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California business owners should be aware of a recent announcement by Gov. Jerry Brown. According to a law he signed last week, California will be the first state in the U.S. to require certain types of companies to have female representation on their boards of directors. Currently, the measure applies only to publicly traded companies headquartered in California. However, it sends a message to every current and prospective entrepreneur that the business environment in this state is changing. The reason behind the legislation Currently, gender equality in the workplace is a highly visible and divisive topic. Debates regarding equal pay and sexual harassment have dominated news cycles; female representation in traditionally male-dominated industries like politics and S.T.E.M. continue to lag, though there has been progress. These shifts and obstacles prompted legislators to propose and support the bill to require large companies in this state to have at least one female director on their boards. Supporters say that doing so is in the best interests of businesses and their customers. What does this mean for business owners? The actual impact of the legislation remains to be seen. However, it is possible that we will see appeals challenging the laws, as well as pushback from the one-quarter of California companies that will have to add at least one female to their boards. We could also see companies embracing the measure. Instead of fighting it, there could very well be corporations that see it as an opportunity to expand leadership opportunities to deserving – but discriminated against – candidates. Whether you agree with the legislation or not, it could very well affect your business. Even if your business is a small- or medium-sized entity, you may want to consider your own leadership structure and representation. Are you promoting diversity in your business? Are you giving every person equal opportunities for advancement? Are you considering all options for reducing harassment and discrimination in the workplace? This legislation could present legal challenges to business owners in terms of complying with state regulations and avoiding the appearance of discrimination. Should any issues or disputes regarding these matters arise, legal guidance could become necessary.

A business’s intellectual property is one of its most important aspects. Intellectual property (“IP”) is an original idea or product created by your business. In today’s information age, it can be easier than ever to find yourself entrenched in a legal battle over IP. That’s why it’s more important than ever to defend a new business idea as soon as it is created. It may seem like an unnecessary step, after all you don’t expect a new idea to be poached before you can act on it. Unfortunately, that’s exactly what can happen. Companies need to be aggressive in defending their intellectual property. This can include creating a comprehensive plan for copyrights, trademarks and licensing agreements. It’s easy now for someone to steal an idea or business plan. Information is readily accessible and careless internet habits or unprotected email passwords can expose company secrets. Risk can also come from an internal threat. Consequently, it’s important to be proactive with new intellectual property. These steps can help your business defend a new IP: Create a plan Understand what aspects of the new idea need to be protected. Is there a state or federal license you need to procure? Should you protect it as a trade secret? Does it have copyright protections? All of these require different approaches and different protections. You need to either research what protections are available for your specific circumstances, or retain a law firm with expertise in IP law. Anticipate duplicates It’s much easier to defend a protected piece of intellectual property than to take steps to defend after the fact. Even though IP laws can be confusing, it’s much better to take steps to defend a new idea before facing any issues. Create and enforce strong non-disclosure agreements A strong non-disclosure agreement doesn’t mean you don’t trust your employees. Instead, it’s a proactive step taken to protect a new idea. Employees change positions and jobs all the time, and they can take confidential information with them. Don’t let another company benefit from your hard work. These are just a few steps a company can take to protect new intellectual property. A forward-thinking approach is always better than having to react to attacks on business ideas. If you’re considering taking steps to protect your intellectual property, an aggressive business attorney can help determine the best course of action.

