Employers Beware: Gender-Neutral Bathrooms are Now Law in California

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

On March 1, 2017, AB 1732, or the Equal Restroom Access Act, went into effect.  The law seeks to combat gender identity discrimination by making it mandatory for all single occupancy restrooms in any business establishment, place of public accommodation, or government agency to be identified as all-gender toilet facilities.  For the purposes of this bill, a “single occupancy restroom” is defined as “a toilet facility with no more than one water closet and one urinal with a locking mechanism controlled by the user.” What this means for companies and employers is that any business with single-occupancy bathrooms must make the bathrooms gender-neutral.  Additionally, the restrooms should be identified as all-gender toilet facilities by signage that complies with Title 24 of the California Code of Regulations.  As of now, this Bill does not apply to multi-stall bathrooms, nor does it require any workplace to add to existing facilities.  Therefore, if your workplace only provides multi-stall bathrooms, then this law does not affect your place of work. The bill allows an inspector, building official or other local official responsible for code enforcement to inspect for compliance with AB 1732.  While the bill does not provide for any penalty for non-compliance, employers and companies that fail to comply to run the risk of being sued for discrimination. If you have questions regarding AB 1732 or any other employment laws, the attorneys at Navigato & Battin are here to offer...

read more

The Necessity of Buy-Sell Agreements for all Co-owned Companies

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

As attorneys, we are unfortunately tasked with thinking through and planning for the worst case scenarios.  It is always easier (and significantly less expensive) to address possible negative outcomes and set a path for resolution that everyone is clear on and agrees with ahead of time, when everyone is getting along, than after the fact, when people are significantly less likely to be willing to work together.  This is one of the reasons we advise our co-owned company-clients to enter into buy-sell agreements with their co-owners early on.  A buy-sell agreement protects the company and its owners when a co-owner voluntarily or involuntarily leaves the company, or when there is a significant dispute or change of heart about how the company should operate. The purpose of the agreement is to predetermine how the owners’ ownership interests will be sold or transferred upon the happening of certain ‘triggering events.’  While the triggering events vary based on the company’s needs and goals, the most common triggering events include: divorce of an owner, death of an owner, bankruptcy of an owner or other assignment to creditors, permanent disability of an owner, or an owner’s withdrawal from active participation in the company.  It is basically a prenuptial agreement between business owners. The buy-sell agreement lays out the options the company and other owners have in the event a triggering events occurs.  For example, in the event of the death of an owner, many companies want the option to purchase the deceased owner’s interest from his/her estate rather than having the estate retain the ownership interest in the company (and potentially inserting a stranger into the business operations).  The buy-sell agreement would state exactly what the rights of the company and other owners are, including the formula for determining the value of the deceased owner’s ownership interest and setting out payment terms should the company elect to purchase the shares back. To ensure the availability of funds in the event of an owner’s death, many parties will purchase life insurance policies on each of the owners.  Thus, in the event of death, the proceeds from the policy are used to fund the purchase the deceased owner’s interest. While no one expects to get into disputes with their co-owners during these major events, the reality is that no one can predict the future and prudent planners will find a way to proactively address just what happens in the event a business relationship takes an unexpected turn.  A properly thought out and drafted buy-sell agreement can prevent fighting between family members, co-owners and spouses, keep the business afloat, and avoid liquidity problems that often arise on during these unforeseen events. If you are interested in discussing whether a buy-sell agreement is necessary for your company, the attorneys at Navigato & Battin are here to...

read more

Could AB 199 Destroy the Housing Marketing in California?

Posted by on Apr 4, 2017 in Newsflash | 0 comments

For the past several weeks, the construction industry has been buzzing with opinions regarding Assembly Bill 199 (“AB 199”).  AB 199, which was introduced by Assemblyman Kansen Chu, D-San Jose, and authored in part by the Construction Trade Council, requires that workers be paid “prevailing wage” on residential projects that have any agreement with the state or a political subdivision. The last portion of that phrase (“…any agreement with the state or political subdivision”) is the primary point of contention with AB 199.  Critics of AB 199, which include the California Chamber of Commerce, the California Building Industry Association, the California Business Roundtable, the California Manufacturers, and many other associations, argue that this phrase is ambiguous and that it could apply to the mere pulling of permits for a housing project.  If opponents are correct on this assumption, AB 199 would impact virtually every residential housing project in the state, with builders estimating it would raise home construction costs up to 45% and increase housing prices by approximately $90,000. For his part, Chu denies that this provision applies to the simple pulling of permits.  However, if AB 199 passes the Assembly and Senate and Governor Jerry Brown signs it into law, it will undoubtedly wind up in the courts for judges to interpret its meaning.  With so much at stake, one would hope for clearer guidance from the drafters of the legislation.  The first hearing on AB 199 was March 15th and drew a large opposition crowd.  It will certainly be interesting to see how the battle over AB 199 unfolds, and as always, Navigato & Battin, will keep you apprised of any new...

