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Trade secrets are typically among a company’s most important assets. This information is a solution, formula or technique that gives the business a competitive edge and sets it apart from others. And its value comes from the fact that it is not available to people outside the business. While people often assume the biggest threat to trade secrets is theft by other companies, statistics suggest that internal theft is to blame for about 80 percent of information theft. In other words, your employees could be a bigger threat to the security of trade secrets than anyone else. As such, business owners would be wise to take the following five basic steps to protect trade secrets from internal theft. Identify trade secrets as confidential: Carefully consider which information is a trade secret, and then clearly mark that information as protected. This might include a statement or symbol on digital documents or a physical flag on paperwork. Keep these documents separate from non-confidential information and carefully monitor access. Password protect sensitive information: Make sure the password requirements are strong and that only relevant employees have access. These standards should apply to both digital and physical records. Create a trade secret policy: This policy should outline which information is protected and what the consequences are if an employee or other party reveals trade secrets. Educate employees: Employees should be aware of what information is a trade secret as well as their obligation to protect it. They should also understand what can happen if they shared such information. When employees know what they are protecting and why they must protect it, it is easier to avoid inadvertent disclosures. Take cyber security seriously: Companies use email, social media and file sharing and hosting services daily, and it is crucial to ensure these channels are secure. Businesses will want to have strong cyber security measures in place to prevent hacking or accidental sharing of protected information. These measures can provide a basic level of protection and prevent unauthorized sharing or accessing of confidential information. Should any issues arise with protecting trade secrets or taking action against parties accused of stealing confidential information, business owners can discuss their options with an attorney.

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.

Discrimination in the workplace is a hot-button and sensitive topic for employers and employees. Even the appearance or suggestion of discrimination can trigger legal action. Whether there is ultimately a settlement or a court dismisses the case, lawsuits can be demanding and expensive for employers. As such, it is crucial to avoid discrimination, even when it seems subtle. For instance, using certain language or practices to discriminate against older employees without explicitly treating them differently because of their age can still be discrimination. This actually happened with elderly university professors. According to a report in the New York Times, the two elderly professors alleged that they were discriminated against because of their age, claiming claim that the discrimination consisted of specific language and actions intended to make the older teachers feel uncomfortable and encourage them to retire earlier than they wanted to. Among other allegations, the professors alleged they were: Called “dead wood” by the program director Passed over for positions and opportunities given to younger, less-qualified teachers Reassigned from their offices to small work spaces Required to share computers while younger workers had their own desktops Threatened with job reclassification and decreased salaries They filed a lawsuit against the school and prevailed. Not only did the school reinstate their jobs, it also made changes to its policies and discrimination investigation process. Further, it paid $765,000 in attorneys’ fees, back pay and retroactive benefits. While this case took place in another state, it should remind California employers of a couple points. First, discrimination does not need to be overt or direct to provide the basis for a legal claim. Second, the penalties of discriminating against workers can be far higher than people might expect. Therefore, it is best to avoid these actions in the first place. Employers can do this by drafting employment policies and handbooks with the help of an experienced employment attorney, properly training managers and taking discrimination complaints seriously.

While the vast majority of owners’ complaints involving construction work on their home or building can be classified as “cosmetic” in nature, other seemingly minor issues should be considered defective work which can be problematic. Not only can they be costly to repair, but they can lead to more serious issues such as window or pipe installations that could cause damaging water intrusion; electrical problems can cause excessive energy consumption and possible fire hazards; and in rare cases innocent looking cracking could be a sign of structural failure or foundational problems. Consequently, it’s important to know what to do to find a solution when these types of red flags are identified. Depending on what the terms of the contract provides for, a few possible ways to reach a resolution include: Talking it out – In some cases, resolving a defect could be as straightforward as itemizing potential issues and discussing them with your contractor. In fact, in California the owner must give the contractor the opportunity to resolve the issue as a prerequisite to taking legal action. Alternative dispute resolution – If giving the contractor notice and the opportunity to resolve fails, then the best thing to do next is find a reputable construction defect attorney, whose expertise in construction defect claims in California may be able to persuade a favorable resolution. If informal resolution efforts do not satisfactorily resolve the problem, then the attorney can work with a neutral third-party (such as a retired judge, and attorney specializing in construction law, or a construction expert) to mediate the dispute to help the parties reach an enforceable agreement. Going to court – If the other measures are unsuccessful, then it may be necessary to discharge your rights through filing a claim for either arbitration or in court. Both avenues of relief have their advantages and disadvantages, but some contracts require the parties to file for arbitration instead of going to court. In a future post, we’ll discuss the many California laws regulating the content of construction and home improvement contracts, including the items required to be contained in the contract and provisions that provide the most protection to you, whether you’re an owner of commercial or residential property, or a general contractor, subcontractor (specialty trades such as electricians, plumbers, framers, tilers, glass installers, etc.), or supplier.

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.

Employers have the right to make decisions on how they run their business, as long as those decisions comply with state and federal laws. For instance, an employer can decide whether to hire someone, when to let employees go and how to move them around to best meet the needs of the company. However, if any of these decisions violate the laws in place to protect workers, then an employer could face legal action. This could happen if someone accuses an employer of retaliation. What is retaliation? Retaliation is an adverse action or decision taken against an employee who engages in protected activities. These activities include reporting sexual harassment, requesting an accommodation, filing a workers’ compensation claim and refusing to engage in unlawful conduct. What does retaliation look like? Retaliation can take many forms. Examples of retaliation include: Firing an employee Changing a person’s work schedule in a way that will knowingly cause problems for the worker Transferring the worker to a less desirable location or position Denying a promotion or bonus Denying leave or time off Firing someone related to or married to the person Demoting the worker Creating a hostile work environment Giving an undeserved poor performance evaluation If an employer takes these or similar actions in response to a job applicant or employee’s participation in any protected activity, he or she can face legal action. Handling retaliation claims If an employee claims that an employer retaliated against him or her, it is important to take such claims seriously. Often, it is possible to show that an employment decision was based on something other than the participation in protected activity, though this typically requires careful recordkeeping and legal counsel. Employers in California can avoid such claims by understanding retaliation laws and discussing any concerns about employment decisions 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.

If you own a business, you’ve likely learned quite a few lessons about how to run your company. However, every phase of a business presents new challenges and new opportunities. This is true whether you are starting a brand-new business or expanding an existing one. While these events are highly complex and unique, there are some universal pitfalls that can threaten a business at just about any stage, so it is wise to avoid them. Don’t make hasty decisions. In the excitement of new business opportunities, it can seem tempting to act first and deal with consequences later. However, this could be a costly mistake, especially if you hire too many people, fail to negotiate a fair lease or offer discounts or deals that are ultimately unrealistic. Don’t forget about adding partners — carefully. Developing and protecting partnerships is a critical element of any business opportunity. You will likely need to discuss contracts and organizational changes, among other things. Take these discussions – and partnerships – seriously. Informal agreements or unclear terms could spell disaster for a growing business. Don’t minimize the importance of protection. As you open your business up to new parties and new opportunities, you also open it up to new threats. To protect yourself, your business and your workforce, you will want to be deliberate when forming your business, creating employee agreements and developing privacy policies. Starting and growing a business is an exciting venture, but the stakes of such pursuits can be quite high, especially with regard to the matters we discussed above. As such, you should not feel like you must navigate this process alone. You can work with an attorney who has the experience and knowledge of business-related legal matters you may not so that you can focus on running your business.

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.