Employers across California go to great lengths in terms of both time and money to hire loyal, competent employees. However, it can be a challenge to retain employees, particularly when a competing entity offers attractive benefits to try to get a worker to come work for them. In some states, employers prevent this by having employees sign non-compete agreements that prohibit them from working for certain companies until a certain amount of time has passed after their employment ends. Except in a few, very limited, circumstances to be discussed in a separate blog, a non-compete agreement that prevent employees from future gainful employment are void in California. Importantly, however, this ban only applies to non-competes that are designed to remain effective after the termination of employment; a company may – legally and for very legitimate reasons – prohibit its employees from moonlighting during the term of their employment, particularly when the moonlighting it performed for a competitor. In one of many maneuvers to attempt to jump this hurdle, some companies have so-called “no-poach” agreements across franchises or companies that can serve as a similar means of preventing workers from leaving one company for a competitor. However, attorneys general in 10 states – including California – are taking issue with these no-poach agreements. According to reports, the AGs have targeted eight fast-food chain restaurants and requested that they provide information on their no-poach agreements. In this industry, an estimated 80 percent of franchisors have no-poach provisions in their franchising agreement. The agreements evidently prohibit one franchise in a chain from hiring an employee from another franchise in the chain. As the AGs argue, no-poach provisions unfairly restrict an employee’s rights; they also make it possible for franchisers to keep wages low and prevent competition. By doing this, they create obstacles for employees looking for better positions or benefits at another location. Further, the AGs note that many employees have no awareness of these agreements between franchisors, creating confusion and complications when an employee seeks out new employment. The franchisors have until next month to provide the requested information. If you are an employer with questions about no-poach agreements and other types of employment contracts, it can be wise to consult an attorney right away. It is not always easy to understand how the laws treat these types of agreements, and failure to have legal guidance can leave you exposed to lawsuits, loss of workers and other consequences.

You’ve noticed a change in sales lately but can’t find a reasonable explanation to account for the losses. You don’t want to believe that one of your employees has been stealing money out from under you, but your suspicions are growing. You believe that someone in accounting may be to blame. However, before you confront an employee, you’ll want to know for certain that you’re confronting the right person and can provide evidence to back up your claim. What are the signs that an employee has been embezzling money? How can you confirm your suspicions and take legal action against them? The red flags of an embezzlement scheme Employees who steal are often egotistical enough to believe that they’ll never get caught, but there are subtle giveaways that can help to reveal their true identity. Whether they’re a longtime or new employee, embezzlers are eager to learn the ropes of the company so that they can eventually manipulate and exploit the processes. They may also appear to be “living the good life” or otherwise living outside of their means. You see their paychecks, so how can they afford to buy a new car and brand name clothing even you can’t afford? Things simply aren’t adding up. Embezzlers have no hesitations about lying so it comes to no surprise that they may abuse other company policies. This can include sneaking out of work early without permission and abusing the number of sick days that they can take. Lastly, do they have a motive to steal? If you have an employee who has expressed discontent about the way they’ve been treated, they may have felt the need to seek revenge against your company. How to conduct your own embezzlement investigation If you’ve noticed the behaviors above, you may want to do some investigating. Gather your business’s financial statements and start reviewing accounting documents. You may find that some documents are missing, which should immediately raise a red flag. When analyzing the documents, do you notice any unexplained expenses and reimbursements? Are there unauthorized vendors on accounts? An embezzler may also receive a customer’s payment, but then pocket the money. If an employee is doing this, you may notice an unusual amount of past-due accounts. After you’ve gathered enough information, it’s time to create a game plan to address the problem with them face-to-face. But this isn’t always a task you should take up alone and you may want to get a second opinion before doing so. You have the right to protect your business through termination and subsequent litigation. A dishonest and disloyal employee should be ousted for their actions and held accountable under the full extent of the law. Empowering yourself with your options can help you to take back control of your company and close in on opportunities for financial exploitation.

