Blog

Many challenges can crop up when working on a construction project. Among these challenges, errors are the last thing that contractors or project owners want to face. Yet, they are not uncommon as you navigate the process. Design errors or mistakes are one such issue that can result in seriou s construction disputes and delays. It is important to determine who is liable when it comes to defects and design errors. SO, WHO IS RESPONSIBLE FOR DESIGN ERRORS? Many might assume the architect – or the person who created the project design – is responsible for design errors. That is not necessarily true. Architects might indeed be responsible for an error or omission in certain cases. However, liability may also fall to: The project owner The contractor or subcontractors Engineers or other third parties involved Responsibility might span across more than one party as well. Determining the origin of the error will help determine liability. The project owner is often the one funding the project overall, but who pays to fix the error will depend on the details of the project. Regardless, generally the contractor must highlight the changes required to repair the error in a change order request. BUT YOU MUST CONSIDER THE FACTORS OF THE SITUATION As it is with the majority of construction issues, the answer to who is responsible often depends on various factors, including, but not limited to: The details of the contract The process of the project The source of the error The terms of liability are different for all of the parties involved in a project – and they often change depending on the details of the project as well. In these cases, it is often critical to seek legal guidance before moving forward to mitigate the impact on the project and avoid an escalating dispute.

Construction projects are subject to many internal and external factors. Due to this, delays are not an uncommon occurrence. Whether delays are the result of bad weather conditions or supply chain issues, contractors and their clients cannot control every aspect of the project. Delay issues are very common construction disputes. Therefore, new and experienced contractors alike need to know when their clients may have a reason for a delay claim. 2 PARTICULAR TYPES OF DELAYS THAT POSE A RISK Common obstacles that contractors faced during the height of the COVID-19 global pandemic involved supply chain issues. The lack of materials put various projects on hold across California and the country. This widespread issue was out of contractors’ and clients’ control, meaning they were excusable delays. However, there are situations when clients may have a claim, including if the reasons for delays are: Inexcusable: As mentioned above, one example of an excusable delay is the disruption in supply chains. Force majeure clauses in contracts also cover many excusable delays – and protect the contractor. However, a customer may have a delay claim for inexcusable delays. If the contractor’s or company’s actions extend the project, it could be an inexcusable delay. For example, if contractors are negligent or fail to follow proper permitting procedures, then a customer may have a legal claim to collect damages. Foreseeable: If the customer argues that a delay was the result of a foreseeable issue, they might also have grounds for a claim. These situations can be rather subjective – and complex. Yet, issues about foreseeability play a large role in many construction disputes. Delay claims might be common in the construction industry, but a customer’s claim must meet specific conditions to be successful. Contractors should seek knowledgeable legal guidance as soon as possible if facing claims. That way they can protect their bottom line and business reputation. This also highlights how critical it is for contractors to take extra care in crafting contracts before the project begins. An attorney can also provide counsel on how to establish a protective and effective contract.

Nearly every day, a new article on artificial intelligence (AI) seems to pop-up, particularly in the context of its use in various business settings. Many California employers may already use AI, while others are looking to implement it in their operations. It is important to stay up to date with current trends in the business world and the employment arena. CONSIDER THE EEOC’S WARNINGS If you utilize AI in the workplace, you must ensure that it complies with federal employment laws, per warnings from the Equal Employment Opportunity Commission (EEOC). This is essential when considering how you use AI and how it affects workers. 3 MATTERS TO KEEP IN MIND Many see AI as an efficient tool, but it is not without risks. There are three particular issues that employers must keep top of mind in relation to AI implementation, including: Discrimination laws: AI is not necessarily less biased than humans. There are various cases of AI discriminating against potential employees when used in employment decisions. Other cases involve discrimination in wage and hour matters. If you choose to use AI in these matters, you may still wish to include a human element to review the processes and avoid the risk of legal issues arising from AI usage. Privacy laws: It is important to ensure that any AI implementation does not violate workers’ rights to privacy. AI applications that monitor employees’ work, for example may pose an illegal invasion of privacy. Employee perception: According to the Pew Research Center, employees are concerned about how the use of AI may affect both their position and privacy. Consequently, employers should be mindful about how to introduce AI to their company. While staying on top of the trends is often essential to keep up with the competition, employers must also understand the risks involved and make sure they have a plan to manage them.

