGS ASIDE The reason that partnership disputes are often so difficult is that partners are often friends or family. And those relationships often involve incredibly personal feelings. These relationships are important in life, but they often only make business disputes worse, and, in turn, affect the entire business. Therefore, it might be helpful to address that personal relationship in the partnership agreement. Business owners must set aside their emotions to protect the business’ future.

Many businesses across the country rely on trucking companies to deliver their products on time. Delivering freight or products by road is still the most common way to transport goods, which keeps this industry growing. However, a new California law could leave many trucking companies facing new challenges and risks. New law to regulate carbon emissions California has established new regulations to reduce carbon emissions. This regulation includes a few requirements, such as: All trucks larger than an F-450 must pass the emissions test from January 2020 to 2023; All trucks must have a special filter that removes most toxic particles from their emissions; and All trucks must have an engine from 2010 or later. If the trucks do not meet these regulations, they cannot register with the DMV or drive on the road. Many trucking companies are concerned This new regulation is causing concern among many trucking companies who operate in or through California, including, of course, increased operation costs. Common costs include: Between $80,000 and $150,000 for a new truck; Each driver’s pay by each mile they drive; An average of $10,000 for insurance, per truck; Varying costs for repairs or new equipment each year; and Variable marketing costs to get business. Paying for newer engines and special filters by the deadline in 2020, on top of these annual costs, is being balanced against the cost of not complying with the new regulations, with either or both alternatives putting their company at financial risk. How can trucking companies reduce costs to comply with this new rule? Even the smallest internal adjustments might help trucking companies navigate these new regulations successfully, such as: Practice regular maintenance to lower repair or replacement costs; Revisit the overall budget to determine which costs can be eliminated; Reconsider routes to increase efficiency; and Ensure all drivers follow safety protocols.

Because technology is advancing so quickly, intellectual property faces more risks than it has in the past. More business owners find that other parties are using their trademarks to purposefully fool consumers into purchasing their products. Of course, business owners have the rights to their trademarks, and therefore the right to take legal action against infringement. Generally, the first step to stop an infringer from usurping your trademark is to send a cease and desist letter. This is a legal notification that warns the other party they are violating the law, and that the business owner will take legal action if they continue to do so. These letters may sound simple, but they should include certain details to be effective. Here is a brief overview of some of the essential details that a cease and desist letter should include. Business owners should cite their rights First, business owners must establish that the trademark is theirs by right. This often involves providing: The trademark registration; Proof of ownership; and Evidence of the infringement. It might be helpful to cite the federal trademark laws and California statutes that protect those rights as well. Describe the infringement violating those rights This might seem tedious since the other party might already be aware of the infringement. However, business owners must make it clear that they are aware of exactly how the other party has violated their rights. So, business owners should list all of the specific usages and infringements on their trademark. Give a specific deadline The letter should provide specific instructions, including: What actions the infringing party must cease doing; The date they must desist by; and The consequences of not meeting that deadline. As most business owners know, it is critical to be precise and specific when listing these instructions. Otherwise, the infringing party might find a loophole that could increase the risk to the business owner’s company. It is often beneficial to consult an attorney when writing a cease and desist letter to ensure that it meets the criteria and works effectively to protect the business.

Employees have the right to report labor violations in good faith. And if they file a complaint or a report, they also have state and federal protections against retaliation from their employers. Most employers understand that retaliation is illegal. However, there is much more to know than that. Here is a quick summary of California’s anti-retaliation laws for business owners. California prohibits retaliation for many reasons It is against California law for employers to retaliate against their employees for a wide range of reasons, including: Reporting workplace harassment Serving jury duty Taking time off for childcare Holding specific political beliefs It is clear to see that workplace retaliation laws often overlap with discrimination laws. That is common. Retaliation is often a base of discrimination in the workplace. The most common forms of retaliation The California Labor Code also highlights some of the most common types of illegal retaliation, such as: Stopping or decreasing employee wages Docking vacation or severance pay Terminating the employee These actions are sometimes legal. For example, employers can terminate at-will employees, even without reason. However, it is illegal to fire the employee for filing a complaint. Recent changes in the law In 2018, the penalties employers faced in retaliation claims increased. Employers may have to pay more restitution to the employee who filed the claim. Penalties also include fines up to $10,000. Many business owners cannot afford to pay the price of a retaliation claim. Reviewing the relevant laws can help business owners avoid acts of retaliation in the first place. It can also help them protect their business long-term.

Holidays – particularly the year-end Holidays, are supposed to be a time for relaxing and disconnecting. However, in the business world, that doesn’t always happen. Between the end-of-year demands and the stress of trying to accommodate employee holiday needs and wishes, it can be a lot for employers to manage. However, there are some basic steps every employer can take to minimize the disruption and conflict that can arise during this time of year. Revisit holiday pay and hour expectations Do you give your employees the New Year’s holidays off? Do you pay them for certain days, or offer extra pay for anyone who works on Christmas? Under California law, there is no requirement that businesses close or provide extra compensation to workers on either secular or non-secular holidays. However, many employers establish policies that provide such benefits to employees. Review your company’s policies and make sure you make your employees aware of the policies. Consider hiring and firing decisions carefully The need for workers can change drastically during the year-end holidays. Be cautious when it comes to hiring seasonal workers or terminating employees. Such decisions have financial and personal ramifications, and a business owner can face legal complaints if these processes are not in line with state or federal laws. Reinforce your technology policies As noted in this article, roughly 56 percent of Beverly Hills employees plan to shop online at least a few times a week during work hours. This is particularly true during the year-end Holidays. If you have strict policies on personal use of a work computer that prohibits employees from shopping online, make sure you remind your workers of this. And if you do allow some amount of such activities on the clock, discuss with employees what is reasonable and how to avoid exposing the company to security breaches when shopping online. Respect your employees’ rights During any State, Federal or religious holidays, be respectful your employees’ rights regarding discrimination and leave. This means addressing and preventing acts of harassment stemming from a person’s gender or religion as well as refraining from any retaliatory acts against people who take time off for medical or family reasons. Reviewing these policies with employees during this time of year can go a long way in preventing disputes that could otherwise arise.