California employers have a lot to think about when it comes to hiring workers: the type of employee, whether to pay them on and hourly basis or salary, the rate of pay, the types of standards they to enforce, and many more issues. Unfortunately, these decisions aren’t always strictly in an employer’s hands. Sometimes, they depend on much larger factors, like the available workforce and the economy. For instance, trucking companies are struggling with a driver shortage that has taken a considerable toll on hiring prospects. As noted in a recent article on the trucker shortage, companies may be making hiring concessions they might prefer to avoid. A complicated situation The transportation industry is facing numerous challenges, from a historically low unemployment rate to rising costs and steadily high demand. This means that trucking companies are as important as ever, yet there are tens of thousands of positions open that they cannot fill. Finding solutions To begin with, companies are increasing wages and offering bonuses they had not offered before. Many companies are also relaxing the qualifications they are looking for in drivers. As the article noted, some are willing to hire anyone, as long as he or she can secure a Commercial Driver’s License and meet basic physical requirements. Solutions that also create problems Whether these efforts are successful in attracting new drivers remains to be seen. However, it is important to note that changes to hiring strategies like this can have considerable impact on a business in the short- and long-term. For instance, such shifts could result in wage demands that a company cannot maintain, issues with managing untrained or unfit employees and possibly an increased occurrence of regulatory violations. In other words, even if hiring solutions accomplish one goal, they can lead to other issues if employers do not consider the legal and long-term impact of their decisions. As such, it is crucial for trucking companies, and all employers, to discuss hiring practices and strategies with an attorney who is familiar with the unique challenges California and Federal law pose.

Brand names are essential assets to any business. They identify, set apart and distinguish one product from another. And many companies strive to make their brand or product a household name. However, there is a point where popularity actually works against a company. This can happen in cases of genericide. What is genericide? Genericide occurs when a trademark becomes so diluted that the brand name becomes a generic term for all similar products. This occurred with aspirin, escalators and trampolines. At one point, these and other product names were private property, but now they are common words that no longer fall under the protection of a trademark. So what can companies do to avoid this? One way to protect a trademark is to educate consumers. Multiple companies have done this in an effort to keep their trademark and distinguish their products from generic terms; most recently is Velcro Companies. The company has launched two viral video campaigns urging consumers not to say “Velcro” unless they are referring to specific VELCRO® Brand products. Instead, they instruct people to use alternatives, like “hook & loop fasteners”. Companies can also be diligent in protecting use of trademarked names by enforcing ownership before misuse spreads widely. For instance, companies might send a cease and desist letter to a company that is selling similar products online under a protected name without permission. When people refer to other products by a brand name, the integrity and identity of the brand name can be compromised and the company can lose the protection of a trademark. This can be devastating for a company’s portfolio and future. To avoid any situation in which another company is unlawfully using protected names or materials, business owners can discuss the legal remedies and options with an attorney.

The whole point of taking the time to carefully prepare business contracts prior to signing them is to mitigate the risk of litigation, which can not only hurt a company’s bottom line and reputation, it usually takes months or even years to resolve. As such, business owners will often turn to their legal counsel to help guide them toward contract features that can help reduce the risk of litigation and help facilitate resolutions. One such tool business owners can use to avoid litigation connected to contract and business disputes is a dispute resolution clause — also referred to as an arbitration clause. If negotiated effectively and customized to the contract and parties involved, a dispute resolution clause could become one of your company’s most value assets. What should a dispute resolution clause contain? While it’s always best to tailor a dispute resolution clause to the needs of the parties involved, the most effective dispute resolution clauses will contain carefully worded directions that outline the process by which issues and disputes must be raised to the parties of the contract, which type of alternative dispute resolution method will be used, and any expectations for each party — such as how each party is to behave or how timely matters should be resolved. Is it better to specify arbitration or mediation? The decision of whether to use mediation rather than arbitration is an incredibly difficult question to answer because no business’s situation is ever the same as the next, meaning the decision to include one over the other in a dispute resolution clause depends on what makes the most sense for your business and its bottom line. Naturally, there are as many benefits to arbitration as there are with mediation and certain drawbacks with either method as well that must be carefully considered. Are dispute resolution clauses allowed in California? Thanks to the outcome of Grafton Partners v. Superior Court, 36 Cal. 4th 944 (2005), dispute resolution clauses are possible in California contracts and can go a long way to avoiding lengthy litigation and potentially costly pro-plaintiff verdicts that are common with jury-trial verdicts. However, as with any contract, it’s best to discuss the pros and cons of including a dispute resolution clause with experienced counsel as they often have a better idea of which dispute resolution method works best in specific situations and can help you make more informed decisions in regards to your business.

