The Necessity of Revising (or Creating) Sexual Harassment Policies

Posted by on Dec 1, 2017 in Newsflash | 0 comments

Over the course of the past few months, sexual harassment allegations in Hollywood, mainstream media, national politics, college and professional sports, and other high-profile areas have become hard-to-avoid front page stories.  The #MeToo campaign has also quickly picked up steam, with women (and men) of all backgrounds and all professions sharing their stories of abuse and harassment.  It is estimated that #MeToo has been retweeted almost 2 million times across 85 countries. With such heightened scrutiny, employers should create or revisit their sexual harassment policies to ensure that their companies are not only abiding by the law but also protecting their employees.  As one can imagine, harassment results in low employee morale, decreased productivity, and low retention rates.  Additionally, in terms of the monetary costs of harassment in the workplace, the U.S. Equal Employment Opportunity Commission reports that employers paid over $160 million to victims of sexual harassment in 2016—a number that is likely to grow substantially in 2018 given the high-profile events dominating the news. Now more than ever, employers must have a comprehensive harassment policy in place.  Below we have included some tips to consider when drafting or revising your sexual harassment policy. Drafting a Sexual Harassment Policy Pursuant to California’s Fair Employment and Housing Act (“FEHA”) regulations, employers with five or more employees must create detailed written policies for preventing harassment, discrimination, and retaliation.  Under the regulations, the written policy must: (1) list all of protected classes under FEHA; (2) allow employees to report to someone other than a direct supervisor; (3) instruct supervisors to report all complaints; (4) state that all complaints will be followed by a fair, complete, and timely investigation; (5) state that the employer will maintain confidentiality to the extent possible; (6) state that remedial action will be taken if any misconduct is found; (7) state that employees will not be retaliated against for complaining or participating in an investigation; and (8) state that supervisors, co-workers, and third-parties are prohibited from engaging in unlawful behavior under the FEHA. Training Personnel California state law requires employers to provide supervisory employees with two hours of interactive sexual harassment training and education every two years. (Cal. Gov. Code §12950.1.)  This requirement applies to any company that employs 50 or more employees in any 20 consecutive weeks in the current or preceding calendar year.  There is no requirement that all of the employees work in one location or even reside in California.  Among other things, the training must cover certain defined topics, must take place at least every two years and within six months of an employee assuming a supervisory position, must detail the company’s policy and the complaint procedure, and must be conducted by trainers that meet certain requirements.  For more information on the required training, visit the California Legislative Information website. Even though California does not currently mandate this training for employers with 49 employees or less, all employers should still consider providing training on their harassment policies to both employees and supervisory employees.  Among other things, the training should include: what constitutes harassment, how to report harassment complaints, how supervisors should respond to harassment complaints, and the employer’s investigative process. Communicating Policies All harassment policies must be distributed to employees.  Even if your company has already distributed its policy and is not making...

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What is a UCC-1 Financing Statement and Why Should I File One?

Posted by on Dec 1, 2017 in Newsflash | 0 comments

The Uniform Commercial Code (“UCC”) is a set of laws governing commercial transactions, such as the sale of goods, secured transactions, and negotiable instruments.  For the purposes of this article, we are focusing on secured transactions under Article 9 of the UCC.  Broadly, a “secured transaction” occurs whenever a party gives an interest in personal property to secure payment or performance of an obligation. A UCC-1 financing statement (“UCC-1”) is a document that provides notice to interested parties that the secured party has a security interest in the debtor’s personal property.  It is the most common of the several ways to “perfect” a security interest, i.e., to ensure that the secured party’s claim to the collateral has priority over later secured transactions, liens or even claims by purchasers.  Any person or entity that lends money to an individual or entity that is secured by the borrower’s personal property should file a UCC-1 or take other steps to perfect its security interest, to increase the chances that the collateral will be available to satisfy the debt, if necessary.  Despite the best of intentions, the plain fact is that borrowers sometimes encounter financial distress, making it difficult to repay their lenders.  The borrower may even die prior to paying off the loan.  In such circumstances, without a UCC-1 in place, you may lose all or part of your rights in the collateral. Properly and timely filing a UCC-1 establishes you as a perfected secured party.  This means that if the debtor goes bankrupt or dies, you have a “place in line” when the court distributes assets.  As a perfected secured creditor, you are at the front of the line, only potentially behind certain governmental and priority claims or those creditors who have filed a UCC-1 before you.  Failure to file a UCC-1 means that you are unperfected and thus placed in the “back of the line,” behind other secured creditors who perfected their interest, regardless of when those transactions occurred.  Therefore, this simple action greatly improves your chances of recovering all, or at least part, of your money. A UCC-1 should be filed with the secretary of state’s office in the state where the debtor is incorporated or lives.  A UCC-1 does not expire until the loan is paid in full, but in many jurisdictions including California, it must be renewed every five years.  If you need any assistance in filing a UCC-1 or have any questions about them, the attorneys at Navigato & Battin are here to...

