Articles

2010 California Employer Update

by Roberta S. Hayashi, Kara L. Arguello and Lisa L. Gorecki
January 20, 2010

FEDERAL LAWS

Genetic Information Nondiscrimination Act

On November 21, 2009, the Genetic Information Nondiscrimination Act (GINA) became effective.  GINA applies to employers of 15 or more employees, and makes it illegal to discriminate against applicants or employees on the basis of genetic information.  The law also limits an employer’s acquisition and disclosure of such genetic information.

Genetic Information can include (1) an applicant’s or employee’s genetic tests, such as analysis of DNA or chromosomes that detects genotypes, mutations or chromosomal changes; (2) the genetic tests of an applicant’s or employee’s family members; or (3) the manifestation of a disease or disorder in an applicant’s or employee’s family members.

Genetic Information does not include medical information about an applicant’s or employee’s manifested disease, disorder or pathological condition.  Such information may, however, be protected under other laws such as the Americans with Disabilities Act (ADA) or the California Medical Information Act (CMIA).

GINA prohibits:

• Intentional discrimination on the basis of an applicant’s or employee’s Genetic Information in any aspect of employment;
• Harassment due to or based on an employee’s Genetic Information;
• Retaliation against an applicant or employee for opposing discrimination due to or based on Genetic Information;
• Acquisition of Genetic Information with respect to an employee or an employee’s family member, unless an exception applies.

There are many ways employers may unintentionally acquire Genetic Information.  GINA does not prohibit the acquisition of Genetic Information in the following situations:

• Where an employer inadvertently acquires Genetic Information, such as overhearing an employee talking about a family member’s illness;
• Where an employee requests time off to care for a family member with a serious health condition, and discloses Genetic Information while going through the family medical leave certification process;
• Where an employee discloses Genetic Information as part of a wellness program offered by the employer, where participation is voluntary (and other conditions are met);
• Where an employee discloses Genetic Information through a program that monitors the biological effects of toxic substances in the workplaces (provided defined conditions are met).

Employers must keep any Genetic Information they receive or acquire in a separate, confidential medical file.  This information must not be kept in the employee’s regular personnel file.  It is unlawful for an employer to disclose any Genetic Information about applicants or employees except under very limited circumstances.

Applicants or employees must file administrative charges with the Equal Employment Opportunity Commission before pursuing civil litigation.  GINA makes available the remedies and enforcement procedures prescribed under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act.

DOD Bill Expands Federal COBRA

The American Recovery and Reinvestment Act (ARRA) expanded an employer’s obligations under COBRA.  ARRA put into place a subsidy program under which employers who are covered by COBRA were to (1) identify employees involuntarily terminated during the period of September 1, 2008 and December 31, 2009; (2) reduce the COBRA premium for eligible individuals and their eligible dependents by 65%; (3) extend the COBRA election period for eligible employees who did not enroll in COBRA prior to February 17, 2009, and notify these employees that they can now enroll in COBRA at reduced rates; and (4) update their COBRA notification and election forms.

On December 19, 2009, Congress passed the Fiscal Year 2010 Department of Defense (DOD) Appropriations Act (the “DOD Bill”), and President Obama signed it into law the same day. 

The DOD Bill extends and expands the COBRA subsidy program that was enacted under ARRA as follows:

• The period during which employers must subsidize 65% of COBRA premiums is expanded from nine to fifteen (15) months.
• The eligibility period, originally set to expire on December 31, 2009, has been extended to February 28, 2010.
• Those eligible individuals whose subsidy period expired on November 30, 2009 now have a retroactive period of sixty (60) days to receive payment of premiums.
• Employers are to provide a special notice outlining these changes within sixty (60) days to all eligible individuals who applied for COBRA on or after October 31, 2009, or those who were terminated after October 31, 2009.
• The DOD Bill clarifies ARRA’s COBRA subsidy program to note that eligibility and notice are based upon the timing of the qualifying event.

The DOD Bill also expands unemployment benefits.  Specifically:

• The end date by which individuals may apply for Federal Emergency Unemployment Compensation (EUC) is extended to February 28, 2010 (from the original end date of December 31, 2009).
• The period during which individuals may claim and be paid EUC is extended from May 31, 2010 to July 31, 2010.
• The period during which individuals may qualify for the Federal Additional Compensation (FAC), the $25 weekly benefit amount added to state and federal unemployment compensation, is extended from the current end date of January 1, 2010 to February 28, 2010, with weekly payment provided during the phase-out period for weeks ending June 30, 2010 to August 31, 2010.

Small employers in California are impacted by these changes, too.  In May 2009, California’s legislature enacted AB 23, which extended ARRA to employers with fewer than 20 employees, who are not covered by COBRA, but Cal-COBRA.

STATE LAWS

Cal-COBRA Premium Assistance

AB 23:  On May 13, 2009, the Governor signed a bill which extends the federal COBRA premium subsidy (introduced by the American Reinvestment and Recovery Act (ARRA) of 2009), available to “assistance eligible individuals” (i.e., employees involuntarily terminated between September 1, 2008 and December 31, 2009).  While the federal subsidy program under COBRA covers employers with more than 20 employees, the California law requires that employees with fewer than 20 employees give notice of ARRA’s benefits.  This California bill requires health care plans and insurers to notify “qualified beneficiaries” about the premium assistance available under ARRA to subsidize Cal-COBRA coverage. 

Alternative Workweek Schedules

AB 25:  Effective May 21, 2009, the California Legislature passed and the Governor signed a bill amending the Labor Code Section 511 affecting alternative workweek arrangements.  Section 511 permits employers to propose and employees to approve alternative workweek schedules (such as a four-day, ten-hour workweek).  Prior law specified that employee approval required a secret ballot election of at least 2/3 of the affected employees in a “work unit,” but failed to define “work unit.”  The amended section 511 specifies that a “work unit” includes “a division, a department, a job classification, a separate physical location or a recognizable subdivision.”  It also specifies that it may include an individual employee if that employee otherwise satisfies the criteria of a “reasonably identifiable work unit.”  The bill also authorizes employees, with their employer’s consent, to move on a weekly basis from one work schedule to another on the adopted menu of work schedule options.

Electronic Discovery Act/Document Retention

AB 5:  This bill amended California’s Civil Discovery Act to establish procedures for the discovery of “electronically stored information.”  A party seeking production of electronically stored information may specify the format to be produced, but if no particular format is requested, the responding party may produce the information in the manner it is ordinarily kept or in a reasonably usable format.  California law now permits discovery by means of copying, testing, or sampling, in addition to inspection.  In addition, trial courts may award monetary sanctions against parties and attorneys who fail to comply with the new provisions.  The new law does not permit monetary sanctions where electronically stored information was lost, damaged, or overwritten as a result of the routine, good faith operation of an electronic information system. 

Updated Wage Withholding Tables

AB 17:  This new law requires employers to use increased wage withholding tables.  The new withholding tables took effect on November 1, 2009.  For wages paid after November 1, 2009, the bill increases the applicable withholding rates on employee wages by 10%.  The bill also increases the withholding rates on supplemental wages, stock options and bonus payments. 

Hate Crimes: Nooses

AB 412:  California’s Hate Crimes Law prohibits the display of certain symbols with the intent to terrorize other persons.  For example, the law bans the display of swastikas and burning crosses.  Effective January 1, 2010, AB 412 expands the Hate Crimes Law to prohibit the hanging of a noose, knowing it to be a symbol representing a threat to life, in certain places, including a place of employment, for the purpose of terrorizing an occupant of that place.  Violation of this law could result in imprisonment and civil fines up to $5,000 for the first offense. 

Civil Air Defense Patrol Permitted Leave

AB 485:  California law now requires employers of more than 15 employees to provide not less than 10 days’ leave per year, in addition to any leave benefits otherwise available, to those employees who are volunteer members of the California Wing of the Civil Air Patrol, and who have been duly directed and authorized to respond to an emergency operational mission.  Leave is only available if the employee has been employed for at least 90 days immediately preceding the commencement of leave.  The employee is required to give the employer as much notice as possible of the intended dates upon which the leave is to begin and end.  Upon expiration of the leave, the employer is required to restore the employee to the position he or she held when the leave began or a position with equivalent seniority status, employee benefits, pay, and other terms and conditions of employment, unless the employee is not restored because of conditions unrelated to the exercise of the leave rights by the employee. 

Confidentiality of Medical Information

AB 681:  Existing law prohibits providers of health care, health care service plans, and contractors from releasing medical information to persons authorized by law to receive that information if the information specifically relates to a patient’s participation in outpatient treatment with a psychotherapist, unless the requester of the information submits a specified written request for the information to the patient and to the provider of health care, health care service plan, or contractor.  However, existing law excepts from those provisions specified disclosures that are made for the purpose of diagnosis or treatment of a patient.  This bill amends Civil Code §56.104 to also except from these provisions disclosures that are made to prevent or lessen a serious and imminent threat to the health or safety of a reasonably foreseeable victim or victims.

Workers’ Compensation/Pre-Designation of Physician

AB 186:  Existing workers’ compensation law generally requires employers to secure the payment of workers’ compensation, including medical treatment, for injuries incurred by employees that arise out of or in the course of employment.  Former Labor Code section 4600 provided that, through December 31, 2009, an employee has the right to be treated by his or her personal physician from the date of injury if specified requirements are met, including a requirement that the physician agree to be pre-designated.  The amended Section 4600 deletes the December 31, 2009 repeal date.

Workers’ Compensation/Treatment Authorization

AB 361:  Existing workers’ compensation law authorizes an employer or insurer to establish or modify a medical provider network for the provision of medical treatment to injured employees, and to enter into contracts for the provision of medical services to injured employees with a health care organization that has been certified by the administrative director for this purpose.  This bill added Section 4610.3 to the Labor Code, which provides that an employer who authorizes medical treatment with a medical provider network or health care organization shall not rescind or modify the authorization for the portion of medical treatment that has already been provided, for any reason, even if the employer subsequently determines that the physician who treated the employee was not eligible to treat.  The employer may transfer treatment of an injured employee into a medical provider network or organization, or establish that a provider of authorized medical treatment is the primary care physician for specified purposes.

ADMINISTRATIVE DEVELOPMENTS

Division of Labor Standards Enforcement (“DLSE”) Opinion Letters

Temporary Reduction in Workweek and Salary for Exempt Employees

2009.08.19:  Reversing its 2002 opinion on the subject, the DLSE issued an opinion letter stating that employers may temporarily reduce the salaries of their exempt employees along with a matching reduction in work schedules during periods where the employer operates shortened workweeks due to economic conditions, without the presumption that such a change destroys the exempt status of those employees. 

In the new opinion letter, the DLSE stated that federal regulations and relevant federal court decisions have determined that reducing salaries of exempt employees during periods the employer used shorter workweeks due to economic conditions does not necessarily violate the salary basis test for exemption.  Nor does the Labor Code or the Industrial Welfare Commission’s wage order provisions prohibit employers from simultaneously reducing work schedules and salaries of exempt employees.

As a result, California employers may, for example, temporarily reduce employee salaries by 20 percent and implement a temporary 4-day workweek, without calling into question the exempt status of the employees.  However, the reductions must due to economic conditions, be temporary in nature, employers must not use the salary and correlating scheduled reduction to circumvent the requirement that the employees be paid their full salary in any week in which they perform work, and the reductions must be applied prospectively, not retroactively.

The full text of the opinion letter can be found at www.dir.ca.gov/dlse/opinions/2009-08-19.pdf.

Approval of Alternative Workweek Schedule

2009.03.23:  This Labor Commissioner opinion letter authorizes employers to adopt alternative workweek schedules for summer months, provided that they comply with all regulations otherwise applicable to the adoption of such schedules (i.e., election procedures, notice requirements, etc.).  In the facts presented to the Labor Commissioner, it was permissible for a manufacturing employer to adopt a summer schedule of four 9-hour days and one 4-hour day, without incurring overtime for non-exempt employees working this schedule, and to maintain a normal schedule of five 8-hour days for the rest of the year.

This opinion letter clarified the issue of whether alternative work week schedules during only a particular time of year would satisfy the requirement that the schedules be “regularly recurring,” or whether employers would have to maintain such schedules for the entire year. 

The DLSE also noted that to if the alternative workweek schedule remains the same each year after it has been properly adopted by the employer under Labor Code §511, the employer does not need to conduct further elections in following years.

The full text of the opinion letter may be found at  http://www.dir.ca.gov/dlse/DLSE_OpinionLetters.htm.

Deductions from Accrued or Banked Vacation and Sick Leave

2009.11.23: Elaborating on the California court’s dicta in the 2005 Conley v. PG&E case, this DLSE Opinion Letter addresses the issue of when an employer may deduct from an exempt employee’s vacation and/or sick leave for partial or full day absences due to either illness or personal reasons without destroying his/her exempt status.  The DLSE states that in reviewing any deductions from leave balances, it first determines whether the company had a bona fide plan, practice or policy and if such deduction is made in accordance with the plan, practice or policy.

Assuming that an employer’s policy expressly permits the application of accrued vacation and sick time for absences from work, the DLSE has detailed the rules and regulations regarding what can be used and when.  First, the employer is always obligated to compensate an exempt employee with his/her salary for any day during which the employee performs work.  Although an employer may not deduct from an employee’s salary for a partial day absence, the employer may deduct from the employee’s leave balances for a partial day absence.  An employer may deduct from an employee’s leave balances or from an employee’s pay when the employee is absent for one or more full days and such deductions will not have an adverse effect on the employee’s status as exempt. 

Where an employee is absent from work for a full day and he/she has a sufficient leave balance, the employer may, in accordance with its plan, practice or policy, deduct the time from the applicable accrued leave. 

Where an employee is absent from work for a portion of a day for personal reasons, the employer may deduct (in accordance with the employer’s policy, plan or practice) from the employee’s vacation leave balance, to the extent that there is a balance; however, once the vacation leave balance is exhausted, the employer may not deduct pay for the hours during which the employee was absent.  Where an employee is absent from work for a portion of the day due to illness, the employer may deduct (in accordance with the employer’s policy, plan or practice) from the employee’s sick leave balance (and once sick leave has been exhausted from the employee’s vacation leave balance), but may not deduct from the employee’s salary.  The important thing to remember is that an employer must ensure that the exempt employee, who works a partial day, is compensated for a full day of work.  Such compensation can be made through a combination of deductions from leave balance(s) and paid leave.

The full text of the opinion letter may be found at  www.dir.ca.gov/dlse/DLSE_OpinionLetters.htm.

Meal Periods for Hazardous Waste Drivers

2009.06.09:  In this opinion letter, the DLSE discussed the application of California’s meal period requirements to those employees who are engaged in the transportation of hazardous explosive materials.  The issue was whether truck drivers, who are prohibited by federal regulations from leaving the trucks unattended, would be so restricted that any meal period could not considered an off-duty meal period.  The DLSE concluded that the restrictions imposed upon the drivers during deliveries – not leaving the truck unattended and staying within certain visual distance of the truck at all times – were such that the employee would not be considered sufficiently relieved of all duties to have an off-duty meal period. 

The DLSE concluded that the application of the federal regulations may, in some circumstances, satisfy the requirements for an on-duty meal period: (1) the nature of the work prevents an employee from being relieved of all duty; (2) the employer and employee have agreed in writing to an on-the-job paid meal period; and (3) the written agreement states that the employee may, in writing, revoke the agreement at any time. 

The full text of the DLSE opinion letter may be found at www.dir.ca.gov/dlse/opinionletters.

Recouping Wage Overpayments

2008.11.25.-1:  The DLSE held that Labor Code section 221 does not prohibit periodic deductions for overpayment of wages provided the employee has expressly authorized in writing these deductions and the employee still receives no less than the minimum wage for all hours worked in the pay period.  In these circumstances, the employer is not reducing the standard wage but is simply implementing an agreed-upon overpayment recovery system for a readily ascertainable amount (i.e., the hours not worked).  However, the employee must give written authorization for these deductions, and merely submitting a time sheet reflecting fewer hours worked does not constitute such authorization.  Further, an employee still may not deduct prior overpayments from a final paycheck, even if the employee authorizes deductions from other paychecks.

Articles

Ron Beck Builds Drummer’s Dreams in San Jose

by Brian L. Shetler
December 01, 2009

Brian L. Shetler, Berliner Cohen attorney, contributed the attached article to Drum Magazine, an online publication, on December 1, 2009, regardng the Ron E. Beck Drum Institute.  Mr. Shetler was inspired by Beck’s dream to pass on some of his techniques to talented, young drummers before they get discouraged and give up on their dreams in the rough and tumble world of professional drumming.

“Ron E. Beck lifts his 5B’s. Before his throne is his performance kit that he uses at the blues and jazz festivals—a champagne sparkle 5-piece DW Drums kit with DW hardware with a single Tama Iron Cobra kick pedal and his cymbals, a 20” ride, 18” crash and a 14” splash, all of the A and K Zildjian variety…But this day he isn’t performing. Instead, he is one-on-one with a new student of his Ron E. Beck Drum Institute, operating in humble settings – a studio at the Practice Place, 1707 Fourth Street, San Jose, California. On the wall of his studio is a tambourine with his motto, “The dream is yours to realize.”  Beck has spent the last forty years realizing his dreams in bands such as Tower of Power, or other R&B, blues and jazz with whom he has shared his time and space: Bell and James, Bobby Womack, Marilyn McCoo and Billy Davis, Jr., 5th Dimension, Danny Hull Quintet (Spang-a-Lang), Sista Monica, Chris Cain, Steve Cropper, Herbie Hancock, Carlos Santana…”

For the complete article, click here.

Articles

Employment Law Alert – “Virtual” Discriminatory Harassment

by Roberta S. Hayashi
December 01, 2009

In California, workplace harassment is the basis of over 25% of the new claims filed with the Department of Fair Employment and Housing.  Many of these claims are based on a “hostile environment” theory, namely that there is unwelcome conduct of a discriminatory nature that is so severe or pervasive that it creates an offensive or hostile work environment. 

While the most common claim is based on sexual harassment, discriminatory harassment on the basis of disability, race, religion, sexual orientation or age can also occur.  California employers who fail to provide a workplace free of harassment face costly civil litigation and administrative action.

With the universal use of electronic media in the workplace, inappropriate sexual content is more easily accessed and introduced into the workplace, and has become part of the evidence in many “hostile environment” harassment cases.  Where twenty years ago, there were complaints of “pin-up posters”, now complaints are made of e-mail jokes, screensavers, and even photos posted on the internet. 

Effective policies that prohibit the downloading or transmission of offensive content and allow employers to monitor the workplace use of electronic media are essential to minimizing the litigation risks.

Hostile Environment Claims
“Hostile environment” harassment claims can be based on verbal conduct alone.  The intent of the person sending or forwarding the offensive content is irrelevant.  Instead, the harassing nature of the communication is judged from the perspective of the person receiving or viewing the material, even if he or she is not the intended recipient.  Thus, a claim can exist even where the offensive content is posted on a non-employer internet site or transmitted into the workplace on personal computers and cell phones. 

For example, unwelcome sexual conduct can consist of jokes, slurs, nicknames, terms of endearment, as well as photos, screensavers or videos, whether transmitted or merely downloaded and stored where it may be accessed by others in the workplace.  It can also occur where a manager or co-worker excessively texts or sends e-mails after hours, particularly if they are of a personal nature (e.g., “Where R U?” “Whassup?” or “U R 2hot2blve”) or takes digital photos using a cell phone and disseminating them without a person’s consent.  In extreme cases, an employee may claim that he or she is being stalked.

Today’s employers find providing a work-environment free of offensive conduct more difficult.  Employees who are entering the workforce for the first-time may have misconceptions of what is appropriate workplace conduct, based on what they see in the media (e.g., television shows such as “The Office”), and at the same time are more likely to use e-mail, text messaging and social networking sites. 

Company-wide policies and training on recognizing and preventing sexual harassment need to address virtual sexual harassment and remind employees that the company may monitor and inspect electronic communications that affect the workplace.

Minimize Liability Risk
Employers who wish to minimize their risks of liability should review and update both their written policies on recognizing and preventing discriminatory harassment as well as their electronic communications policies.  Specifically, the company’s anti-harassment policy should prohibit the misuse of electronic communications devices. 

The electronic communication policy should ban the use of any electronic device, internet access or messaging service for the purposes of discriminatory harassment on any protected basis, including sex, race, age, disability, or religion. 

The policies should broadly define electronic devices and forms of electronic communications to cover new technologies and media, as well as new forms of communication, such as social networking sites. 

Many employers are finding an alarming amount of use of company time and computers to access and “update” social networking sites – often with pictures and content that is inappropriate in the workplace.

Company policies should preserve the employer’s right to review electronic communications and thereby minimize the risk of invasion of privacy claims.  An employee’s right to privacy is determined in light of the legitimate needs of the employer to provide a work environment free of harassment. 

The scope of the employee’s right to privacy can be limited if the employer clearly communicates that the employee should have no expectation of privacy in any contact information, or the content of any information transmitted, downloaded or stored using company hardware, software or servers. 

Further, employers should expressly reserve the right to inspect any electronic device that is provided by the employer or which uses employer provided electronic services, e.g. e-mail, internet access or text messaging.

IT Access Key to Effectiveness
As with all company policies that address discrimination and harassment, the company policy should provide a means for employees to report instances of discrimination and harassment, as well as for the investigation and administration of action to prevent further harassment. 

Key to the effectiveness of any investigation is the ability of the company’s IT department to access, review and copy internet use records, e-mail files, and any information that is transmitted, downloaded or stored on computers used in the workplace.

Virtual sexual harassment is no different than any other unwelcome verbal conduct of a sexual nature – if it is so severe or pervasive that it creates a hostile or offensive working environment, it may result in legal liability under State and Federal discrimination laws.  Technological advances have expanded the boundaries of the workplace and require updated policies and training on recognizing and preventing sexual harassment and electronic communications. 

Additionally, employers must have the technological capability to investigate misconduct in violation of those policies. A system of effective policies, trainings and IT practices is part of an effective defense for employers.

Attorneys in the Berliner Cohen Employment group will be pleased to provide further information regarding the matters discussed in this Alert:

Roberta S. Hayashi
roberta.hayashi@berliner.com

Christine Long
christine.long@berliner.com

Kara L. Arguello
kara.arguello@berliner.com

Kate Wilson
kate.wilson@berliner.com

Lisa L. Gorecki
lisa.gorecki@berliner.com

####

©2009 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.

Berliner Cohen’s experienced employment law attorneys advise and represent employers and managers on a full range of legal issues affecting the workplace, including harassment and discrimination, unfair competition and trade secrets, wrongful discharge, wage and hour issues, and labor disputes.  Berliner Cohen is one of the largest law firms in San Jose serving the business and regulatory needs of private business and public agencies.  For 40 years, the Firm has developed the special expertise required by a diverse client base consisting of nationally recognized business interests and a number of Silicon Valley’s largest national and multinational corporations, new ventures, leading real estate developers and brokerages, cutting-edge technology companies, healthcare and other service providers, banking and financial institutions, municipalities, public agencies and individuals.  Berliner Cohen also meets the growing demands of the San Joaquin Valley with its expanding office in Merced.

Articles

Employment Law Alert – Employers Should Take Steps Now to Prepare for Flu Season

by Kara L. Arguello
November 02, 2009

The H1N1 “swine flu” was a prominent topic in the media last year, and the U.S. Department of Health Services’ (“DHS”) Centers for Disease Control (“CDC”) anticipates that the virus will be more widely transmitted and affect more communities during the 2009-2010 flu season than in previous years.  Like the SARS epidemic before it, the H1N1 flu virus will pose interesting challenges for employers.

How the Swine Flu May Affect Your Business

Absenteeism

.  A pandemic flu outbreak could affect as much as 40% of your workforce, resulting in severe absenteeism.  Further, employees may miss work in order to care for sick family members, or to tend to children in the event that day care centers or schools close.

Commercial Disruption

.  Businesses may experience reduced sales and revenue and an inability to ship or receive supplies, parts or inventory in a timely manner as customers and suppliers also may be affected by a flu pandemic.

Employee Exposure

.  Equally problematic is the tendency for employees to come to work when they are sick and attempt to get through the day despite their illness.  They may be motivated by fear of losing their jobs, or believe that is what is expected of them.  Sick employees are not only less productive than normal, but they pose a risk of infection to other employees because the flu, and particularly the H1N1 virus, is highly contagious and easily transmitted.

Potential Solutions for Employers
Maintaining stability through the flu season will depend on two main qualities in your workforce:  flexibility and education.

Consider options to maximize work force availability, such as staggering shifts, calling on part-time workers to work additional hours, or utilizing temporary workers.  If non-exempt employees are asked to work overtime, then time and a half and double time must be paid as required by law.

Implement cross-training now to ensure that more than one individual in the workplace can perform the same function and job duties.  Employers may wish to train three or more employees to be able to sustain business-necessary functions and operations, and communicate that available employees may be needed to perform these functions if needed during an outbreak.

Swine Flu and the Law
While employers are required to provide a workplace free of known hazards to its employees, they also need to be mindful of employment laws when asking questions or directing employees to take certain actions.

Employers of 50 or more employees are required to provide qualified employees with 12 weeks of unpaid leave per year for their own serious health condition, or the serious health condition of a close relative, under the Family Medical Leave Act (“FMLA”).  Swine flu will likely qualify as a “serious health condition,” and employers should be open to permitting employees to take unpaid leave if they are suffering from swine flu or must stay home to care for an ill child, spouse or parent with swine flu.  While an employer can certainly require medical certification for an individual who seeks to take unpaid FMLA leave, employers should consult with legal counsel prior to attempting to require an employee to be tested for swine flu.  An employee who reports that he or she has the swine flu, however, may be asked to provide a doctor’s certification that he/she is not contagious before he/she may report back to work.  In that instance, as discussed below, employers should take care not to discriminate against the employee or permit any of his/her co-workers to discriminate against the employee because he/she has had the swine flu.

Employers have the obligation to provide notice to employees of their ability to claim State Disability benefits or Paid Family Leave (see http://www.edd.ca.gov).  Employees may want to take leave rather than coming to work because they may receive paid benefits if their absence is greater than five (5) days.

Individuals infected with swine flu also may be protected under disability discrimination laws.  The Americans with Disabilities Act (“ADA”) and the California Fair Employment and Housing Act (“FEHA”) forbid discrimination against employees who are disabled or regarded as disabled if they are otherwise qualified to perform the essential functions of their jobs with or without a reasonable accommodation.  These laws do not require an employer to permit a contagious employee to continue working (unless the employee is otherwise fit for duty and a reasonable accommodation, such as telecommuting, exists), but it may forbid employers from firing employees because of their illness, or from discriminating against employees who have recovered. 

Remember that employees’ medical information is highly confidential.  Employers should comply with the Health Information Portability Accountability Act (“HIPAA”) or California Medical Information Act (“CMIA”) by segregating all confidential medical information from the personnel file.  Further, employers should be careful about how medical information is documented, so as not to violate the Genetic Information Nondiscrimination Act (GINA).

Flu season presents many challenging questions for employers.  What should the employer do if an employee mentions that his or her child has been sent home from college due to an H1N1 outbreak in the dormitory?  What about an employee who learns, after making a cross-country trip to New York for business, that an individual on the plane contracted H1N1?  Can an employer require an employee to stay at home for mere exposure to the H1N1 virus?  Can the employer force the employee to take an unpaid leave of absence, or to use PTO or sick time?  Who has financial responsibility for a salesperson who cannot meet quota because he or she is required to stay out of the workplace due to contagion? The answers to these questions will be fact-driven and will vary from case to case.  Employers should contact legal counsel to work through these issues.

What can Employers Do to Avoid the Spread of Flu and Employment-Related Claims

Sick Leave

.  Develop a policy which does not penalize employees for taking time off when they or immediate family members are afflicted with influenza.  Employers who are governed by the FMLA must provide up to 12 weeks of unpaid leave for qualified employees.  Employees who are reluctant to use unpaid time may request to use PTO or sick time.

Encourage Reporting of Symptoms

.  Train your employees to immediately report to their supervisor if they are experiencing flu-like symptoms, and supervisors to promptly relay such reports to Human Resources.  Remind supervisors that any medical information received from employees is strictly confidential.  Medical information should never be kept in an employee’s personnel file.

Encourage Sick Employees to Stay at Home

.  Encourage employees who are experiencing flu-like symptoms such as a sore throat and fever, to see a medical professional.  If employees know they are contagious or have the flu, they should not come to work.  To a certain extent, however, employers will have to trust their employees not to come to the workplace if potentially contagious.

Communicate

.  Organized workplaces should communicate with unions regarding leave, pay, transportation, travel, childcare, absence and other human resources issues.  Every employer should identify a central team of people to serve as an information source for employees and customers.

Provide Personal Protective Equipment

.  If an employee reports to work with mild flu symptoms but refuses to go home, and believes that he/she can perform the essential functions of his or her job, one potential accommodation is to require the employee to wear a mask and/or gloves.  The employer should obtain a stockpile of surgical masks and non-latex gloves (many individuals are allergic to latex), and educate employees as to where they are located and when they should be worn.

Consider Increased Sanitation Practices in the Workplace

.  Speak to your janitorial professionals about increased regularity of cleaning and encourage employees to sanitize commonly-used environmental surfaces regularly.  Provide ample supplies of soap, tissue, hand sanitizer, no-touch trash cans, and cleaning supplies.

Telecommunication/Decreased Travel to Problem Areas

.  Consider increasing approved telecommunication where appropriate.  Nonessential travel to areas which the CDC identifies as having high illness transmission rates, such as Mexico, should be discontinued.

Encourage Flu Shots

.  Employees may be encouraged (but not required) to obtain a seasonal influenza vaccine.

Educate Employees about Hygiene and Safety Precautions

.  Employees should be advised about proper hand-washing techniques, when to remove and replace gloves, and when and how to sanitize commonly-used environmental surfaces (i.e., door knobs, desks, telephones, machinery).  Discourage employees from using each other’s telephones, computers, desks, offices, or other work tools or equipment.

Educate Employees about Symptoms

.  Send e-mail correspondence or post bulletins in common areas regarding symptoms of influenza, ways the employees can stay healthy at work, and how to prepare for flu season.  Educational posters and ideas for e-mail or bulletin communications are available for download at www.flu.gov.

Read Up on the Facts about Swine Flu

.  The United States Department of Labor’s Occupational Safety & Health Administration (“OSHA”) has recently issued updated guidelines on preparing workplaces for an influenza pandemic.  See www.osha.gov.

Attorneys in the Berliner Cohen Employment group will be pleased to provide further information regarding the matters discussed in this Alert:

Roberta S. Hayashi
roberta.hayashi@berliner.com

Christine Long
christine.long@berliner.com

Kara L. Arguello
kara.arguello@berliner.com

Kate Wilson
kate.wilson@berliner.com

Lisa L. Gorecki
lisa.gorecki@berliner.com

####

©2009 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.

Berliner Cohen’s experienced employment law attorneys advise and represent employers and managers on a full range of legal issues affecting the workplace, including harassment and discrimination, unfair competition and trade secrets, wrongful discharge, wage and hour issues, and labor disputes.  Berliner Cohen is one of the largest law firms in San Jose serving the business and regulatory needs of private business and public agencies.  For almost 40 years, the Firm has developed the special expertise required by a diverse client base consisting of some of Silicon Valley’s largest corporations, new ventures, leading real estate developers, cutting-edge software manufacturers, healthcare providers, mortgage banking companies, municipalities and public agencies.  Berliner Cohen also meets the growing demands of the San Joaquin Valley with its expanding office in Merced.

 

Articles

ULI TOD MarketPlace Explores Transit-Oriented Development Opportunities

by Nicholas Raby
September 24, 2009

With the passage of Senate Bill 375, the State of California took an important step toward reducing greenhouse gas emissions.  It provided incentives for regions and cities to link transportation and land use to help achieve California’s 2020 emission targets set forth in its 2006 Global Warming Solutions Act.  Transit-oriented development (TOD), with its convenient mix of housing, employment, services, entertainment, and transit, is an essential tool for carrying out Senate Bill 375.

Along with legislative mandates such as Senate Bill 375, the market demand for TOD projects has continued to increase, further validating the Urban Land Institute, San Francisco District Council's (ULI San Francisco's) annual TOD MarketPlace, which unites land use decision makers and the private sector in exploring transit-oriented development opportunities throughout the Bay Area. 

The program is conducted in two parts: a series of TOD opportunity tours in which ULI technical assistance panels review plans and evaluate selected cities, followed by a TOD MarketPlace conference where the panels present recommendations for these cities.  Cloverdale, California was one of five cities selected for the program in 2009. 

Nicholas Raby, Berliner Cohen attorney, recently served as the lead author for the City of Cloverdale, California component of ULI San Francisco’s 2009 TOD MarketPlace publication (see links below for the complete TOD MarketPlace publication and the expanded report on Cloverdale).

Urban Land Institute San Francisco – Bay Area 2009 TOD MarketPlace (complete report)

ULI San Francisco – 2009 TOD MarketPlace Station Area / Downtown Plan (Cloverdale, California)

####

Nicholas Raby primarily practices in the areas of commercial real estate and banking and finance.  His real estate practice involves both the structuring and documentation of a wide variety of real estate transactions (including acquisitions, dispositions, leases, exchanges and financings), as well as real estate related litigation and dispute resolution.  His banking and finance practice involves the representation of both creditors and debtors in a broad range of transactions (including the drafting of loan agreements and other debt and security instruments, loan restructures and workouts, debt collection, litigation and dispute resolution).

Mr. Raby is an active member of the San Francisco District Council of ULI.  He currently sits on the YLG Steering Committee as both the Vice-Chair of its Learn from the Best Sub-Committee and a co-chair of its South Bay Sub-Committee.  Outside of his involvement with the YLG, Mr. Raby also sits on the South Bay Programs Committee and actively contributes to the San Francisco District Council Programs Committee.

©2009 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Real Estate Group will be pleased to provide further information regarding the matters discussed in this article.

Articles

An Introduction to Advance Health Care Directives

by Alan D. Niebel
August 20, 2009

This article appears in the August 2009 issue of the Merced County Legal Professionals Association Newsletter, authored by Alan Niebel, Berliner Cohen attorney.

If you are unable to make health care decisions on your own, who will make those critical decisions on your behalf?  Are there medical procedures you do not wish to receive? Alternatively, are there medical procedures which you wish to be made available to you?

Several years ago, the Terri Schiavo case brought this issue into the national spotlight.  Regardless of your personal opinion of the court’s ruling and as heart wrenching as the case was for the family involved, the Schiavo case had at least one positive outcome – it generated a great deal of discussion among millions of Americans regarding a very serious and very personal issue.

If you are like the majority of Americans, you have likely thought about these questions (in one form or another) and have developed a general opinion on the matter.  Unfortunately, while the majority of people have an opinion as to what type of medical treatments they would like to receive in various circumstances, it is estimated that less than 25% of them have actually taken any steps to ensure their wishes are carried out.

Unless you have a written document memorializing your wishes, there is no way to ensure your wishes will be known, let alone followed.  In California, an Advance Health Care Directive (“AHCD”) is the legal document which allows you to memorialize your health care wishes.

What Is an AHCD? 
An AHCD is a legal document which allows you to: (1) appoint a person to make health care decisions on your behalf (an “agent”) and (2) provide personalized health care instructions. 

The generic term for the AHCD is a “living will.”  You may have also heard of the California Natural Death Act Declaration (“CNDAD”) or a Durable Power of Attorney for Health Care (“DPAHC”).  The CNDAD and DPAHC have been replaced by the AHCD.  The AHCD is a broader, more comprehensive document than either the CNDAD or the DPAHC.

Any California resident, who is at least eighteen years old, of sound mind, and acting of his or her own volition can execute an AHCD. 
The document may be effective immediately or it may become effective upon the happening of a certain event in the future (i.e., if you lose capacity).  The choice is up to you.

Who Can Be My agent?
Any adult may be nominated as your agent.  While you may name two or more “co-agents”, it is not advisable to do so.  The agent is often called on to act in very stressful situations and the likelihood of conflict rises exponentially when there is more than one agent involved. 
That being said, you may nominate one or more alternates to act in the event the primary agent is unable or unwilling to do so.  If possible, it is advisable to name at least one alternate agent.
 
Before you nominate an agent, be sure to discuss the position as well as your specific health care wishes with the person to ensure that he or she is willing to act on your behalf.  The position comes with a significant amount of responsibility and the person you intend to nominate as your agent may or may not be willing to act on your behalf.

With this in mind, you also want to be sure that the person you nominate is someone who lives in close proximity to you (i.e., you do not necessarily want to nominate your cousin who resides out of state to be your agent) and is someone who is strong enough to carry out your wishes.

Health Care Instructions
You may provide your agent with total discretion to make decisions on your behalf.  Alternatively, you may provide specific instructions as to the types of health care treatments you wish (or do not wish) to receive.

The instructions you provide should not be taken lightly.  The AHCD is a powerful document which has significant consequences.  Be sure to consider your choices carefully as well as the variety of situations in which they might apply.

General Thoughts
The AHCD is an extremely flexible document and provides you with a great deal of control over your health care choices.  You are free to revoke or amend your AHCD as long as you have the capacity to do so. 

Generic AHCD forms are publicly available (see Prob. C §4701).  However, an individualized AHCD may be obtained from your estate planning attorney, personal physician or other private sources.  It is advisable to discuss the AHCD with your personal physician and your estate planning attorney before executing it.  As with any legal document, do not execute the AHCD unless you understand what you are signing. 

Once executed, you should provide copies of the AHCD to your primary and alternate agents and discuss the document with your family members to ensure they are aware of your wishes.

Limitations
This article presents only a brief introduction to the AHCD as it relates to your individual health care decisions.  Other health care-related documents such as Do Not Resuscitate Orders and Physician Orders for Life Sustaining Treatment exist, but are well beyond the scope of this article. 

You must also be aware of the fact that the AHCD represents just one part of a comprehensive estate plan.  The powers granted under your AHCD are specifically limited to your health care concerns.  It does not address the multitude of personal and financial issues which also arise when an individual loses capacity.  Only a qualified estate planning attorney can provide you with a comprehensive estate plan.

Although this area of law is constantly evolving, planning for the needs of individuals continues to be the central focus of the law.  When incorporated into a comprehensive estate plan, the AHCD can provide a tremendous benefit not only to you, but to your family as well.

Summary
The AHCD is an excellent document for memorializing your health care wishes and appointing an agent to carry out those health care wishes in the event you are unable to do so.  While no one ever wants to be in the situation where an AHCD is needed, I can assure you that if the situation arises where you lose capacity, you (and your family) will be benefit if you have an AHCD in place.  This is truly a situation where a little bit of planning goes a long way.

####

Allan Niebel’s practice focuses on estate planning, probate and trust administration, asset transfers, tax and real property issues.  He comes to Berliner Cohen from a San Francisco law firm where he assisted clients in a broad range of estate planning and tax-related services.  He also served as a judicial extern to The Honorable Marshall Whitley, Superior Court of California Probate Court, and as a law clerk in the Tax Division of the United States Attorney’s Office in San Francisco.

©2009 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Estate Planning Group will be pleased to provide further information regarding the matters discussed in this article.

Articles

IRS Follows Up on Interim Due Diligence Guidance Required in Grantmaking to Other Nonprofits

by Brian L. Shetler
July 06, 2009

Private foundations and donor advised funds face excise taxes for grants made to other non-profit organizations that turn out to be merely supporting organizations for other charities.  The Pension Protection Act of 2006 subjects payments made by private foundations and donor advised funds to excise taxes under IRC sections 4942, 4945, and 4966, if grants are made to supporting organizations. 

After a period of interim guidance,  the IRS has issued a Revenue Procedure that provides some comfort to grantor organizations regarding their due-diligence efforts.  So that private foundations can assure themselves that grants are not subject to these taxes, the IRS has issued Revenue Procedure 2009-32, allowing for them to rely on documentation of an organization’s status.  The new Revenue Procedure supercedes the IRS’ earlier interim guidance in Notice 2006-109, 2006-2 C.B. 1121.

The Revenue Procedure states that, “In determining whether a public charity is classified under 509(a)(1), (2), or (3) of the Code, a private foundation or a sponsoring organization that maintains a donor advised fund, acting in good faith, may rely on either: (1) the grantee’s current IRS letter recognizing the grantee as exempt from federal income tax and indicating the grantee’s public charity classification under § 509(a)(1), (2), or (3); or (2) information from the BMF [IRS Business Master File].” 

The new Revenue Procedure continues to provide for allowance on third-party maintained BMF information meeting the IRS’ standards.

For the complete Revenue Procedure, click here.

####

Brian Shetler, Berliner Cohen trust and estate partner, focuses his practice on tax and estate administration issues.  Mr. Shetler works with corporate fiduciaries as well as families and individuals in establishing and carrying out plans to preserve and build legacies for generations.

©2009 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Estate Planning Group will be pleased to provide further information regarding the matters discussed in this article.

 

 

Articles

Environmental Law Alert – U.S. Supreme Court Narrows CERCLA “Arranger” Definition

by Ralph J. Swanson and Miles J. Dolinger
June 04, 2009

On May 4, 2009, the U.S. Supreme Court handed down an important decision under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), in the case of Burlington Northern and Santa Fe Railway Co. v. United States (Shell Oil Co.).

The Court held that Shell Oil had no liability for soil and groundwater contamination cleanup costs under CERCLA as an “arranger” for “disposal” of hazardous substances merely by selling a pesticide to a user with knowledge that the user was a careless operator that caused spills and leaks during transfer and storage.  In the second part of the opinion, the Supreme Court affirmed the District Court’s judgment apportioning liability for 9% of the total cleanup costs to the several railroad companies that owned a portion of the property on which the user operated.

Background
Brown & Bryant, Inc. (“B&B”) operated an agricultural chemical distribution business on 3.8 acres in Arvin, California (the “Property”).  In 1975, B&B expanded its operations onto an adjacent .9-acre parcel it leased from the Burlington Northern and Santa Fe Railway Co., and from Union Pacific Railroad Co. (the “Railroads”).  B&B stored and distributed various chemicals in drums and other containers both inside its warehouse and outside, one of which was a pesticide called D-D, which it purchased from Shell Oil Co. 

In the late 1970s, Shell, knowing that B&B (like its other distributors) occasionally spilled chemicals it was transporting, took several steps to encourage safe handling of its products, including inspection and certification requirements.  Nonetheless, B&B remained a “sloppy operator,” and over the course of 28 years, delivery spills, equipment failures, and rinsing of tanks and trucks allowed D-D and other chemicals to seep into the soil and groundwater.  In 1983, the California Department of Toxic Substances Control (“DTSC”) and the United States Environmental Protection Agency (“EPA”) began investigating the Property.

In 1989, B&B became insolvent and ceased all operations.  That same year, the Property was added to the National Priority List, authorizing government agencies to undertake cleanup efforts and seek reimbursement from potentially responsible parties.  By 1998, the government agencies spent over $8 million to clean up the Property and the Railroads spent over $3 million on the cleanup.  EPA and DTSC then brought a cost recovery action against the Railroads.  The Railroads responded with a contribution action against B&B and Shell, and the two cases were consolidated. 

The U.S. District Court for the Eastern District of California held that both the Railroads and Shell were potentially responsible parties (“PRPs”) under CERCLA—the Railroads because they were owners of a portion of the facility, and Shell because it had “arranged for” the disposal of hazardous substances through its sale and delivery of D-D.  Rather than imposing “joint and several” liability, however (meaning the entire amount of the liability could be borne by either or both of the parties), the District Court apportioned the Railroads’ liability as 9% of the total cleanup costs, and Shell’s liability as 6% of the total clean up costs.  The Ninth Circuit Court of Appeals affirmed the Railroad’s and Shell’s strict liability as PRPs, but reversed the apportionment part of the judgment and held them both jointly and severally liable.

Shell Not Liable As “Arranger” Under 42 U.S.C. § 9607(a)
On appeal to the U.S. Supreme Court, the first issue was whether Shell Oil Co. was liable as an “arranger for disposal” under 42 U.S.C. § 9607(a), given the fact that Shell Oil had some knowledge that its product was being used in a way that led to contamination.  The pertinent language in CERCLA imposes strict liability on “any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances….” 42 U.S.C. § 9607(a)(3).

The Court stated that liability should not attach beyond the limits of the statute itself, and interpreted the plain language of Section 9607(a)(3) to mean that an entity may qualify an as arranger “when it takes intentional steps to dispose of a hazardous substance.”  The Court rejected the government agencies’ argument that Shell’s continued participation in the delivery of products to B&B, with knowledge that spills and leaks would result, was sufficient to establish Shell’s intent to dispose of hazardous substances.  Instead it held that Shell had no liability at all.

District Court’s 9% Liability Apportionment to Railroads Found Reasonable
The second issue addressed by the Supreme Court was whether the record provided a reasonable basis for the District Court’s conclusion that the Railroads were liable for 9% of the harm caused by contamination on the Property.  The District Court arrived at 9% by multiplying the proportionate surface area of the Railroads’ portion of the Property (19%) by the proportionate time period B&B operated on the Railroads’ portion of the Property (45%), then by the amount that chemicals present on the Railroads’ portion contributed to overall site contamination (66%), and then multiplied again by 50% to account for calculation errors.

The Ninth Circuit reversed that ruling.  It held that the District Court erred because the data relied on were not specific enough, and because the percentages of land area, time of ownership, and types of hazardous products were not reliable measures of the harm cause by activities on the Railroads’ portion of the Property. 

The Supreme Court disagreed.  It approved an established line of lower court cases holding that CERLCA did not mandate joint and several liability in every case, and that, under common law principles, “apportionment is proper when there is a reasonable basis for determining the contribution of each cause to a single harm.”  The Court found the record “abundantly clear” that the primary pollution on the Property was contained in the southeastern portion most distant from the Railroads’ parcel, and that the contamination from the Railroads’ parcel contributed no more than 10% of total site contamination, some of which did not require any remediation at all.

What the Burlington Northern Case Means
This is an important decision for both manufacturers of hazardous substances and for government agencies seeking contributions and reimbursement for hazardous waste cleanups under CERCLA.  The Supreme Court has limited the definition of “arrangers” to those potentially responsible parties which “take intentional steps to dispose of a hazardous substance.”  No longer will a party be deemed to have “arranged for” disposal merely because it provided the chemicals to a distributor that is known to be spill-prone. Thus, in many future cases, manufacturers’ “deep pockets” will no longer be available to contribute to the remediation of contaminated sites where other PRPs are either insolvent or non-existent.

The opinion does not make new law with regard to the apportionment/joint and several liability issue, but it may send a message to the federal courts of appeal that district court determinations of what are reasonable bases for apportionment should be left alone, even if doing so effectively discharges the only private source for cleanup cost recovery.

As a result, governmental environmental agencies will have less PRP funds available to clean up contaminated sites, they will have less incentive to cleanup sites where significant cost recovery is doubtful, and consequentially, more and more contaminated sites may never get cleaned up at all.

For further information, you are welcome to contact Ralph J. Swanson, ralph.swanson@berliner.com, or Miles J. Dolinger, miles.dolinger@berliner.com, or by telephone, 408.286.5800.

©2009 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Environmental Group will be pleased to provide further information regarding the matters discussed in this article.       

Articles

Employment Law Alert – Employers Can Require “Tip Pools” - Risk Litigation

by Frank R. Ubhaus and Roberta S. Hayashi
April 16, 2009

Under the California Labor Code, tips that are left for the employee, whether in cash or as an added item on a credit card charge, are considered to be the property of the employee.  Unlike Federal law, the California employer cannot use any portion of the tip income to offset the minimum wage obligations of the employer.  The employer has an obligation to pay over the full amount of the tips received to the employees.

Over the last few years, California courts made it clear that a restaurant can impose a mandatory “tip pool” amongst its employees.  However, the employer or a manager/supervisor who acts as the agent of the employer – such as the restaurant manager or a supervisor with hiring/firing authority—cannot share in those tips. 

Appellate Cases
Four California appellate court cases issued since January 1, 2009 address mandatory “tip pools” in interesting and somewhat inconsistent ways.  [Lu v. Hawaiian Garden Casino, Inc., 170 Cal.App.4th 466 (1/22/09); Budrow v. Dave & Buster’s of California, 171 Cal.App.4th 875 (3/2/09); Grodensky v. Artichoke Joe’s Casino, 1st Dist. Court of Appeals, A119035 (3/11/09); Etheridge v. Reins International California, Inc., B205005, 2d Dist. Court of Appeals (3/27/09)] 

These cases held that mandatory tip pools are permitted in non-restaurant work environments (specifically casinos); that an employee who contributed to the mandatory tip pool can recover from the employer amounts that were improperly distributed from the tip pool to managers/supervisors as well as attorneys’ fees and court costs for bringing the claim; and that employees who are not involved in the direct chain of service (such as bartenders or kitchen staff) can still receive a share of the mandatory tip pool.

These cases are of particular interest to Berliner Cohen partners, Frank Ubhaus, who heads the firm’s litigation department, and Roberta Hayashi, who leads the firm’s employment law practice.  They have been defending a class-action filed in 2004 to challenge the mandatory tip pool practices of a firm client. 

California Supreme Court Review
“These cases are just the beginning of the debate”, said Ubhaus.  “The California Supreme Court has been invited to review a couple of these cases, and can be expected to note the inconsistency between two of the cases on the subject of whether an employee can sue directly under the Labor Code or needs to take a circuitous path through California’s Unfair Competition laws.  Employers should be particularly concerned about the suggestion by [a dissenting jurist] that courts should consider whether the distribution of tips is ‘fair”, particularly where the distribution includes employees not directly involved in contact with the patron – such as kitchen staff, or employees who are independently tipped – such as floorpersons in a casino.”

The Message: Potential Lawsuit
If there is one consistent message, which emerges from these cases, it is that employers, who mandate tip pooling amongst their service employees, can be sued and found liable for amounts improperly distributed to managers/supervisors even if the employer itself did not directly benefit from the tip pool. 

Because the liability will include the potential recovery of attorneys’ fees, these cases will continue to be filed, even if the amount of the “improper” distribution is small.

For further information, you are welcome to contact Frank R. Ubhaus, .(JavaScript must be enabled to view this email address), or Roberta S. Hayashi, .(JavaScript must be enabled to view this email address), or by telephone, 408.286.5800.

©2009 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Employment and Litigation Groups will be pleased to provide further information regarding the matters discussed in this article. 

Articles

Employment Law Alert – IRS 409A’s Impact on Severance or Deferred Comp

by Eric J. Berquist
January 29, 2009

Any employer who is including a severance provision in an offer letter to a prospective new hire, offering post-termination payments to a departing employee, or implementing any deferred compensation arrangement or severance plan or policy needs to carefully consider the impact of Section 409A of the Internal Revenue Code. Congress enacted Section 409A in 2004 as part of the American Jobs Creation Act.

Since then, proposed and now final treasury regulations regarding 409A, along with additional notices and other related guidance issued, form a complex set of legal rules that impose serious financial consequences for a misstep.

The consequences of failing to meet the requirements of Section 409A are costly.  Income deferred under the arrangement must be included in the employee’s income currently, eliminating the potential tax benefits of deferring the compensation in the first place.  Section 409A also imposes an additional federal penalty of 20% of the tax due on the amount of deferred compensation upon a determination that the arrangement is not in compliance with Section 409A.  Other penalties and interest could also be imposed.  Further, state income tax authorities may impose penalties for failing to comply with Section 409A.  For example, California imposes its own 20% penalty for failing to comply. The employer may risk liability for failure to properly report income paid to the employee, or for improper deductions.

Section 409A applies to a broad range of deferred compensation arrangements, such as severance plans, even if those compensation arrangements were created prior to the statute’s effective date of January 1, 2005.  Before making payments pursuant to such older compensation arrangements, employers should consider the impact of Section 409A.  More importantly, employers must ensure, however, that compensation arrangements drafted in the future comply with Section 409A. Section 409A generally applies to all nonqualified deferred compensation plans.

The term “nonqualified deferred compensation plan” includes any plan that provides for the deferral of compensation.  A plan provides for the deferral of compensation if, under the terms of the plan and the relevant facts and circumstances, the service provider (employee) has a legally binding right during a taxable year to compensation that, pursuant to the terms of the plan or arrangement, is or may be payable to (or on behalf of) the employee in a later taxable year.  Such compensation is treated as deferred compensation for purposes of Section 409A.

Because the definition of a “nonqualified deferred compensation agreement” is written broadly, the following arrangements are potentially subject to Section 409A:

• Employment agreements, including offer letters
• Severance and/or change-in-control arrangements
• Stock, stock option, and stock appreciation rights (SAR) plans or arrangements
• Bonus or commission plans
• Reimbursement arrangements
• Split-dollar life insurance policies
• Tax gross-up payments
• Deferred Compensation Plans or Agreements

Where an arrangement is subject to Section 409A, it must satisfy three requirements:

The first requires that the compensation deferred under the arrangement is not distributed earlier than six different possible events.  The six events are: a participant’s separation from service, a participant’s disability, a participant’s death, a specified time or pursuant to a fixed schedule, a change in ownership or control of the service recipient, or the occurrence of an unforeseeable emergency.

Secondly, although several exceptions exist under the Treasury Regulations relating to Section 409A, generally a plan may not allow for the acceleration of the time or schedule in which benefits are paid under the plan.

Finally, the plan must comply with various restrictions on elections provided under the plan, such as for the initial election to defer compensation under the plan, as well as for later elections to change the time or form of distribution under the plan.

Amongst the several exceptions to the Section 409A requirements, employers have attempted to
utilize three in particular in drafting severance provisions:

• the “short term” deferral exception
• the “2x2” exception
• the “reimbursement exception”
 

Careful analysis and drafting of the severance provision is essential to ensure the exception will apply. 

For example, the “short term” deferral exception may permit severance compensation to be paid by March 15th of the year after the year in which the termination occurs. However, this is not a simple rule that can be applied in a vacuum to every situation, and a publicly traded company may run afoul of the “specified employee” delay requirement which mandates a delay of six months following separation for severance payments to the top officers whose annual compensation is greater than a particular dollar threshold.

For further information, please contact the following Berliner Cohen attorneys at 408.286.5800:
    Jerold A. Reiton, gerold.reiton@berliner.com
    Aaron Valenti, aaron.valenti@berliner.com
    Eric Berquist, eric.berquist@berliner.com   
    Roberta Hayashi, roberta.hayashi@berliner.com

####

Berliner Cohen is one of the largest law firms in San Jose serving the business and regulatory needs of private business and public agencies.  For almost 40 years, the Firm has developed its full-service, special expertise required by a diverse client base consisting of some of Silicon Valley’s largest corporations, new ventures, leading real estate developers, cutting-edge software manufacturers, healthcare providers, mortgage banking companies, municipalities and public agencies.  Berliner Cohen also meets the growing demands of the San Joaquin Valley with its expanding office in Merced.

© 2009 Berliner Cohen.  This Berliner Cohen Employment Law Alert is only a general overview of how Section 409A may apply to employee severance provisions and the consequences of failing to consider its requirements.  When drafting arrangements that may involve issues of compliance with Section 409A, employers should seek professional assistance with respect to their specific concerns.  This Alert is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your receipt of the materials. 

Articles

Berliner Cohen Attorneys Author “Volumes”…

November 03, 2008

Berliner Cohen attorneys frequently author chapters, sections or articles, which appear in legal and other industry publications:

Linda A. Callon, Partner
League of California Cities, Contributing Editor, “The California Municipal Law Handbook”

Robert L. Chortek, Partner
15 Pacific Legal Journal, 301, Comment: “Impeaching the Accused with Prior Convictions: Does Proposition 8 Put Beagle in the Doghouse?”

Andrew L. Faber, Partner
California Environmental Law and Land Use Practice (Matthew-Bender), “Exactions,” Chapter 64
California Real Estate Forms and Practice (Matthew-Bender), “Zoning, Building, and Environmental Entitlements and Permits,” chapter 30B
Silicon Valley Business Ink, “Seen Any Red-Legged Frogs Lately?”

Roberta S. Hayashi, Partner
Drafting Corporate Agreements 2009 (Practising Law Institute), “Employment Agreements: Offer Letters to Severance Agreements,” Chapter 2

Articles

Employment Law Alert – Upcoming ADAAA Changes & Potential Implications to California Employers

by Kate Wilson
October 24, 2008

In the early 1990’s, Congress enacted the Americans with Disabilities Act (“ADA”) which prohibits discrimination against persons with physical or mental disabilities in employment, housing and public accommodations.  At the same time, the California legislature amended the Fair Employment and Housing Act (“FEHA”) to expand the scope of its protections against discrimination, harassment and retaliation to disabled persons.  The Federal and California State statutes have significant differences in what constitutes a “disability” and the scope of an employer’s obligations.  These differences became more apparent in the wake of contrasting Federal and California court decisions.  In 2008, Congress amended the Americans with Disabilities Act.  While in many respects the amendments will not alter the existing obligations of California employers, there are a few areas in which the new Federal legislation will impact employers in this state.

Changes Resulting from the ADAAA

Definition of Disability
The ADA defines a “disability” as a physical or mental impairment that substantially limits a major life activity of an individual.  Several U.S. Supreme Court cases have narrowly construed this definition and have interpreted “substantially a limit” to mean “prevents or severely restricts.”  While the ADAAA does not alter the statutory definition of disability, the ADAAA rejects the Supreme Court’s interpretation of “substantially limits.”  The ADAAA states that the definition of disability should be construed in favor of broad coverage of individuals.  The ADAAA also makes clear that Congress intended to apply a less demanding standard than that applied in the courts.  Finally, the ADAAA tasks the Equal Employment Opportunity Commissions (the “EEOC”) with promulgating new regulations regarding the definition of a “disability,” consistent with the ADAAA.

Mitigating Measures
The Supreme Court narrowed the group of people covered by the ADA when it held that mitigating measures, such as medication or devices, are to be considered in determining whether or not a person is substantially limited in a major life activity.  The ADAAA provides that the ameliorative effects of mitigating measures are not to be considered in determining whether and individual has an impairment that substantially limits a major life activity.  However, the ADAAA carves out an exception for “ordinary eyeglasses or contact lenses” that are “intended to fully correct visual acuity or eliminate refractive error, which shall be considered in determining whether an impairment substantially limits a major life activity. 

Major Life Activity
The Supreme Court had previously defined a “major life activity” under the ADA as an activity that is “of central importance to most people’s daily lives.”  The ADAAA sets forth a non-exhaustive list of major life activities, including caring for one’s self, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, working, and major bodily functions (including but not limited to functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions). 

The ADAAA also clarifies that an impairment need only substantially limit one major life activity.  Further, under the ADAAA an impairment that is episodic or in remission is a disability if the impairment would substantially limit a major life activity when the impairment is active. 

Regarded As
Under the ADA and previous cases law, an individual was “regarded as” disabled if the individual could show that the employer perceived the individual as having a substantially limiting impairment.  The ADAAA drastically expands this definition.  The ADAAA states that an individual is “regarded as” disabled if he or she “has been subjected to an action that is prohibited under this Act because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.”  The ADAAA does note, however, the “regarded as” definition does not apply to impairments that are transitory and minor.  The ADAAA defines transitory as an actual or expected duration of 6 months or less. 

In addition, the ADAAA provides a safe haven for employers by stating that an employer is not required to provide a reasonable accommodation to an individual who is covered only under the “regarded as” prong of the Act.  Therefore, the newly expanded “regarded as” definition will likely be of most significance in cases where an adverse employment action has actually occurred.

What Is the Overall Anticipated Effect of the ADAAA for Employers

The overall effect of the ADAAA will be that, under federal law, more employees will be deemed to be “disabled” and will qualify for reasonable accommodations and protections from alleged discrimination.  This will likely increase the number of disability discrimination suits filed under federal law.  In addition, it is likely that the focus of ADA litigation will move from whether or not an individual meets the definition of “disabled” toward the questions surrounding the employer’s actions and the motivation for such actions.

What Does the ADAAA Mean for California Employers

Employers in California with five or more employees are subject to the California Fair Employment and Housing Act (“FEHA”).  FEHA has historically provided broader protections to California workers than the ADA.  Under the FEHA, disability is defined as an impairment that limits a major life activity.  Unlike the ADA and ADAAA, no substantial limitation is required.  According to California Government Code § 12926, a mental or psychological disorder or condition or physical disability limits a major life activity if it makes the achievement of the major life activity difficult and “limits” are to be determined without regard to mitigating measures.  Further, major life activities are to be construed broadly and include physical, mental and social activities and working.  Therefore, the ADAAA ‘s expanded definitions of disability and major life activity, and the admonition that mitigating factors shall not be considered in whether or not an impairment rises to a disability, should not enlarge the obligations of California employers.  California employers should however, monitor the promulgation of regulations and court decisions under the new ADAAA.  Should such regulations and decisions further expand the protections afforded to individuals, employers should explore whether those regulations and decisions have broadened the protections beyond those required by the FEHA.

It appears likely that the ADAAA may provide broader protections for individuals than the FEHA in “regarded as” cases.  As discussed above, under the ADAAA, an individual is “regarded as” disabled if the individual “has been subjected to an action that is prohibited under this Act because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.”  Under the FEHA, an individual is “regarded as” disabled if that individual is perceived to be limited in a major life activity.  Thus, the ADAAA could prove to require greater protections for individuals because the impairment does not have to limit a major life activity. However, as noted above and in contrast to California case law , under the ADAAA employers need not provide reasonable accommodations to employees who are only covered under the “regarded as” prong. 

To avoid an increase in the number of “regarded as” claims, employers should consider means to isolate managers who make the decisions about hiring, firing, promotions or compensation changes, from medical, health, workers’ compensation, family and medical leave, and other similar personal information about employees to avoid the implication that an employee was subjected to a prohibited action because of a perceived physical or mental impairment.  This may be problematic for smaller employers, especially those who do not have distinct managers that handle human resources and benefits issues.  All decision makers should be trained about their responsibility to base employment decisions on legitimate factors other than a perception of mental or physical impairment. 

What Should Employers Do

Employers should review their current policies and practices to ensure that they comply with the ADAAA by January 1, 2009.  California employers should train managers and employment action decision makers about the expanded coverage for individuals who are “regarded as” disabled, even if the existence of a disability is unproven.  Employers should expect that regulations and case law interpreting the ADAAA will be promulgated, and be aware that forthcoming regulations and case law may further expand the protections afforded to impaired individuals.  Any updates should be communicated to employees, and workplace policies and practices revised accordingly.

Attorneys in the Berliner Cohen Employment group will be pleased to provide further information regarding the matters discussed in this Alert:

Roberta S. Hayashi
roberta.hayashi@berliner.com

Christine Long
christine.long@berliner.com

Kara L. Arguello
kara.arguello@berliner.com

Kate Wilson
kate.wilson@berliner.com

####

Berliner Cohen’s experienced employment law attorneys advise and represent employers and managers on a full range of legal issues affecting the workplace, including harassment and discrimination, unfair competition and trade secrets, wrongful discharge, wage and hour issues, and labor disputes.  Berliner Cohen is one of the largest law firms in San Jose serving the business and regulatory needs of private business and public agencies.  For almost 40 years, the Firm has developed the special expertise required by a diverse client base consisting of some of Silicon Valley’s largest corporations, new ventures, leading real estate developers, cutting-edge software manufacturers, healthcare providers, mortgage banking companies, municipalities and public agencies.  Berliner Cohen also meets the growing demands of the San Joaquin Valley with its expanding office in Merced.

©2008 Berliner Cohen.  This Alert is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials. 

Articles

Employment Law Alert – CA Supreme Court Strikes Down Non-Competition Agreements

by Kara L. Arguello
September 16, 2008

In August 2008, the California Supreme Court handed down its long-awaited decision in Edwards v. Arthur Andersen LLP.  The Court departed from prior decisions in the federal courts by determining that a provision in an employment agreement that even “partially” or “narrowly” restricts an employee from serving customers or competing with a former employer was invalid and prohibited by California law.  The Court also stated that an agreement which requires an employee to waive “any and all rights,” but which does not expressly carve out an employee’s indemnity rights, is acceptable because the indemnity rights are nonwaivable statutory claims.  Click here for Court decision.

Edwards was a tax manager at Arthur Andersen.  Upon accepting employment with Andersen, Edwards signed a non-competition agreement, which prohibited him from working for or soliciting certain Andersen clients for limited periods following his termination.  In March 2002, the United States government indicted Andersen in connection with its investigation into Enron Corporation.  In April 2002, Andersen began selling off its practice groups to various entities, who would hire on many of Andersen’s employees. 

HSBC USA, Inc. offered Edwards employment.  Before hiring any of Andersen’s employees, HSBC required the employees to execute a “Termination of Non-Compete Agreement.”  This agreement required employees to, among other things, voluntarily resign from Andersen, and release Andersen from “any and all” claims.  In exchange, Andersen would accept Edwards’ resignation, agree to his employment with HSBC, and release Edwards from the non-competition agreement.  Edwards refused to sign the HSBC Termination of Non-Compete Agreement.  In response, Andersen terminated Edwards’ employment and withheld severance benefits, and HSBC withdrew its offer of employment.

Edwards sued Andersen, HSBC and others for intentional interference with prospective economic advantage and anticompetitive business practices in violation of the California Business & Professions Code.  Specifically, Edwards claimed that the Andersen non-competition agreement violated B&P Code §16000, which voids any contract that restrains a person from engaging in a lawful profession, trade or business.  Further, Edwards alleged that HSBC’s Termination of Non-Compete Agreement was invalid because it contained a clause requiring him to waive “any and all” claims against Andersen, and that clause constituted a waiver of Edwards’ indemnity rights in violation of California Labor Code sections 2802 and 2804.

The Andersen Non-Competition Agreement Was Invalid

Under the plain meaning of B&P Code §16000, an employer cannot restrain a former employee from engaging in his or her profession, trade or business except under certain limited circumstances.  The Court rejected Andersen’s argument that only contracts that totally prohibit an employee from engaging in his or her profession are illegal, and that an employer should be permitted to place some limitation on an employee’s ability to practice his or her vocation, as long as it is reasonable – otherwise known as the “narrow restraint” exception to B&P Code §16000.  In Edwards, the Court rejected the “narrow restraint” exception and stated a zero-tolerance policy on any sort of restraint on a former employee’s ability to pursue his livelihood. 

The Release of Claims Was Valid

Andersen had made Edwards’ new employment with HSBC contingent on his agreement to waive “any and all” claims he had or might have against Andersen.  Labor Code §2802(a) provides for an employee’s right to indemnity.  Edwards asserted that the release language infringed his statutorily nonwaivable right to indemnification.  The Court found that the waiver did not include indemnity rights.  Andersen contended that it did not carve out indemnity rights from the release because it was aware that under Labor Code 2804, such rights are statutorily nonwaivable.  Such an exception was therefore legally unnecessary.  On the other hand, Edwards argued that Andersen should have narrowed the release by drafting it to waive “any and all claims except as otherwise prohibited by law.”  The Court disagreed, and stated that no release of claims can waive an employee’s indemnity rights, and the courts will treat such releases as expressly incorporating the law that those rights cannot be waived.  Therefore, voiding all existing releases, which waive “any and all” claims, would be inappropriate.

What Edwards v. Arthur Andersen Means for Employers

The California Supreme Court has clearly stated that non-competition agreements are invalid unless they fall under specific statutory exceptions.  These include agreements to protect trade secrets, or in connection with the sale or dissolution of corporations (§16601) or limited liability corporations (§16602.5).  Employers should review the language of contracts such as employment agreements, non-solicitation agreements, and non-disclosure agreements to be sure they comply with the law.

Attorneys in the Berliner Cohen Employment group will be pleased to provide further information regarding the matters discussed in this Alert:

Roberta S. Hayashi
roberta.hayashi@berliner.com

Christine Long
christine.long@berliner.com

Kara L. Arguello
kara.arguello@berliner.com

Kate Wilson
kate.wilson@berliner.com

####

Berliner Cohen’s experienced employment and labor trial attorneys advise and represent employers of all sizes on a full range of legal issues affecting the workplace, including harassment and discrimination, unfair competition and trade secrets, wrongful discharge, wage and hour issues, and labor disputes.  Berliner Cohen is one of the largest law firms in San Jose serving the business and regulatory needs of private business and public agencies.  For almost 40 years, the Firm has developed the special expertise required by a diverse client base consisting of some of Silicon Valley’s largest corporations, new ventures, leading real estate developers, cutting-edge software manufacturers, healthcare providers, mortgage banking companies, municipalities and public agencies.  Berliner Cohen also meets the growing demands of the San Joaquin Valley with its expanding office in Merced.

©2008 Berliner Cohen.  This Alert is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.

Articles

Employment Law Alert – Supreme Court Grants Review of Brinker Case

by Kara L. Arguello
August 29, 2008

On August 29, 2008, the California Supreme Court granted review of the Fourth District Court of Appeals’ decision in Brinker Restaurant Corporation v. Superior Court of San Diego (Hohnbaum).  The prior appellate court in the Brinker case held that employers have some flexibility in scheduling meal periods and rest breaks, and that while employers must provide meal periods, they are not necessarily liable if employees do not actually take them.  This holding was a departure from prior California law on the topic of meal and rest breaks.  By granting a hearing to review this decision, the California Supreme Court has rendered it invalid as legal authority and employers should no longer rely on the appellate court’s decision.  Berliner Cohen will keep its clients apprised of new developments in Brinker.

Articles

Employment Law Alert – California Court Cuts Employers a “Break”

by Kara L. Arguello
July 25, 2008

PLEASE NOTE: On August 29, 2008, the California Supreme Court granted a hearing to review the Fourth District Court of Appeal’s decision in the Brinker Restaurant Corporation v. Superior Court of San Diego (Hohnbaum) case discussed in the July 25, 2008 Employment Alert below.  Therefore, the Brinker decision may not be relied upon as legal authority and employers should not rely on this case as an accurate statement of the law.  This case will be worth watching as employers’ look for guidance with regard to their obligations under California’s meal and rest break statutes.

_______________________________________

On July 22, 2008, the Fourth District Court of Appeal published its decision in Brinker Restaurant Corporation v. Superior Court of San Diego (Hohnbaum).  The court reached several conclusions favorable to employers, particularly those in the restaurant and hotel industries, on the issue of meal periods and rest breaks.  The court held that employers have some flexibility in scheduling meal periods and rest breaks, and that while employers must provide meal periods, they are not necessarily liable if the employees do not actually take them.  For reasons that are particularly beneficial to employers of multiple work-site establishments, the court denied class certification.

Brinker operates 137 restaurants in California, including Chili’s Grill and Bar, Romano’s Macaroni Grill, and Maggiano’s Little Italy.  In 2006, Brinker was sued by a purported class of employees for failing to provide meal periods and rest breaks under California Labor Code section 227.6.

The contentions of the parties in this case focused on key issues in California’s meal and rest break law. Plaintiffs claimed that Brinker used an improper system of “early lunching” – requiring employees to take their first meal period shortly after their shifts began, then requiring employees to work an additional five to nine hours without a second meal break.  Plaintiffs also claimed they were required to work while off the clock during meal periods, and that Brinker management “shaved” or altered employee time cards.  Plaintiffs further argued that employers have an affirmative duty to ensure that employees receive meal periods, and that Brinker could not meet this obligation simply by making meal periods available.  Brinker argued that if an employee worked more than five hours but less than ten, Brinker was only required to give that employee one meal period at some time during the shift, and that Brinker was not required to give employees one meal period every five hours, as Plaintiffs were suggesting.

Scheduling Meal Periods

Labor Code section 512(a) plainly provides that a California employer has a duty to make a first 30-minute meal period available to an hourly employee who is permitted to work more than 5 hours per day unless, (1) the total work period per day is 6 hours or less and (2) both the employer and the employee agree by mutual consent that the employee waives the meal period.  Section 512(a) also states that an employer must make a second 30-minute meal period available to an hourly employee who worked more than 10 hours per day, unless (1) the total hours worked per day is 12 or less, and (2) the first meal period was not waived.

Plaintiffs contended that, where hourly employees take their first meal period approximately one hour into their shift, they are entitled to a second meal period five hours after they returned to work from the first meal period.  The court disagreed, and found that employees are entitled to a first meal period for every work period of more than five hours per day, not a meal period for every five hours worked.  Further, the wage order contains no restriction on the timing of meal periods, so Brinker was not violating the law by requiring “early lunching” by some of its employees.

Rest Periods

Following IWC Wage Order 5-2001, which applies to the public housekeeping industry, and the applicable Regulation 11050(12)(A), the court found that the plain language of the wage order, which requires an employer to permit a 10-minute rest period “per four hours of time worked or major fraction thereof,” does not mean that a rest period must be given every 3.5 hours.  Plaintiffs asserted that a rest break was required when employees work any time over the midpoint of each 4-hour block of time.  The Brinker court rejected this interpretation.  The appropriate number of breaks is based on total hours worked daily.  It is only when an employee is scheduled for a shift longer than 3.5 hours, but less than 4 hours, that he or she is entitled to take a rest break before the 4-hour mark.

The Brinker court also found that Regulation 11050(12)(A) does not require employers to authorize and permit a first rest break before the first scheduled meal period.  The regulation is silent as to the timing of the first rest break vis-à-vis the first scheduled meal period.  The regulation only states that rest breaks, “in so far as is practicable, shall be in the middle of each work period.”  The court noted that the language of the regulation is clearly intended to afford the employer some discretion not to have rest periods in the middle of a work period if, because of the nature of the work or the circumstances of a particular employee – such as a restaurant server whose busiest time is likely at mid-shift – it is not “practicable.”

Contrast to Prior Law

Brinker differs from prior cases involving meal periods and rest breaks.  In Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, the court found that an employer’s obligation to provide meal breaks was only satisfied if employers ensured that workers are actually relieved of all duties during those times.  The obligation was not satisfied by an employer’s assumption that employees took their meal periods.  However, in Cicairos the employees were truck drivers, and the employers had computerized systems tracking each driver’s speed, starts and stops, and time spent driving.  In short, the employer knew that the drivers were driving while eating, and did not take steps to address the situation.  The Brinker court noted that employers cannot police thousands of employees working multiple shifts and force them to take meal breaks.  An employer’s obligation is to make a meal period available to its employees, and not to dissuade, deter, or discourage the employees from taking their meal periods, but not to ensure that employees take them.

In Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, the California Supreme Court found the employer liable for one hour of pay at the employee’s regular rate per each meal period and rest break during which Murphy, a retail store manager, was not relieved of his duties.  The focus of that case was whether the premiums constituted wages (which carry a 3-year statute of limitations), or penalties (which have a one-year statute of limitations).  The court found that the premiums were wages and Murphy was entitled to seek three years’ worth of premiums.  Brinker focused on whether the employer has a duty to ensure that its employees take their meal breaks, and stated that while the employer has an affirmative duty to ensure that a meal period is made available, and that the employee is relieved of his or her duties during that time, the employer should not have to pay additional premiums if an employee voluntarily chose not to take the meal period or to take a shortened one.

The court in Sav-On Drug Stores, Inc. v. Superior Court of Los Angeles County (Rocher) (2003) 113 Cal.App.4th 1152, held that issues such as employee classification and unpaid overtime could be properly asserted as class actions because the question was one of common or general interest, and issues of the employer’s policies and practices and operational standardization were likely to predominate a class proceeding over any individualized calculation of actual overtime hours owed.  In contrast, the Brinker court denied class certification, stating that the individualized inquiry that would be required by the nature of the plaintiffs’ claims and the circumstances of the parties were not amenable to class treatment.  Brinker had explained that there was no uniform meal or rest break policy because it was different for servers, hosts and bartenders than for cooks and dishwashers, and the policy differed for lunch and dinner shifts, and between restaurants and locations.  The court said these circumstances would result in hundreds of “mini-trials,” and the claims were not suitable for class determination.

Brinker is good news for California employers who have been struggling with how to force an employee to take meal periods and rest breaks, or whose operations are such that requiring a mid-shift meal period or rest break is very difficult or impossible.  It is not likely to be the last word. Because of the contrast between this case and other prior California cases discussed above, it is likely that the California Supreme Court will be requested to hear this case.

Attorneys in the Berliner Cohen Employment group will be pleased to provide further information regarding the matters discussed in this Alert:

Roberta S. Hayashi
roberta.hayashi@berliner.com

Christine Long
christine.long@berliner.com

Kara L. Arguello
kara.arguello@berliner.com

Kate Wilson
kate.wilson@berliner.com

####

Berliner Cohen’s experienced employment and labor trial attorneys advise and represent employers of all sizes on a full range of legal issues affecting the workplace, including harassment and discrimination, unfair competition and trade secrets, wrongful discharge, wage and hour issues, and labor disputes.  Berliner Cohen is one of the largest law firms in San Jose serving the business and regulatory needs of private business and public agencies.  For almost 40 years, the Firm has developed the special expertise required by a diverse client base consisting of some of Silicon Valley’s largest corporations, new ventures, leading real estate developers, cutting-edge software manufacturers, healthcare providers, mortgage banking companies, municipalities and public agencies.  Berliner Cohen also meets the growing demands of the San Joaquin Valley with its expanding office in Merced.

©2008 Berliner Cohen.  This Alert is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials. 

Articles

Contractor or Employee? – Legal Pitfalls in Worker Classification

by Christine H. Long and Aaron M. Valenti
May 15, 2008

What is the Difference Between an Employee and an Independent Contractor?

Employee - an individual who performs services for you, and who is subject to your control regarding the method and manner in which the work will be performed

Independent Contractor - an individual who performs services for you, but you control only the result of the work

Difference in Benefits

The biggest difference many employers notice is the benefits they must provide. 

	Employee	Independent Contractor
Payroll Taxes	Yes	No
Minimum Wage	Yes	No
Overtime	Yes	No
Meal Periods/Rest Breaks	Yes	No
Reimbursement of Expenses	Yes	No
Worker’s Compensation	Yes	No
Leave of Absence	Maybe	No
Unemployment Insurance	Yes	No
Disability Insurance	Yes	No
Social Security	Yes	No

 

Who Regulates the Classification of Workers?

• State and Federal agencies both regulate the determination of independent contractor status
• Internal Revenue Service (IRS) – regulates income and employment taxes on the federal level
• Employment Development Department (EDD) – regulates employment related taxes for California
• Division of Labor Standards Enforcement (DLSE) – oversees whether the wage, hour and workers compensation laws apply
• Division of Worker Compensation (DWC)
• ContractorsStateLicensing Board (CSLB)

Where Does the Government Start in Determining the Status of a Worker?

DLSE starts with the presumption that the worker is an employee. Labor Code Section 3357.  This is a rebuttable presumption however, and the actual determination of whether a worker is an employee or independent contractor depends upon a number of factors, all of which must be considered, and none of which is controlling by itself.

There is a rebuttable presumption that where a worker performs services that require a license pursuant to Business and Professions Code Section 7000, et seq., or performs services for a person who is required to obtain such a license, the worker is an employee and not an independent contractor. Labor Code Section 2750.5

Employees for Wage Withholding Purposes

The term “employee” includes every individual performing services if the relationship between him and the person for whom he performs services is the legal relationship of employer and employee.  Generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished.  

Employees for FICA Purposes

Officers of corporations, except for officers who perform no services (or only minor services) and receive no compensation

Example: Pariani v. Commissioner - Doctor who performed medical services for a professional association he had organized, and of which he was the sole shareholder and president, was an employee with respect to his duties as president and the medical services he provided.

Common law employees - look to common law rules for determining employer-employee relationship

Example: Ewens & Miller, Inc. v. Commissioner - Tax Court looked to several factors, such as degree of control, investment in facilities, and permanency of relationship, to determine that certain workers affiliated with a bakery were employees.

*Agent-Drivers or Commissioner Drivers engaged in distributing meat, vegetable, or bakery products, beverages (other than milk), or laundry or dry-cleaning services

*Full-time life insurance salespersons

*Home workers performing work at direction of designated person on materials or goods furnished by such person

Example: garment workers and people who address envelopes

*Traveling or city salespersons engaged upon a full-time basis in solicitation (on behalf of his/her principal) of orders from wholesalers, retailers, contractors, hotels and restaurants for merchandise for resale or supplies for use in the business.

Example: Solicitation of orders (on a full-time basis) from retail pharmacies for X Drug Co.

*Additional requirements for statutory employees: (1) worker must perform substantially all of the services himself/herself; (2) no substantial investment in facilities; and (3) services are part of a continuing relationship

Any individual who performs services that are included under an agreement entered into pursuant to Section 218 of the Social Security Act

Example: State and local government employees

Employees for FUTA Purposes

The term “employee” is defined similar to the way it is defined for FICA purposes, except the definition does not include life insurance salespersons, home workers, or individuals who perform services that are included under an agreement entered into pursuant to Section 218 of the Social Security Act.

Statutory Non-Employees/Independent Contractors

Qualified Real Estate Agents - (1) licensed real estate agent; (2) substantially all compensation related to sales or other output rather than the number of hours worked; and (3) written contract stating that individual is not an employee for federal tax purposes

Direct Sellers - (1) engaged in trade or business of selling (or soliciting the sale of) consumer products to a consumer (or a buyer for resale) in a location other than a permanent retail establishment; (2) substantially all compensation related to sales or other output rather than the number of hours worked; and (3) written contract stating that individual is not an employee for federal tax purposes

Example: A vacuum cleaner salesperson who buys merchandise on credit from a wholesale distributor, solicits sales from customer lists supplied by distributor, and conducts sales in customers’ homes is a direct seller.

What If the Employee Agrees or Asks to be an Independent Contractor?  Can We Have an Agreement as to Their Status?

No.  An individual can not agree to do something that is unlawful.  The biggest mistake employers make is saying the employee preferred being an independent contractor, or worse yet, on salary.

Types of Tests Used by Federal and State Agencies and California Courts:

• Behavioral Control
• Financial Control
• Type of relationship between the parties

Behavioral Control

Under this test, it will be determined whether the worker is an employee if the employer controls the means of production.  In evaluating the means of production, the Court and Government will evaluate whether instructions are provided, the degree of instruction provided, the nature of the work, the degree of education required for the job and the particular trade or job.

Yak v. Brussels.  The Court held that plaintiff’s worker status must be based on control of work and not an employment contract.  It based its ruling on the principle that “the terms of a contract cannot override either issues of control in an employment relationship to determine worker status or the legal requirements under ERISA.”

Waggener v. County of Los Angeles.  It was held that jurors are employees within the meaning of the Workers' Compensation Act, and the county has the responsibility to insure against injuries that a juror may sustain while the juror is providing services to the county.

Financial Control

This test includes whether there is a significant investment by the worker versus the employer, whether there are un-reimbursed expenses, whether the services are available to the public, the method of payment and the opportunity to the worker for profit or loss.

Relationship Test

The court and government will look at the agreement between the parties, the type of work being performed and the nature of the relationship.

Vizcaino v. Microsoft.  Microsoft’s “permatemp” workers were common law employees written agreements acknowledging that they were independent contractors.  The Court looked at the control of the work performed.

Baystate Affiliated Staffing v. Herner.  The Court ignored a written independent contractor agreement and held that the workers were employees, therefore entitled to receive overtime pay as required by the FLSA, and the staffing agencies (and their business clients) were liable for violating the Fair Labor Standards Act (FLSA).  

MORAL – An Independent Contractor Agreement will not save you if you treat the worker as an employee.  

What If You Aren’t Sure?

Form SS-8 – Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding

The form may be filed by either the business or the worker.

The IRS will review the facts and circumstances and officially determine the worker’s status.

Be aware that it can take up to six months to get a determination.

Workers Properly Classified as Employees

Employer must withhold (and pay over) income tax and employee’s portion of FICA taxes and is responsible for paying unemployment taxes.  Employer must also issue a W-2 to the employee.

Trust Fund Recovery Penalty/100% Penalty- Any person responsible to collect, account for and pay over tax who willfully fails to perform his responsibility is liable for a penalty equal to the total amount of tax evaded. 

Penalty only applies to trust fund portion of employment taxes (i.e., employee portion).

Amount of liability is equal to the amount of delinquent trust fund taxes and not in addition to those taxes.

Penalty is not limited to a single person.

No negligence or fraud penalty is imposed.

Workers Properly Classified as Independent Contractors

For workers that are properly classified as independent contractors, no withholding of taxes is required, although the business must issue a Form 1099-MISC with respect to payments made to the independent contractors (in the amount of $600 or more), and report the payments to the IRS and the EDD (for California income).

Workers Misclassified as Independent Contractors - Liability

Associated Taxes for Employers (on employee’s portion of taxes) 

May be liable for the Entire Tax

Reduced Penalty under IRC Section 3509 for Income and FICA Taxes

For income taxes, liability is limited to 1.5% of the wages paid to an employee (increased to 3.0% if no 1099-MISC is provided to employee and IRS)

For FICA taxes, liability is limited to 20% of the normal FICA tax (6.2% Social Security tax and 1.45% Medicare tax for a total of 7.65%).  Liability is increased to 40% if employer does not provide 1099-MISC to employee and IRS.

No relief if (1) employer intentionally disregards requirement to deduct and withhold income and FICA taxes; (2) employer withholds for income tax purposes, but not FICA tax purposes; or (3) statutory employee (for FICA purposes)

IRS Forms 4669 and 4670-Employer relieved of tax liability (but not penalties) if show that employee reported the wages and paid the tax.

Employer’s Share of FICA Taxes-Employer responsible for 100% of his/her share of FICA taxes (7.65%).  6.2% Social Security tax is computed on first $102,000 of wages, for a maximum tax of $6,324.  1.45% Medicare tax is computed on employee’s total wages.

Federal Unemployment Tax-For 2008, tax is 6.2% of the first $7,000 paid to each employee.  This may be reduced through credits for contributions paid into state unemployment funds.

Penalty for Failure to Deposit Income, Social Security or Medicare Tax on Time- Penalty ranges from 2% to 10% of the applicable underpayment (A delay of more than 15 days will result in a 10% penalty).

Interest on Underpayments- Interest accumulates at the federal short-term rate plus three percentage points, from the last date allowed for payment until paid.

Interest on Penalties- Interest accumulates at the federal short-term rate plus three percentage points, beginning 21 calendar days after the date of the IRS notice (10 business days if amount equals or exceeds $100,000).

State Liability

Estrada v. Federal Express.  In a trifurcated trial, the court found the drivers were employees within the meaning of Labor Code Section 2802 because FedEx controlled their manner of dress down to the color of their socks, the style of their hair and their day to day activities.  The total damages assessed in California are believed to be approximately $11 million.

Relief Requirements Under Section 530

Under the "Safe Harbor" rule of Section 530 of the Revenue Act of 1978, an individual will not be reclassified as a common-law employee for employment tax purposes provided the business meets the following requirements:

1.    The business did not treat the worker as an employee at any time.
2. The business filed a 1099 form for the worker on time.
3. The business has not treated workers in substantially similar situations as employees.
4. The business has a "reasonable basis " for treating the worker as an independent contractor.

Tips to Avoid Misclassification Problems

• Review independent contractor agreements
• Make sure independent contractors have the right to control the manner and means of accomplishing their work
• Ensure that employees’ labels or titles are consistent with their actual work experience
• Require temporary employees or independent works to apply for each new project or assignment
• Review your policies and procedures and make sure there are truly differences between employees and independent contractors

Articles

Employment Law Alert – California Supreme Court’s Decision on Retaliation

by Kara L. Arguello
April 02, 2008

In March, the California Supreme Court, in a 4-3 split decision, held that non-employer individuals cannot be personally liable for retaliation under the Fair Employment and Housing Act (FEHA).  This case reversed a trend among the California appellate courts, which allowed individual managers and supervisors to be sued for their decisions to discipline, demote or terminate employees who made complaints of discrimination.  See Jones v. The Lodge at Torrey Pines Partnership (08 C.D.O.S. 2511).  Click here for the Court’s opinion.

The Court relied on its reasoning in Reno v. Baird (1998) 18 Cal.4th 640, which barred claims against supervisors for discrimination, to hold that supervisors cannot be held individually liable for retaliation.  In Jones v. The Lodge at Torrey Pines Partnership, the jury returned a verdict for the plaintiff on a claim of sexual orientation discrimination in violation of FEHA against the employer, and against the employer and supervisor for retaliation.  The jury awarded compensatory damages of almost $1.4 million against the employer and $155,000 against the supervisor.  The trial court entered judgment on the verdict, but then granted judgment, notwithstanding the verdict as to both defendants.  The California Court of Appeals for the Fourth District reinstated the original judgment on the verdict. 

The California Supreme Court granted petition for review limited to the question of individual liability for retaliation, and reinstated the trial court judgment for the individual supervisor.  The majority opinion was by Justice Chin with two dissenting opinions by Justice Werdegar and Justice Moreno. 

While this case is welcomed news for individual supervisors who have been sued for retaliation, employers should note that there is continuing risk of liability against the company for claims of retaliation.  While supervisors cannot be held personally liable if an employment action such as hiring, demotion, denial of a raise or termination is found to be the result of a discriminatory or retaliatory motive, the employer on whose behalf such action was taken, will still be liable.  Other cases in California have recently held that tangible employment actions such as demotions or denial of pay raises, which fall short of termination, can still result in claims of retaliation.  In addition, an individual supervisor or manager may still be sued and can be found personally liable for discriminatory harassment.

Attorneys in the Berliner Cohen Employment group will be pleased to provide further information regarding the matters discussed in this Alert:

Roberta S. Hayashi
roberta.hayashi@berliner.com

Christine Long
christine.long@berliner.com

Kara L. Arguello
kara.arguello@berliner.com

Kate Wilson
kate.wilson@berliner.com

####

Berliner Cohen’s experienced employment trial attorneys advise and represent employers of all sizes on a full range of legal issues affecting the workplace, including harassment and discrimination, unfair competition and trade secrets, wrongful discharge, wage and hour issues, and labor disputes.  Berliner Cohen is one of the largest law firms in San Jose serving the business and regulatory needs of private business and public agencies.  For 40 years, the Firm has developed the special expertise required by a diverse client base consisting of some of Silicon Valley’s largest corporations, new ventures, leading real estate developers, cutting-edge software manufacturers, healthcare providers, mortgage banking companies, municipalities and public agencies.  Berliner Cohen also meets the growing demands of the San Joaquin Valley with its expanding office in Merced.

©2008 Berliner Cohen.  This Alert is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.

 

Articles

Avoiding Family Conflicts – Discussing Estate Plans with Beneficiaries

by James P. Cashman
May 01, 2006

Individuals rarely contemplate the potential for family conflicts upon their death. They sincerely believe their children will cooperate, and that there will be “no problems when they die.” The reality, however, is that most families will become involved in some type of personal conflict upon the passing of one or both parents. When Mom or Dad dies, the family dynamics often drastically change. Therefore, it is imperative that all clients fully address these issues. Below are just a few common conflicts that can arise in the administration of an estate.

Personal Effects with Emotional Value
Perhaps the most common family conflicts occur over the distribution of personal effects. Typically, conflicts over jewelry, clocks, pianos, china, and other heirlooms have little to do with monetary value, and much to do with sentimental value. Children may become engaged in bitter fighting over an item that reminds them of a parent, or that “Mom said I was going to get.”

Because conflicts over personal effects can spur serious animosity among family members, clients should consider giving instructions to the executor/trustee. These instructions should detail what items will be distributed to whom. While this can be accomplished with estate planning documents, amending with changes of mind can become expensive. An alternative, particularly with items lacking monetary value, is to sign a letter of instruction addressed to the executor/trustee indicating the client’s wishes regarding gifts of tangible personal property. