Blog

Creating and enforcing effective company policies is a key responsibility of any employer. After all, they are the rules that inform the operation and conduct of the business and its employees. It can be a challenge to make new policies and adjust its rules, but change is inevitable, so evolving your business solutions to such change is critical for the continuing success of the business. The circumstances of the last couple Covid years have forced many employers to rethink and create new policies, with the increasing trend of remote work, the emphasis on safety and health in the workplace and responses to changes in state and federal laws. Some employers may have to adjust their policies due to recent disputes or lawsuits they faced as well. Regardless of the reason for creating new policies – or changing current ones – there are a few key issues that employers must consider. WHAT SHOULD EMPLOYERS CONSIDER WHEN DEVELOPING POLICIES? Policy change/creation requires a strategic approach. During that process, employers should: Consider the necessity: Many circumstances demand a new policy – especially legal precedents or changes. Even so, employers should still carefully evaluate how a new policy will help. Too many policies or stringent policies can be counterproductive. Scrutinize every step: Employers must analyze the policy’s goals and potential effects. They should evaluate the language of the policy, as well as their plan for implementing it. Obtaining several perspectives on the policy can be beneficial. It could also be helpful to have a knowledgeable business attorney review the policy as well. Make sure it is legal: Unfair policies are a common reason why employers face lawsuits. This is clear with the passing of the CROWN Act, which bans hair discrimination in dress codes and company policies. Therefore, employers must also take care to review California and federal laws to confirm that all new policies comply with the law. Establishing new policies also requires employers to implement them effectively. Employers must also make sure they create the proper communications and training to enforce the new policy effectively. REMEMBER: REGULAR POLICY REVIEWS ARE ESSENTIAL In addition to making new policies, employers must review their policies regularly to ensure they are still legal and effective.

Compliance is an essential part of any employer’s job. It is their responsibility to ensure they adhere to all labor laws and practices. And one practice that employers cannot overlook is timekeeping. Proper timekeeping is critical to avoid the common wage and hour lawsuits that employees bring against employers. However, it has become even more significant under a new ruling. CALIFORNIA SUPREME COURT: NO ROUNDING MEAL PERIODS This case – Donohue v. AMN Services, LLC – is one of the most significant employment rulings so far in 2021. In this case, the California Supreme Court determined that employers cannot round their employees’ meal breaks. California law is very specific regarding meal periods. It states that employers must offer a 30-minute meal period after five hours of working. However, it is common for employers to use automated systems for time-keeping that often round to the nearest quarter-hour or even ten-minute period. Yet the Court ruled that this automation is a violation of employees’ rights. There is no doubt that this ruling will have a considerable impact on employers throughout the state. These types of violations can leave employers facing serious penalties, so they must strategize to reduce the risk they face. EMPLOYERS HAVE TO ENSURE ACCURACY Employers know they must pay close attention to detail to make sure they are in compliance with the many laws that govern the workplace. And this ruling means that an employer’s focus on detail is more important than ever. In light of this case, employers should make sure they: Examine their employees’ time records closely Evaluate their practices for recording work time and meal periods Adjust their policies and employee trainings as necessary Minor discrepancies could lead to a number of legal issues for employers. So, all employers must take care to ensure their timekeeping systems and policies are accurate.

According to California law – and under the terms of the Right to Repair Act – builders have the option to manage and fix alleged defects before property owners can file a legal claim or take matters to court. Regardless of how builders approach these claims, there are a few steps that they must take to protect their business. BUILDERS MUST OBTAIN AN INSPECTION OF THE DEFECT This is the first – and often most important – step that builders should take in these situations. Property owners must generally allow builders to examine and document the alleged defect. The primary reasons this step is so critical is it can help builders: Determine the cause of the alleged defect Assess who could potentially be liable, if anyone Compare findings with their existing project records Finding the answers in these situations is essential. After all, latent defects can develop, but an inspection of the property owner’s claim could reveal that builders are not liable for the damage at all. Therefore, builders should make sure they document the damage detailed in the claim and take pictures to add to their records. It is important to note that it is often helpful if builders have an attorney and professional inspector present as well. They can help builders with documentation, as well as limit direct contact between the property owner and builder. WHY IS THIS IMPORTANT? In previous blog posts, we discussed the important role that expert witnesses play in construction defect cases. Certified inspectors fall into this category. Property owners will likely have an inspection of their own done. While the findings of inspections are not definitive, they can carry a lot of weight in a construction defect case. That is why builders should obtain their own inspection. Then they can properly defend themselves – and their reputations – against these claims. It is also critical to consult experienced legal counsel in these matters, but evaluating the evidence and validity of the claim is fundamental to build a defense.

Reputation is critical in the business world, and this essentially has two components. One is the reputation it has with consumers, and the other is the reputation with past, present and potential employees. Many business owners tend to focus on building the reputation they have with consumers, but do not tend to prioritize their reputation as an employer. WHY IS EMPLOYER BRANDING SO CRUCIAL? Employer branding has become an increasingly important tool in recruiting and retaining employees. There are many reasons it is important to maintain a positive employer brand, but there are two in particular that you must note: It is a preventative measure: On one hand, cultivating a positive employer brand with words and actions can help mitigate significant issues with employees. For example, a positive brand and culture can encourage employees to seek resolutions internally and prevent issues from escalating into legal claims. It is also a risk factor: On the other hand, your brand as an employer is yet another thing you must address and strategically protect if you face legal issues – particularly if you face employment litigation. Accusations from employees could put the employer brand, as well as the consumer brand, in jeopardy. Employment disputes are not always avoidable. However, employers must approach them with the utmost care so they can manage legal risks while securing all the components of their brand for the future. CONDUCT A BRANDING AUDIT Many sources, including the Harvard Business Review, agree that it is critical for employers to conduct a brand audit. This can help employers scrutinize their brand’s current standing and determine how they can improve their brand. A thorough audit generally requires employers to: Monitor their reputation online and externally Review all internal documents, including applications and job descriptions Organize surveys with current employees to gauge their perspectives Regularly evaluating the brand can help demonstrate employers’ commitment to their business and employees, and protect their business in the long run.

Regardless of the company’s size, business partners frequently believe that a 50/50 partnership is the fairest and most effective arrangement. That way, they both maintain equal power and say over the direction of this shared dream and effort. Even so, every 50/50 partnership carries the risk of deadlock. Most business owners are familiar with this issue, when two business partners cannot agree on a decision and, in turn, cannot move forward. This can have a considerable impact on the business as a whole, especially if these decisions are strategic or financial. So, how should business owners approach a deadlock? ALWAYS REFER TO THE PARTNERSHIP AGREEMENT IN DEADLOCK As we have discussed in previous blog posts, it is often in California business partners’ best interests to establish a partnership agreement. Having written agreements partners can refer to is critical, and typically address: Dispute-resolution strategies Process in the case of deadlock Therefore, the importance of potential partners to have an attorney draft a fair, and complete partnership agreement cannot be over-emphasized. Similarly, partners should always consult the partnership agreement to determine how to move forward in the event of an impasse. COMMIT TO NEGOTIATING – AT LEAST IN THE BEGINNING By the time business partners reach a true deadlock, they have often attempted to negotiate. Even so, business partners should still attempt to negotiate a solution again before turning to litigation. It is often helpful to negotiate in a formal setting with an experienced business attorney or another neutral third party. Most business partners do not want to put their shares, ownership or business in jeopardy. Additionally, taking matters to court is often the last thing that business partners should do. TWO CRITICAL REMINDERS WHEN DEALING WITH DEADLOCK Regardless of how business partners approach deadlock or even a minor dispute, they must keep two things in mind throughout the process: They must always put the interests of their business first They should try to remain professional at all times These reminders might be unnecessary, but they always bear repeating. Putting the business first can often help partners find a solution that can work for the whole business as they move forward.

Disability discrimination claims are on the rise according to the Equal Employment Opportunity Commission (EEOC). They have steadily increased over the last decade, making up nearly 36% of all cases filed with the EEOC in 2020. That is why employers must be consciously aware of the steps they can take to reduce those claims, especially when it comes to the hiring process. REMEMBER, THE ADA APPLIES TO HIRING PROCESSES California employers know that the Americans with Disabilities Act (ADA) prevents discrimination against those with disabilities in the workplace. However, it does not only protect employees. The ADA applies whenever an employment decision or action is made – including the applying, hiring and training process. That means it also covers qualified applicants and candidates for a position. Therefore, employers must ensure they understand and apply the technical elements of the ADA in these situations. They must also take great care to: Make sure their applications do not include questions regarding medical history or disability information Be careful about the questions they ask applicants during the interview Provide reasonable accommodations to applicants when requested Adjust training practices and processes as necessary Individuals do not have to be employees in order to file a discrimination claim. This is critical for employers to remember. BE VIGILANT DURING SCREENING PROCESSES TOO All employers must also keep the rules of the ADA in mind as well during the screening process of employees. NBC reports that it is becoming a popular practice for employers to have applicants complete aptitude and personality tests during the screening process. These tests and the assistance of automation can help make the hiring process more efficient. Yet, this report states that these tests and many other automated tools often unfairly discriminate against individuals with disabilities. This is all not to say that employers should not use these efficient practices, but they must be aware of the potential issues they could face. They must have a strategy in place when using these tools, so they can avoid the legal risks.