read more

Costco takes on Titleist

Posted by on Apr 4, 2017 in Newsflash | 0 comments

Avid golfers may be interested in the legal showdown between two industry giants, Costco and Titleist.  Costco sells golf balls – at $15 a dozen – under the brand Kirkland Signature.  Recently, the parent company of Titleist sent a letter to Costco claiming that the Kirkland Signature balls violated patents held by Titleist.  It also claimed “false advertising” based on Costco’s claim that all Kirkland Signature products “meet or exceed the quality standards of leading national brands.”  Titleist demanded that Costco stop selling the balls. Costco did not take Titleist’s written demand lying down.  Not only did Costco refuse to stop selling the golf balls, it filed a lawsuit against Titleist.  According to Dan Navigato (a partner at Navigato & Battin and avid golfer himself), “The lawsuit is in effect a preemptive strike by Costco.  By filing the lawsuit, Costco seeks an affirmative ruling by the court that the golf balls it is selling under the Kirkland Signature brand do not violate any of Titleist’s patents.” The lawsuit could take years to resolve.  Until then, you may want to stock up on the Kirkland Signature golf...

read more

The Costly Punishment for Damaging Your Neighbor’s Trees

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

At some point or another, it is likely that every person will eventually have to deal with a boundary dispute.  A particularly common boundary dispute involves the trimming or cutting of a neighbor’s tree when the tree has grown over a property line.  Under California law, an adjoining landowner may reasonably trim the branches of a neighbor’s tree which overhang onto his/her property, but only up to the property line.  Adjoining land owners are not permitted to enter a neighbor’s property to trim or remove the tree or its branches. Recently, a defendant found out the hard way what the repercussions of entering a neighbor’s property to abate the encroachment can be.  On January 31, 2017, the California Court of Appeal ruled that annoyance and discomfort damages resulting from tortious injuries to timber or trees are subject to the statutory damages multiplier.  Fulle v. Kanani, Case No. B271240.  The plaintiff in this case had several trees on her property which she claimed provided aesthetic benefits, shade, and privacy.  However, the trees partially blocked the defendant’s view of the San Fernando Valley.  Thus, defendant hired a work crew that went onto plaintiff’s property without her permission and cut the trees to approximately half their height and removed all the tree branches. Plaintiff sued the defendant for trespass and negligence, requesting treble damages under California Code of Civil Procedure section 733 and California Civil Code section 3346.  The case was tried before a jury, which found that defendant intentionally, willfully, and maliciously entered plaintiff’s property and cut her trees.  The jury awarded the plaintiff $27,500 for damages to the trees, $20,000 for the cost of repairing the harm, and $30,000 for noneconomic loss, including annoyance and discomfort, loss of enjoyment of the property, inconvenience and emotional distress.  Plaintiff then went on to request treble damages for both her economic and noneconomic harm.  The trial court ruled that treble damages were only applicable to economic damages, not noneconomic damages. On appeal, the Court of Appeal ruled the opposite, finding that annoyance and discomfort damages resulting from tortious injuries to timber or trees are the subject of damage multipliers under both sections 733 and 3346.  This ended up being a costly lesson for the defendant.  Adjoining land owners have a duty to act reasonably in cutting any encroaching trees or branches.  If you are ever unsure about your rights, the attorneys at Navigato & Battin are here to provide...