When a business dispute arises, owners typically want to resolve it quickly, and they don’t want to spend too much money to do so. This can seem impossible to do if your case goes to court, and indeed litigation can be the most time-consuming and expensive way to resolve a dispute. Because of this, many business owners prefer alternatives to litigation. In California, there are numerous alternatives that can be worth considering. Mediation and arbitration are two of the most common forms of alternative dispute resolution, or ADR. While they both allow parties to keep cases out of court, they are distinctly different methods. Mediation Rather than putting their faith in the decision of a judge, jury or arbitrator, mediation is an informal process in which the parties retain control of their own destiny by attempting to reach a mutual resolution with the assistance of a retired judge or attorney specializing in the area of law involved in the dispute. While the mediator aids with communication and unbiased case evaluation, the parties will ultimately reach an agreement (or not) themselves. Mediation may not be a realistic option for highly contentious or complex cases, or cases in which one party feels so strongly about their case that they are unwilling to compromise in any manner. Arbitration Arbitration also involves a neutral third party – an arbitrator – but here the arbitrator acts as a judge and conducts the hearing similar to a judge in court. The arbitrator makes a final decision (without the use of a jury) whose decision is usually final absent vert limited exceptions. While it is quite similar to a court trial, theoretically it moves the case toward resolution much more quickly and is typically more accommodating to everyone’s schedule. On the flipside, arbitrations can be very expensive and usually preclude an appeal process. These and other forms of ADR, which include settlement conferences and neutral evaluation, give disputing parties the opportunity to settle an issue more quickly. Other benefits to ADR include preservation of relationships and confidentiality, which can be important priorities for business owners. It is important to note that sometimes litigation is unavoidable or necessary. As such, it is important to discuss ADR options as well as the possibility of litigation with an attorney experienced in all areas. With legal counsel, you can pursue the desired outcome and avoid any costly or unnecessary missteps.

It takes years to build brand recognition and unique creations from scratch. In the age of the Internet, someone can steal logos, slogans, trade secrets, processes, designs and other forms of intellectual property in an instant. Once intellectual property (IP) is stolen, it can be difficult to contain. An attorney can help you understand and protect your rights after a former employee or competitor has stolen your information. However, businesses can take measures to protect their work proactively. 1. Understand and communicate First, you will need to evaluate the IP that is important to your company. Do you have an essential customer list or unbeatable process? Determine all the information that you want to protect, and communicate that with employees. CEOs, marketing employees, HR workers and possibly all employees should understand that this information must not be shared. 2. Keep it confidential Keep your important information out of the public eye by limiting access. For example, put your manufacturing process in a computer folder with limited user access. Sensitive information should be on a need-to-know basis. You can also make confidentiality contracts mandatory for new and even existing employees. Employees can sign nondisclosure agreements to keep essential industry information safe. 3. Consider your need for trademarks, copyrights and patents You may want to seek legal protections for your work. Registering a trademark can be beneficial to protect intellectual property such as your company name and logo. If your business created an original product, such as software, then you may want to seek patent protection. Copyright protection is helpful for original creations including designs, written content and creative work. If you currently do business in foreign countries, or plan to do so in the future, it is especially important to consider proactive safety measures. Businesses in some countries are notorious for stealing IP. Keep your valuable business information safe by taking these steps and keeping IP protection top of mind.