Whether you are opening the doors of your first small business, or you are growing your business, hiring employees is a critical step. Approaching this process can be overwhelming, especially while balancing other aspects of your business. A CHALLENGING FIRST STEP Employment plays a key role in your business, yet it is often the area that involves the biggest risk of legal disputes and issues. For many small business owners, it might be their first experience with employment laws, so there are a few things that small business owners must keep in mind as they begin the hiring process. According to CNBC, many small businesses in California and across the nation are facing challenges on the hiring front. There are various reasons for this, but this struggle is leaving many small business owners desperate for quality employees. Even if you feel this stress, it is important to approach the hiring process with great care – especially if it is the first time you engage in hiring. TWO MOST IMPORTANT FACTORS TO KNOW As you begin the hiring process, you must: Know all the rules: As we have discussed in previous blog posts, there is a long list of laws and regulations that you must adhere to when hiring, such as the Americans with Disabilities Act (ADA) and the more recent Create a Respectful and Open World for Natural Hair (CROWN) Act. The Equal Employment Opportunity Commission (EEOC) provides extensive information on the important hiring rules to understand – and practices to avoid. Understanding these rules is not just important for large corporations; small businesses must also know the regulations of hiring practices. Consider consulting an attorney: It is often beneficial to seek guidance from a lawyer when you first open or expand your business, including when you begin to plan for the hiring process. Working with someone to fully understand the legal aspects of hiring can help avoid issues that could potentially develop into legal claims or disputes. Taking these two steps may seem simple. However, it can help small business owners start hiring and growing their businesses with confidence. It can also guide them to actively prepare and avoid the risk of litigation.

It is important to be selective when choosing a business partner. You want a partner who is diligent, reliable and honest with a good business sense. However, even if your business partner is your closest friend, family member or spouse, you could run into challenges as you operate and grow your small business. If you face a partnership dispute, you do not want to put your business (or your interest in it) at risk. DETERMINE: WHAT IS THE REASON FOR THE DISPUTE? It is axiomatic that the key to finding an effective solution is to discover the core reason for the dispute. It is important to consider that if you have a personal relationship with your business partner in addition to your professional relationship, the reason may not even be business-related. For example, if you run a business with your spouse, it is not uncommon for marital issues to influence disputes over business operations. Personal matters can have a surprisingly large effect on the success of business partnerships. In fact, a majority of the common reasons partnerships fail stem from personal matters. After all, personal matters can affect the trust in your relationship, and it is critical to trust your partner. However, it is possible that the reason behind the dispute has both professional and personal connotations to it as well. It is common for business partners to have conflicts if: They have different values They have different visions of the business’s future Their personalities clash too much RESOLVE: TAILOR TO THE IDENTIFIED REASON Once you discover the true reason behind the dispute you face, you can move forward with a resolution strategy that targets this issue and troubleshoots future issues. You may wish to keep this an internal matter. Even so, it is often still important to obtain dispute resolution services or consult a California business attorney to protect your business interests while you navigate the dispute. While litigation is the last thing business owners often want to add to their plate, it might be necessary in some cases, and the sooner you seek assistance the better the chances for a positive result. Otherwise, you may need to resort to litigation if this particular issue: Cannot be resolved internally Involves financial damages to your business, such as fraud, embezzlement or other self-dealing Involves a breach of the partnership agreement Due to the nuances of personal and professional relationships, partnership disputes can be difficult to manage, particularly if there in not a partnership agreement in place. Guidance from a business attorney may be helpful in clarifying differences and finding solutions from business, personal and legal perspectives.

Concerns about inflation are leading to financial stress for nearly everyone across the country – including small business owners. It can already be difficult to strike a balance between running a business and efficiently managing finances, and the current circumstances are weighing heavily on business owners. Financial stress can escalate quickly. This is especially true considering that claims of unpaid wages are some of the most common lawsuits small business owners face. So, what must small business owners consider in these cases? THREE ASPECTS OF WAGE CLAIMS TO UNDERSTAND As a small business owner, because payroll should be a top priority, it is important to be aware of how to handle employee claims. Make sure employees report to you: It is likely that your employees will speak to you first if they encounter a wage issue. However, you can help to ensure this by establishing a clear complaint process in your company policies or employee handbook. That way, you remain aware of any issues within your business – and can resolve them quickly. Then, you should also have a plan in place for how you will handle any complaints. Know the process: It is also important to understand the process your employees might engage in if they file a claim or lawsuit to recover unpaid wages. This knowledge allows you to prepare and protect yourself before a claim is filed. Know the law: You should also take time to understand federal and state wage laws as you first establish your business, and be aware of California’s penalties for unpaid wages and employees’ waiting time. Speak to an attorney: The moment you are notified of a claim or lawsuit, you should contact your attorney, or an employment attorney to counsel you on your next move. The more you delay, the harder it will be to defend your position. As we have stated in previous blog posts, being proactive is highly beneficial. Even if you do not face a wage dispute, you can take steps now to prevent issues in the future. YOU MAY HAVE TO REEVALUATE FINANCES If you face financial stress, it might be necessary to reevaluate your business operations and expenses – at least temporarily – to manage current wage issues or avoid future ones. Current events may create challenges for small business owners, but being prepared and actively addressing these concerns can help you effectively handle disputes and litigation that may arise.