read more

Necessary Steps when Closing Your Business Doors

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

Closing a business is rarely an easy choice.  It is often stressful and in many situations disappointing.  However, all feelings aside, there are several steps that business owners should take when closing their doors. Notifying Employees Employees should be notified of your decision as soon as possible.  Whether it is 30 days or 2 weeks, the sooner the employees know, the more time they have to look for alternate employment. Selling Assets and Paying Debt With the closing of a business comes the selling of assets.  Any assets in the company name, such as equipment, vehicles, inventory, or furniture should be sold to the extent possible.  Once the assets are sold, the debt, if any, should be paid off. Filing with the Secretary of State In order to dissolve a corporation or cancel a limited liability company, certain documents must be filed with the Secretary of State.  The documents you need to file vary, in part based on whether the company has any unpaid debt.  In order to file the documents with the Secretary of State, your company must be in good standing with the Secretary of State and the Franchise Tax Board.  In addition to filing these documents, the owners of the company should prepare minutes to document their agreement to close the company. Final Tax Return The state requires all closed companies to file a final tax return in their last year of operations.  A CPA will be able to assist in the filing of any returns and any tax issues related to the sale of any assets. Contact Third Parties Any individuals or other entities that have an interest in the company should be notified.  For example, if any contracts have dates that end after the closing of the company, the company should contact those contracting parties to resolve any lingering issues and notify them of the closure. Distributions After all of the assets have been sold and debts settled, if there are any remaining company assets, they should be distributed to the owners in proportion to their ownership interests.  If there is personal property or real property, an appraiser may be necessary to determine the fair market value.  Once the assets are distributed, the bank accounts should be closed. The bottom line is this- closing a business is always more difficult than expected.  Don’t sidestep important legal requirements or problems you thought you were avoiding may follow you into the future.  Before closing your business, talk the situation over with the lawyers at Navigato &...

read more

On-Duty or On-Call Rest Breaks Violate California’s Labor Code

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

Recently, the California Supreme Court ruled on whether California law requires employers to provide off-duty rest periods.  In other words, must employees be relieved of all work-related duties and free from employer control during their rest breaks? This issue came to light in Augustus v. ABM Security Services, Inc., No. S224853, where 14,000 security guards for ABM Security Services brought a class action against ABM, alleging its policy of requiring its security guards to keep their pagers and radios on during rest periods and to remain “vigilant and responsive to calls” during rest periods violated California’s Labor Code and Industrial Welfare Commission Wage Order No. 4. The trial court ruled in favor of the employees and awarded approximately $90 million in statutory damages, interest and penalties.  The Court of Appeal reversed the trial court’s decision, holding that “simply being on call” does not qualify as performing work during a rest period.  The California Supreme Court then reversed the appellate court’s decision, concluding that California law does in fact prohibit on-duty and on-call rest periods and that employers are required to “relieve their employees of all duties” and “relinquish any control” over how employees spend their rest breaks. Employers should review their policies to ensure that employees are relieved of all work-related duties and employer control during each employee’s rest breaks.  If you have any questions regarding your employment policies, feel free to contact us to discuss your...

read more

New Federal Law Prohibits Non-Disparagement Provisions in Form Contracts

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

On December 15, 2016, former President Obama signed into law the Consumer Review Fairness Act of 2016 (the “Act”).  The Act makes certain provisions of a form contract void if the provisions prohibit or restrict an individual from engaging in a review of a seller’s goods, services, or conduct. The Act applies to “Covered Communications,” which is defined as “written, oral or pictorial review, performance assessment of, or other similar analysis of, including by electronic means, the goods, services or conduct of a person by an individual who is a party to a form contract with respect to which such person is also a party.”  Under the Act, “Form Contract” is defined as “a contract with standardized terms that is: (1) used by a person or entity in the course of selling or leasing its goods or services; and (2) imposed on individuals without a meaningful opportunity for them to negotiate the standard terms.” The following provisions are void and it is unlawful for a person or entity to include such clauses in Form Contracts in effect on or after March 14, 2017: Clauses that prohibit or restrict the ability of an individual who is a party to the Form Contract to engage in Covered Communications; Clauses that impose a penalty or fee against an individual who is a party to the Form Contract for engaging in a Covered Communications; or Clauses that transfer or require an individual who is a party to the Form Contract to transfer to any person any intellectual property rights in review or feedback content, with the exception of a non-exclusive license to use the content, that the individual may have in any otherwise lawful covered communication about such person or the goods or services provided by such person. The Act does not protect individuals who post libelous reviews, publically slander a company or violate any duty of confidentiality imposed by law.  Additionally, companies have the right to remove or refuse to display publicly on an Internet website or webpage owned, operated or otherwise controlled by such a party any content that contains the personal information or likeness of another person, or is libelous, harassing, abusive, obscene, vulgar, sexually explicit, or is inappropriate with respect to race, gender, sexuality, ethnicity, or other intrinsic characteristic; is unrelated to the goods or services offered by or available at such party’s Internet website or webpage; or is clearly false or misleading.  Finally, the Act preserves a party’s right to establish terms and conditions with respect to the creation of photographs or video of such party’s property when those photographs or video are created by an employee or independent contractor of a commercial entity and solely intended for commercial purposes by that entity. At this point, the Federal Trade Commission has not instituted a civil or administrative action with respect to the violation of the Act.  Instead, the attorney general or other consumer protection officer of any state has the right to bring a civil action on behalf of its residents to obtain the appropriate relief. All companies should review their Form Contracts and remove any prohibited clauses from such contracts by March 14, 2017.  Additionally, companies who post consumer reviews on their websites should review their terms of use agreements and community guidelines to ensure they are...