Today’s workplace culture looks very different than a generation – or even a decade – ago. More specifically, recent movements like the #MeToo movement have put a spotlight on illegal sexual harassment and misconduct, causing many companies to reevaluate their approach to such complaints. Nike is the latest company to respond to allegations of widespread misconduct in the workplace, as well as complaints that leadership in the massive corporation failed to take the situation seriously. Recently, the company’s CEO made a public apology to employees in an all-staff meeting. Responding to similar situations Most companies are smaller than Nike, and they don’t have the same level of international brand recognition that the company has. As such, it may not be necessary or wise to respond to similar situations in a similar manner. The way company leaders respond to similar situations will depend largely on the business itself and the allegations involved. In some cases, it may make sense to release a public statement about a situation and take aggressive steps to make changes. In other cases, dealing directly with employees and managers to enforce existing rules could be just as (or more) effective. Resetting expectations in the workplace No matter how a company ultimately responds to this type of situation, it can be vital to reassess and reset expectations in the workplace in light of harassment allegations. Review harassment policies and consider making changes that reinforce the message that such conduct is not appropriate. For example, employers should make its employees fully aware that statements, no matter how innocent (or even jokingly) that relate to race, religion, sex or sexual orientation are inherently suspect, much less any physical touching or invading a colleague’s personal space, all of which are prohibited in the workplace. Employers must create (or strengthen) procedures that ensure employees can file complaints, as well as specific methods for investigating and responding to each complaint. Employers have a responsibility to protect workers from harassment and other type of misconduct in the workplace. Those who fail to do this can face serious legal penalties and public backlash. To protect your company and your employees, you can discuss any issues related to harassment in the workplace with an experienced attorney. With legal guidance, you can be confident that you have proper channels in place to respond to – and hopefully avoid – situations involving widespread workplace harassment.

One of the most common examples of intellectual property that business owners should to protect it is a name – its business name, product name or, in limited circumstances, the name of a person. Trademarking a name can be more complicated than people expect, especially when disputes arise. Dr. Dre vs. Dr. Drai A few years ago, a Pennsylvania doctor filed an application to trademark the name he uses marketing and branding his medical services: Dr. Drai. His application was challenged by California iconic rap artist and businessman, Dr. Dre. Dr. Dre filed the challenge on the basis that trademarking the name would create confusion between the two parties and lead people to believe there was a connection between the medical doctor and the music mogul. Recently, though, the court dismissed Dr. Dre’s complaint saying that there was not enough evidence to demonstrate that people would be confused or misled about the different good and services. Trademarking a name Trademarking a name is an important way to protect your image, brand and reputation, by registering it and preventing others from usurping it. The first prong can be challenging if a name is not distinctive or if it is not being used for purposes of commerce. In the case of Dr. Dre, the outcome may have been different if the medical doctor did not have immediate plans to use the name for business purposes. With all this in mind, business owners would be wise to discuss with an attorney the process of securing a trademark. This includes determining if the name is already protected, creating a valid application and responding to any challenges that may arise.

One of the most common types of disputes that arise between employers and employees is a dispute involving wages. Whether an alleged violation is the result of an oversight or deliberate actions, it can have serious consequences for the employer – it’s the newest craze by plaintiff’s lawyers. Recently, for instance, Frito-Lay Inc. resolved a wage violation dispute with 254 truck drivers. The company agreed to pay $6.5 million for failure to pay for meal and rest breaks, which are two of the most common areas of an employer’s exposure. Multiple violations In Frito-Lay, the truckers accused their employer of several wage and hour violations, alleging that the company did not keep accurate wage or hour records for the drivers and did not pay the drivers for all the hours they worked. This included paying them during meal and rest breaks, which is required under state law. Meal and rest breaks Compensation for meal and rest breaks has been a divisive issue in California and fertile ground for a lawsuit. Specifically with respect to the trucking industry, employees have been targeting their employers for failing to comply with the California requirement to provide drivers with paid meal breaks every five hours when they are driving and one 10-minute result period for every four hours. Avoiding similar situations Considering that the damages, fines and penalties for wage and hour violations can be prohibitively expensive, it is typically best to avoid such a claim in the first place by working with an attorney to review your compensation policies and ensure they are in line with state and federal laws. If you find yourself on the wrong end of a wage and hour complaint, contact an employment attorney immediately to protect your rights and minimize your exposure.