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Under a New Law, Employers Can No Longer Ask an Applicant for Salary History

Posted by on Nov 1, 2017 in Newsflash, Uncategorized | 0 comments

A bill which takes effect January 1, 2018 will prohibit California employers from asking prospective workers about their salary history.  The bill, AB 168, was signed by Gov. Jerry Brown on October 12th and, according to proponents, will help close the gender wage gap.  For those following the legislative trend, AB 168 is no real surprise.  Two years ago, Brown signed the California Fair Pay Act, a comprehensive law requiring employers to pay men and women equal salaries for “substantially similar” work.  A subsequent law made it illegal to base compensation solely on a worker’s past salary. The new law applies to both men and women but, as one might imagine, it is mainly aimed at countering discrimination which can follow a woman from job to job.  According to the bill’s principal author, Susan Talamantes Eggman (D-Stockton), AB 168 “gives women the power to determine for themselves where they start negotiating.” California employers of all sizes need to carefully review their recruiting and hiring practices to make sure they are compliant.  Employers should review all recruiting and hiring documentation, including employment applications and written interview questions or outlines.   Also, employers should avoid interview questions which, while not directly asking about salary history, may elicit that information. Some elements and effects of the law which California employers should keep in mind: Applicants are free to volunteer information on prior pay and benefits, and if they do, employers may consider previous compensation in their offers. Employers are required to provide applicants, upon request, with a salary range for the jobs they seek. The prohibition against asking for salary history applies to communications “orally or in writing, personally or through an agent” – potentially extending, for example, to recruiting firms. Employers should confirm with any recruiting firm, in writing, that the firm will not ask for salary history in any of its requests for information from an applicant. Multi-state employers will need to decide whether to remove any reference to salary history from their current recruiting/hiring processes, or set up a different set of processes for California (and other states which adopt similar laws). The bill only applies to jobs within the state but employers should assume that it will apply to employers soliciting Californians for jobs out of state. California continues to be a daunting place to be an employer.  If you need assistance reviewing your current employment policies for compliance with new and existing state and federal laws, feel free to contact the attorneys at Navigato & Battin,...

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Will Your Electronic Signature Hold Up In Court?

Posted by on Nov 1, 2017 in Newsflash, Uncategorized | 0 comments

A frequent question we get asked is whether electronic signatures are binding.  Electronic signatures are those signatures executed through a signature service company, such as DocuSign, Adobe, or a company’s internal system.  For the purposes of this article, electronic signatures do not include those signatures whereby the signer actually signs a document and emails or faxes the signed document to the receiving party. However, the issue is not whether electronic signatures are binding, they clearly are.  It is whether a particular signature can be “authenticated.”  In other words, can it be demonstrated that the person who is alleged to have signed the document was actually the signatory?  Due to the increasing use of electronic signatures, the federal government enacted the United States Electronic Signatures in Global and National Commerce (ESIGN) Act and the Uniform Electronic Transactions Act (UETA) (collectively referred to as the “Acts”) to address electronic signature issues.  The Acts have four major requirements for an electronic signature to be recognized as valid (and authenticated) under U.S. law: Intent to sign – electronic signatures are only valid if each party intends to sign. Consent to do business electronically – both parties must consent to do business electronically. Association of signature with record – the system used to capture the transaction must keep an associated record that reflects the process by which the signature was created, or generate a textual or graphic statement (which are added to the signed record) proving it was executed with an electronic signature. Record retention – the electronic signature records must be capable of retention and accurate reproduction for reference by all parties or persons entitled to retain the contract or record. California’s Uniform Electronic Transactions Act is equally concerned with the authentication issue for electronic signatures and provides that “[a]n electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable.” (Civ. Code, § 1633.9, subd. (a).) Signature service companies such as Adobe and DocuSign have certain processes in place to ensure the authentication process and courts have recognized that a DocuSign-executed agreement is presumptively authentic. (See Newton v. American Debt Services, Inc. (N.D. Cal. 2012) 854 F.Supp.2d 712, 731, aff’d (9th Cir. 2013) 549 Fed.Appx. 692.)  In Newton, the plaintiff argued that “there is no proof that the electronic signature on the … contract [containing the arbitration provision] is hers.” (Id.)  The Newton court explained the DocuSign authentication process: In the instant case, the ADS contract was signed using DocuSign, a company that is used to electronically sign documents in compliance with the U.S. Electronic Signatures in Global and National Commerce Act (ESIGN). Under ESIGN, electronic records and signatures that are in compliance with ESIGN are legally binding. Are Electronic Signatures Legal?, DocuSign, https://www. docusign.com/content/are-electronic-signatures-legal (last visited Jan. 24, 2012); see also 15 U.S.C. § 7001 (2006). DocuSign permits a company to send documents to a customer for their signature. The customer opens the document for review containing areas marked for the signatory to execute. The signer creates a signature and must click a button saying “Confirm Signing” once...

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HOW TO REVIVE A SUSPENDED BUSINESS ENTITY IN CALIFORNIA 

Posted by on Oct 2, 2017 in Newsflash | 0 comments

Several months ago, we posted an article titled: Failure to File a Statement of Information or Pay California’s Franchise Tax May Result in the Loss of Your Company’s Name, discussing the importance of complying with the California Secretary of State and California Franchise Tax Board’s (“FTB”) requirements to ensure your company remains in good standing.  As we explained, an entity may be suspended by the Secretary of State for failing to file its Statement of Information on time or by the FTB for failing to file tax returns, pay taxes, or pay the yearly $800 FTB tax.  However, if your company has gotten suspended, it can be revived (with some additional stress and money…of course!). Reviving an Entity Through the Secretary of State Entities labeled as “SOS Suspended” are suspended by the California Secretary of State for failing to file a Statement of Information.  These entities can be revived by paying a penalty, which is typically $250, and filing the missing Statement(s) of Information.  Often times, the Secretary of State will assess the $250 penalty prior to suspending the entity, so your company may still be “Active” on the Secretary of State’s website and still owe the penalty.  Once the penalty has been incurred, in order to avoid suspension it must be paid. Reviving an Entity Through the Franchise Tax Board Reviving an entity that is “FTB Suspended” is a bit more complicated.  First, unless you are aware of why the FTB has suspended your entity, you will need to call the FTB to determine the reason for the suspension.  Second, the entity must file an Application for Revivor, which is Form 3557 on the FTB website.  This form must be submitted by an owner, officer, or a majority of the company’s board of directors or managers.  With this form, the entity must file all delinquent tax returns and pay all delinquent taxes, including penalties and interest.  Depending on the company’s specific situation, this process can take anywhere from a couple of weeks to a couple of months.  Upon compliance with the FTB’s requirements, the FTB will check with the Secretary of State to ensure the name is still available (companies lose rights to their names when suspended).  After that, the FTB will issue a Certificate of Revivor, which reinstates the entity.  The Secretary of State will then change the entity’s status back to “Active”. Potential Problems with Contracts As discussed in our previous article on the topic (referenced above), when an entity is suspended, contracts entered into by the entity during that time are voidable.  Reinstatement does not change this fact.  If a contract was voided during the period of suspension, it will remain voided after the entity is revived.  Additionally, if a contract was entered into during the suspension but was not voided during the suspension, it can still be voided by the other party after reinstatement. Luckily, entities can protect themselves against this consequence, but like all things in California, it will cost you.  Relief can be obtained by filing the Relief From Contract Voidability, Form 2518 and paying a penalty of the lesser of: (1) $100 per day; or (2) an amount equal to the amount of the taxes due for that year (less any interest or penalties assessed with the taxes).  Once the form...