Like any creative business, architects rely on their intellectual property. Their designs are at the center of their work. For example, as we discussed in a previous post, many architects nowadays focus on creating new ways for their building designs to be environmentally friendly and sustainable. However, nearly every form of intellectual property faces the risk of theft or infringement in the business world. Architects face unique challenges with their copyrights – as well as risks. COPYRIGHT ISSUES IN THE ARCHITECTURE WORLD One of the biggest issues, of course, is that there are many aspects of building designs that architects cannot protect by copyright. This is simply because various details are fundamental in the construction of every building. One person cannot own the rights to such a common design. Even so, there are several elements of a design architects can copyright. These include: Drawings Site plans Certain elements of designs, such as a new sustainable design Additionally, architects own their original designs. However, ownership often comes into question. Owners of the building – or the party who commissioned the building – may believe they have ownership rights. Architects must ensure they proactively address ownership in their initial agreements to avoid disputes as well as the risk of infringement. Yet, another issue remains. Many architectural designs are easily accessible to the public through online public records. What about other parties who may access records and attempt to use copyrighted material? CALIFORNIA LAW AIMS TO IMPROVE COPYRIGHT PROTECTIONS Regarding access to designs, a new law could change the game for California architects. The state lawmakers passed a bill that will restrict the public’s ability to access copyrighted architectural drawings beginning January 2023. This new law will hopefully help to increase protections for the innovative designs that architects work so hard to create – and essentially depend on to establish business. We may not see the impacts of this law until next year. In the meantime, and even when this law takes effect, architectural firms should still ensure they take critical steps now to monitor and secure their intellectual property rights.

Businesses must be open to change. It is essential to survive in the business world, regardless of the industry. This goes hand-in-hand with the necessity to change along with consumer needs and values as well. With the increasing emphasis on sustainability across industries, many businesses have had to make their processes and products more environmentally friendly. However, in terms of real estate construction, there are some challenges. SUSTAINABILITY IN NEW CONSTRUCTION IS NOW A MATTER OF LAW – NOT JUST A PREFERENCE The push to become greener comes from many fronts. Property owners, potential buyers and even lawmakers all expect the real estate industry to go greener. For example, homeowners and businesses often want their properties to meet their personal values of sustainability. Indeed, the emphasis on going green is nothing new for the real estate construction industry. In fact, the American Institute of Architects highlights sustainability as a focus – and responsibility – for architects. Additionally, California design and real estate firms must comply with CALGreen rules for new construction. Lawmakers made this change in the building code in 2019. MAINTAINING SUSTAINABILITY COMES WITH NEW CHALLENGES EVERY DAY Ecological matters affect almost all levels of real estate development. For example, it impacts: The sourcing of materials How companies obtain materials with continued supply chain issues Design and building innovations The changing market In turn, this affects the success of development projects, which can also disrupt the overall success of the business. Another challenge is the urgency behind these efforts. Concerns about the climate are only increasing. Consumers expect businesses to share those concerns and reflect them in their practices as well. However, business owners can face serious legal risks if they make promises or advertise green efforts without adhering to those claims.

Over the past two years, many California businesses transitioned to full-time remote work. It has become the norm for many employers and employees across the country, as well as a convenient option. However, remote work comes with its own risks. Employers faced new concerns regarding cybersecurity and intellectual property protection. Now, many are facing employee disputes as well. BUSINESS OWNERS SHOULD BE AWARE OF THIS TREND IN LAWSUITS According to The Los Angeles Times, the number of lawsuits businesses face from remote workers is increasing. The reason for this wave of lawsuits? The costs related to working from home. These lawsuits list a wide range of costs employees want their employers to cover, including: Home office and technology costs Increasing internet bills due to working from home Increasing utility costs due to working from home Lost revenue from being unable to rent out home office space The sheer number of these lawsuits means that business owners should take note – and be prepared. WHAT DOES THE LAW SAY? California law require employers to reimburse their remote employees for certain work-related costs, such as: Internet costs Phone bills Employer-directed expenses An employee’s claim for cost reimbursement must be reasonable and related to the business’s needs or the employee’s work at home. HOW CAN YOU HANDLE THIS SITUATION? There are a few steps you can take in the face of this rising risk of this type of lawsuit. You should: Carefully compare and contrast in-office practices to remote work practices Review policies, employee benefits and the employee handbook Proactively classify what business expenses you will cover Document everything, from communications to expenses