California business owners worry about protecting their own intellectual property from threats of theft or misappropriation. That is why they take measures to maintain confidentiality throughout the business. However, they should also consider the reverse situation. What if employees accuse the business of stealing what they believe is their intellectual property? IBM is facing such an issue in New York. So, what steps should business owners take in these situations? 1. REVIEW EMPLOYMENT AGREEMENTS The first step should be to analyze the legal agreements they have with the employees. It is helpful to check that the agreement: Addresses ownership rights of this property Defines the terms and scope of ownership rights Complies with California and federal laws It is also common for employers to use Intellectual Property Contributions and Assignment Agreements. These state that property employees create on the job is usually the property of the employer. Employers should review these agreements carefully as well. 2. EXAMINE THE CIRCUMSTANCES Even if the employment agreement discusses intellectual property ownership, employers should still make sure they understand the details specific to the employee’s dispute. This means that they should investigate the creation process. This is helpful to determine who owns the intellectual property in question. For example, employers generally have legal ownership of intellectual property created by employees if: Employees created it for the business Employees used the business’s resources Employees created it within the scope of their work It is true that in most cases, the employer will have ownership rights. But it is still critical to evaluate the details unique to the circumstances. 3. ENCOURAGE EMPLOYEES TO REACH OUT PROACTIVELY Of course, employers can take proactive measures to avoid such disputes as well. While they should address the terms of ownership rights in the employment agreement, employers should also implement practices that allow open discussion about ownership. That way, companies can manage these concerns before they develop into major legal issues or disputes.

Maintaining a clean and safe workplace is an important matter that employers must take seriously. Hazards in the workplace can lead employers to face serious fines and even lawsuits in some cases. In the last year, workplace safety has become more important than ever. This means that employers must make sure they comply with California workplace safety requirements. WHAT SHOULD EMPLOYERS DO? Workplace safety is one of the major labor matters that you must understand, and because workplace rules ever-changing, it’s always worth reassessing the efforts you take regularly. A few critical steps that employers should take annually generally include: Staying up to date: Employers should not only review relevant laws, but they should make sure they are aware of any changes to workplace safety requirements. This includes changes in industry standards or reporting rules. It is often helpful for employers to consult an experienced attorney to confirm they comply with the necessary laws. Revising training: It is also critical to evaluate employee training practices and content. Training is one of the most important matters of workplace safety, and employers could face liability if they do not train employees properly. Additionally, they should review the reporting procedures established for employees to voice their safety concerns. Providing PPE: Personal protective equipment (PPE) has become another major issue in the last year. And an employer must provide their employees with the PPE they will need to stay safe on the job. Failing to do so can be serious for employers. For example, if PPE is addressed in the employee’s contract, employers could face claims that they breached the contract. Posting notices: One simple measure that employers often overlook is ensuring they have the proper postings visible in the workplace. They must make sure they have the correct workplace posters in plain sight, according to California law. Protecting employees – and their rights – in the workplace is critical. It is a proactive step that can help employers mitigate the risk of facing lawsuits down the line.

In many cases, the resolution of a business lawsuit frequently ends in a settlement. Regardless of how business owners approach resolving the legal dispute, the parties will lay out the terms of their resolution in a settlement agreement. California business owners should treat this document like they would any other agreement and must therefore make certain that it contains all the terms it needs, and resists terms that could be adverse to their business. WHAT ALL BUSINESS OWNERS MUST DO BEFORE THE SETTLEMENT Many business owners want to put the legal dispute behind them, but they must take time to look over (or preferably have their attorney draft) the settlement agreement carefully. There are three things that business owners should confirm in particular: The language is not ambiguous: Business owners should review the document’s language to make sure it does not include ambiguous statements. The agreement and settlement should be clear to both parties. In these cases, it is often beneficial for business owners to review the document with an experienced business attorney. The agreement addresses all legal claims: It is common for business owners to use a template to outline their settlement agreement. When this happens, they might lose track of the original claims during the negotiations. Business owners should make sure the settlement agreement discusses all of the relevant details of the claim. It clearly explains the terms of the settlement: Business owners must pay attention to detail when establishing the terms of the settlement. There can be a long list of terms. For example, many business owners include a confidentiality clause that prevents either party from discussing the matter or disclosing details. These terms may have a long-term effect on the business, so business owners must consider them carefully and ensure they are correct. Generally, business owners can rely on their attorney to reduce risks and ensure the settlement agreement is fair and correct. However, it is still important for business owners to understand the important details their settlement agreement should include, so they can protect their business.

Even if business owners take steps to secure their trade secrets, it is still not uncommon for them to be misappropriated by either an existing competitor or perhaps by a former employee who wants to start his or her own competing business. Because maintaining the integrity of their trade secrets is crucial to a business’s success, misappropriation of those trade secrets could be devastating to the business. This concern came center stage for business owners large and small when tech giant Apple filed a lawsuit against a former employee for stealing and leaking trade secrets. This is the worst-case scenario for many businesses, so it is important that they know how to move forward in this situation. MOST IMPORTANT STEP TO TAKE AFTER A TRADE SECRET LEAK While it is important to act quickly when trade secrets are at risk, business owners must also act strategically – especially when it comes to filing a lawsuit. Therefore, the first thing a business owner should do is to immediately retain a reputable business litigation firm. That firm will have a stable of experts experienced in building the case necessary to prevail in court by establishing two basic facts: Prove Measures Taken to Preserve Trade Secrets Were Adequate: The United States Patent and Trademark Office (USPTO) states that trade secret owners must take reasonable steps to keep the information a secret. Business owners should review their trade secret policies, as well as the implementation of those policies. If the business owner did not take reasonable measures, then businesses may not have grounds to recover damages. Calculate the losses suffered: Assuming measures to preserve their trade secrets were adequate, the business owner must then be able to demonstrate that their business would face significant damage due to the misappropriation of the trade secret. The law firm, in conjunction with the client and forensic expert calculate the losses suffered as a direct result of the misappropriation. An experienced law firm can help a business both put in place appropriate legal safeguards, as well as discharge those intellectual property rights – through litigation if necessary – if those critical elements of your business are misappropriated.

Innovation is a constant in the business world. The events of this past couple years has pushed businesses to strategize and innovate to continue to serve consumers and earn a profit. However, in some cases the innovation and growth of one entity or industry can put others at risk if they do not adhere to business laws. One such case came to light near the end of 2020, but it is still critical to understand the details involved. GRUBHUB CASE SHOWS RISKS BUSINESS OWNERS FACE NOWADAYS In October 2020, several restaurants across the nation filed a lawsuit against the food delivery company Grubhub. They claimed that the app listed nearly 150,000 restaurants participating in Grubhub’s delivery that had not given their permission to be listed in the app or affiliated with the company. According to CBS News, the restaurants claimed in the lawsuit that Grubhub: Violated federal laws by falsely advertising their partnership with these restaurants, in turn misleading consumers Infringed on their trademarks in using the restaurants’ names, logos and menus The restaurant owners state they did not agree to enter a partnership arrangement with Grubhub. And yet, they claim that by listing these restaurants, Grubhub unfairly profited. NEW FRONTIERS REQUIRE NEW STRATEGIES Business owners must be diligent when they face innovations like this. The Grubhub case highlights a significant challenge many businesses are facing in the current environment. It is not just restaurants dealing with these legal issues either, though they are more susceptible to it with the rise of third-party delivery apps like Grubhub. This is why California business owners must ensure they: Monitor the online presence of their business Protect their trademark rights Review their rights under state and federal laws The current environment of the business world is one that owners of companies large and small did not see coming. That is why it is all the more important for business owners to be on their guard now and with every step forward.

California employers should know that retaliation charges can pose a serious risk their business. It is not only illegal, but it can cause significant harm. EMPLOYER RETALIATION STILL ON THE RISE The Equal Employment Opportunity Commission (EEOC) reports that cases of retaliation are still increasing at a significant rate over the years. In 2020, retaliation claims made up 55.8% of all the charges filed with the EEOC – more than half of all the claims. The reasons behind this increase vary widely. However, one reason for the high numbers is likely that employees are more willing to speak out about discrimination and harassment in the workplace. Many social and workplace movements have contributed to this, but it is up to employers to stop retaliation. ACTIVE STEPS ARE NECESSARY TO STOP RETALIATION When dealing with employee complaints, employers should play an active roles in preventing retaliation. We have discussed the importance of this in previous blog posts. Unfortunately, creating and implementing an anti-retaliation policy is not enough to stop it from occurring. Employers must make sure both employees and leadership understand the business’ policy towards retaliation, and in addition should: Regularly review the reporting process and make sure it is employee-friendly Include practices against retaliation in leadership training efforts Carefully evaluate employment decisions for any risk factors of retaliation