read more

Filed Statements of Information Are Now Viewable on the Secretary of State Website

Posted by on Jan 3, 2017 in Newsflash | 0 comments

California law requires all corporations and limited liability companies to file a Statement of Information with the Secretary of State.  The Statement of Information updates an entity’s basic business information, such as the company’s principal address and the identification of current management (directors, officers, or managers).  The information contained in the Statement of Information is a matter of public record. Previously, the only way to access a company’s filed Statement of Information was to complete a record request with the Secretary of State, which would take approximately three weeks to complete.  This was often a burdensome process, especially when the information needed was time sensitive for banking, leasing or other operational purposes. Thankfully, the California Secretary of State recently updated its website and now offers all companies’ Statements of Information in a downloadable pdf form.  The Statements of Information will automatically be viewable when a business search is conducted at the following web page: https://businesssearch.sos.ca.gov/.  The available Statements of Information include the two most recently filed Statements of Information. As an additional reminder, Statements of Information are due annually for corporations and bi-annually for limited liability companies.  Failure to file, or late filing of, a Statement of Information will result in a $250.00 penalty, as well as a suspension of the entity’s “active status.”  If you need assistance with the filing of a Statement of Information or have other corporate governance compliance issues, the attorneys at Navigato & Battin are here to provide...

read more

California’s New Employment Laws- 2017

Posted by on Jan 3, 2017 in Newsflash | 0 comments

With the New Year comes a slew of new California employment laws that will dramatically affect certain businesses throughout the state.  It is advised that all California employers review the new laws below and implement the necessary changes, or speak with Navigato & Battin to find how such laws will affect your operations in 2017 and beyond. AB 2883 – Alters Workers’ Compensation Exemptions Prior law allowed officers, directors and working shareholders/members to be exempt from workers’ compensation coverage.  Under the new law, officers, directors and shareholders/members must own at least 15 percent of the outstanding stock or other ownership interests of the company to be exempt, and they must file a waiver under penalty of perjury stating that they meet these qualifications.  The revision has also removed the exemption which allowed ownership interests held in revocable trusts to be treated as a shareholder/member’s individual interest for workers’ compensation purposes.  Under the new law, if the ownership interests are held in a revocable trust, the shareholder no longer qualifies for the exemption. AB 1676 – Wage Discrimination California law prohibits an employer from paying an employee a wage rate less than the rate paid to members of the opposite sex in the same company for work which requires equal skill, effort, and responsibility under similar working conditions.  AB 1676 expands this law by establishing that an employee’s prior salary cannot, by itself, justify any inequality in compensation. AB 1063 – Wage Differential As explained above, the current law prohibits employers from paying its employees at a rate less than the rates paid to employees of the opposite sex for substantially similar work.  This law expands the prohibition of wage differential to include an employee’s race and ethnicity. AB 2535 – Itemized Wage Statements This bill clarifies Labor Code section 226 and specifies that employers need not list the number of hours worked on wage statements for any employee who is exempt from minimum wage and overtime requirements. SB 1241 – Choice of Law and Venue in Arbitration Agreements California employers are now unable to require their employees to arbitrate employee/employer disputes in another state or use a different state’s law to control the arbitration with respect to claims arising in California. AB 908 – Expansion of Paid Family Leave This bill increases the amount of benefits paid to employees on paid family leave and state disability leave from 55 percent to either 60 or 70 percent, depending on the applicants’ income. SB 1001 – Immigration Documentation Under this law, employers are prohibited from engaging in any of the following practices with respect to an employee’s or applicant’s citizenship, immigration status, and right to work: Requesting more or different documents than are required under Federal law. Refusing to honor documents that reasonably appear to be genuine. Refusing to honor documents or work authorization based on a specific status or term that accompanies the authorization to work. Attempt to reinvestigate or re-verify an incumbent employee’s authorization to work using an unfair immigration-related practice. Employers violating these restrictions can pay penalties up to $10,000. AB 2337 – Notice of Domestic Violence Protection Employers with 25 or more employees must provide employees with written notice about their rights under California’s domestic violence protection laws.  The Labor Commissioner will establish a notice for employers...

read more