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FLSA’S SALARY EXEMPTION INCREASE OVERTURNED

Posted by on Oct 2, 2017 in Newsflash | 0 comments

In May 2016, President Obama signed into law a measure that would increase the salary requirements relating to the federal white-collar overtime exemption under the Fair Labor Standards Act (“FLSA”).  The law was supposed to take effect on December 1, 2016, and aimed to prevent workers from being denied overtime pay under the white-collar exemption if they made less than $913 per week (or $47,476 per year) as a full-time employee.  However, on November 22, 2016, a federal district court judge in Texas placed an injunction on the Department of Labor’s overtime rule revision, thus delaying the revision’s December 1st effective date. On August 31, 2017, the federal district court in Texas granted summary judgment for the plaintiffs in the case, who were comprised of various business groups and 21 states.  Judge Mazzant ruled that in doubling the salary required under salary test, the Obama administration’s proposed alteration of the FLSA was not “reasonable” and therefore did not warrant the “deference” otherwise shown by courts to regulatory actions under the Chevron precedent.  “The Department has exceeded its authority and gone too far with the Final Rule,” he ruled.  “Nothing in [FLSA] Section 213(a)(1) allows the Department to make salary rather than an employee’s duties determinative of whether a ‘bona fide executive, administrative, or professional capacity’ employee should be exempt from overtime pay.” It is unlikely that the Trump administration will appeal this ruling.  Therefore, for the time being, the federal “salary test” under the FLSA remains at $23,660 annually ($455/week) for exempt employees.  But before you start slashing your payroll, please note- similar California law still requires a significantly higher minimum salary for an employee to be classified as “exempt” under state law, and employers in California are required to comply with both sets of laws.  If you have any questions concerning whether your company’s employees are being properly classified as “exempt” or “non-exempt” or any other employment-related questions, the attorneys at Navigato & Battin are here to offer you assistance....

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NAVIGATO & BATTIN, LLP OBTAINS COMPLETE VICTORY, SECURING DEFENSE VERDICT IN TRIAL ON CLAIMS FOR BREACH OF CONTRACT, COMMON COUNTS

Posted by on Sep 5, 2017 in Newsflash | 0 comments

San Diego, CA: On July 10, 2017, San Diego Superior Court Judge Judith F. Hayes ruled in favor of Navigato & Battin, LLP’s client, Aurora Spine, Inc. (“Aurora”) and against the plaintiff in a case arising from a claimed breach of contract.  In the case, the plaintiff, Veridiam, Inc., claimed that Aurora breached a contract for custom goods ordered from Veridium, and sought more than $215,000.00 from Aurora.  Pre-judgment interest could have tacked on tens of thousands of dollars more to the final judgment. After a multi-day trial, Judge Hayes found that Aurora was entitled to a defense verdict on all claims, including the granting of a rare Motion for Judgment in Aurora’s favor on the common count claim asserted by Veridium.  The judge ruled that there was no evidence that Aurora breached its obligations to Veridium based on the terms of the contracts at issue and the parties’ business relationship and dealings.  After considering the evidence and witness testimony, the judge determined that the parties had not altered their agreement by oral or written modifications (as alleged by Veridium) and that Veridium had failed to prove its case.  The court stated, “Plaintiff [Veridiam] has the burden of proof in read to its breach of contract cause of action.  Plaintiff [Veridiam] has failed to carry its burden.” Of the victory, NavBat partner and trial attorney Travis Bray, stated: “We came into the case a couple of weeks before trial, so it was a bit of a scramble to get exhibits put together, witnesses prepared, and to get cross-examinations and opening and closing statements ready for the Court.  However, we had solid defenses on our side and came into Court well prepared for everything the other side threw at us.  It is very satisfying to step into a case like this and help the client to a well-deserved victory.  The Court got this one right.” Navigato & Battin, LLP is a San Diego-based business litigation law firm, focusing on assisting small to medium-sized businesses with all of their legal needs.  If you have a trial upcoming, no matter how soon, give us a call to see how we might be able to...

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CAN YOU FIRE SOMEONE FOR BEING A POLITICAL EXTREMIST?

Posted by on Sep 5, 2017 in Newsflash | 0 comments

Following recent events in Charlottesville, Virginia involving a “Unite the Right” rally as well as other subsequent politically charged rallies, a large social media campaign has been undertaken to identify the protestors and encourage their employers to terminate their employment.  Groups such as the Ku Klux Klan, other white supremacist and white nationalist groups and even extreme liberal grounds such as Antifa are all stirring up controversy.  So, what do you do if one of your employees is involved in political activities that you do not agree with or that you believe reflect poorly on your business? These decisions require employers to consider a complex mix of the rights and responsibilities with respect to their employees, the public, and to their business in general.  In general, California law bans private employers from discriminating against workers due to their political views, affiliations, or activities, subject to certain exceptions. Cal. Labor Code §1101.  These exceptions relate to the harm such actions may inflict on your business.  For instance, if an employee participates in a political activity that creates a conflict of interest with your business model, you could consider terminating the employee’s employment.  Additionally, if your employee’s political activities are interfering with their work, it may also be grounds for termination.  California law also prohibits employers from adopting any “rule, regulation, or policy” that bars employees from running for public office, or participating in politics outside of work. Cal. Labor Code §1101.  However, if such activities interfere with the employee’s work, you may have valid grounds for termination. Finally, employers must also be careful not to violate the National Labor Relations Act by punishing employees who may be commenting about the terms and conditions of their employment.  For example, a white employee complaining about losing out on a promotion to a non-white co-worker as part of an affirmative action program may be engaging in protected conduct, depending on the circumstances.  Protections on expression are not absolute, but a certain amount of tolerance of varying viewpoints is required, whether you as an employer agree with them or not. Employment issues relating to free speech are very complex issues for employers.  The facts of any given situation vary wildly and must be analyzed on a case-by-case basis.  If you have any questions regarding federal or California employment law, the attorneys at NavBat can help you to walk this delicate...

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Want to see how important you are to your attorney? Cheat at golf.

Posted by on Aug 1, 2017 in Newsflash | 0 comments

If you have had any significant interactions with any attorney during the course of your life, and if you have even a remote interest in golf, you have almost certainly played at least a few rounds with your attorney.  Attorneys tend to love golf, most likely because attorneys view the intricate sets of rules and decorum involved in a round of golf as a near-perfect reflection of the practice of law.  Golf, like civil litigation, is viewed as an age old sport steeped in tradition.  The rules of golf, like those of the courtroom, were meant to provide a general lay of the land to allow participants to know exactly how to proceed from start to finish.  However, attorneys quickly realized that the rules dictating their behavior and actions in court were not so much rules to be followed as they were boundaries to be pushed.  With these realizations, attorneys came to understand that they could win cases by having a mastery of the finer points of procedure even where their clients did not have the best case.  Eventually, these procedural games have become almost as important as the underlying facts of the case to the attorneys who use them as weapons every day. In much the same way, your attorney almost certainly relishes the rules of golf, realizing that a mastery of those rules can propel them to victory in a match that their skills might not otherwise allow.  Your attorney likely has an encyclopedic memory of the rules of golf, and uses that memory to his or her advantage whenever possible.  So how do you determine how important you are to your attorney?  Go ahead and break those rules the next time you play a round of golf with him.  Kick that ball out of a divot and into a more favorable lie.  Ground that club in a hazard.  See how many times you can break minor rules before your attorney says something to you about it.  It is an absolute certainty that he sees it every time.  If you can get away with five or more breaches in a single round without hearing a word about it, you are likely a very important client!  At the very least, you can be sure you will be driving your attorney nuts in the meantime.  But take solace in the fact that the same way of thinking that makes those rules so important on the golf course will serve you well when that same attorney is fighting for you in court.  And if you ever need someone to play a round of golf with, the attorneys at Navigato & Battin are here to...

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Navigato & Battin’s 19th Annual Opening Day at the Del Mar Races

Posted by on Aug 1, 2017 in Newsflash | 0 comments

On July 19, 2017, Navigato & Battin held its 19th Annual Opening Day at the Del Mar Thoroughbred Club.  Clients and friends enjoyed a day of mingling, food, wagering, and even a magician.  Of the day, Daniel Navigato states, “NavBat Opening Day is always one of my favorite events of the year, as it gives us the opportunity to show appreciation to our clients and friends while having fun in the process.” Whether you walked away with your pockets a little heavier or were amazed at the magician’s mind-boggling tricks, we enjoyed socializing with everyone outside of the business setting.  Thank you to all those who attended and we look forward to seeing everyone at next year’s...

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