Competition plays a significant role in the success of your business. It also promotes innovation, imagination and creativity which you may ultimately transform into protectable intellectual property rights. Your advances, however, may invite competitors to infringe on your intellectual property rights. In today’s digital age, it is especially easy for business owners to launch their designs and get them in front of consumers. It is also easier than ever for competitors to copy those designs. Copycats are an increasing risk businesses face. So, what should California business owners do if a competitor copies their design, for example? BEFORE: PROACTIVE STEPS FOR PROTECTION As a threshold matter, it is critical for business owners to take steps to protect their designs long before they face the risk of a competitor copying their design. When first creating a design, you should: Understand the rules: Learn what designs the law protects, as well as how these protections work in the event of an infringement. Protect your intellectual property: Take the steps to establish and secure the ownership rights and protections of your intellectual property. Properly register your work with the U.S. Copyright Office and obtain a trademark for your logo or brand design. Make a plan: This step is twofold. Create policies and establish security measures that protect your intellectual property. Additionally, consider your strategy for how you will handle the situation if a competitor does copy your design. AFTER: STEPS TO TAKE IF THE DESIGN WAS COPIED If a competitor has copied your design, then immediately: Consult legal counsel: It is important to ensure you understand your rights as well as your options for moving forward to protect your intellectual property. Seeking professional counsel can help you manage this issue while still focusing on your business. Send a cease and desist letter: This is an essential step. It gives your competitor legal notice that they are infringing on your rights. These letters require careful, precise language. That is one of the reasons why it is important to consult counsel before sending a cease and desist letter to the infringing competitor. Take legal action: If you send a cease and desist letter and the competitor continues to use the copied design, then you can file a lawsuit to secure your rights and recover the damages your business may have suffered. Be proactive! You own the design that is unique to your business. It is what possibly gives you the edge in the business world, so take steps to protect it.

Taking time to update a commercial property is often a critical step to attract appeal from potential tenants, increase the value of the property, and comply with building codes and market trends, but perhaps most importantly to avoid potential liability from harm to people or the property. UPDATES ARE INEVITABLE Some updates are cosmetic to meet market demands. In other cases, parts of the property might be out of date or noncompliant with the California Building Standards Code or federal laws, such as the Americans with Disabilities Act (ADA). Older buildings in particular often require significant updates to be safe and functional. The most common types of property updates generally include: New lighting or electrical Adding or removing interior walls Updating the HVAC system Replacing the roof New plumbing Updating a property may not involve renovating the structure of the building, but it could affect it. Issues – or even damages – could result from improper updates to the property, such as water damage from faulty plumbing. WHO TAKES RESPONSIBILITY? Whoever takes responsibility for property updates usually depends on two factors: The specific issue or root cause of the damage The terms of the lease Workmanship of contractors Property owners carry the general responsibility for repairs and updates unless the renting business owner caused the damage. However, if the tenant causes damage to the building, the owner may try to hold them responsible for the cost of repairs. Finally, in the case of a situation where repairs were made but fail, the contractors could be held responsible for both faulty workmanship and the damages resulting from their work. Ultimately, these can become big, complicated disputes with everyone pointing fingers at one another, so all three entities should arm themselves with photos, documentation and an attorney who specializes in leaseholds and construction.

It is not uncommon to hear about class-action lawsuits against big companies in the news. The video-sharing platform TikTok is just one of the latest businesses facing an onslaught of headlines regarding a class action. While many might believe that the larger the business, the greater the risk of litigation, class-actions could pose a risk to businesses of all sizes. MYTH: ONLY BIG BUSINESSES COULD FACE CLASS-ACTION LAWSUITS Bigger companies could very well face a larger risk of class-action lawsuits simply because they have a greater range of interaction with customers and employees. However, the increasing digitization of the business world is quickly undermining that. Businesses of all sizes take advantage of social media and online platforms to grow their business and gain exposure. In turn, this could increase their exposure to risk. Additionally, a class-action lawsuit does not require several plaintiffs – such as the cases that reach national news headlines often do. It only takes one or more individuals to file a claim in representation of a larger group who suffered similar damages. Therefore, even small businesses could face the risk of class-action lawsuits. WHAT IS THE BIGGEST RISK SMALL BUSINESSES FACE? It is most common for businesses to face class-action lawsuits from: Employees or former employees Consumers Other businesses, namely vendors or suppliers Class-action lawsuits brought by employees are likely the most common risks for smaller businesses. For example, payroll mistakes or claims of discrimination could affect several employees, leading to widespread complaints and legal action. These issues may not necessarily result in a class-action lawsuit, but it does include the general factors that make up such a lawsuit. WHAT SHOULD BUSINESSES DO? These lawsuits require business owners to strike a delicate balance between: Addressing the dispute effectively Managing public relations Protecting the product, service and the business This requires a proactive, aggressive but intelligent approach. Facing complicated lawsuits might be common in the business world, but that is precisely why smaller businesses must take creative steps to secure the future of their business and avoid the threats these lawsuits could pose.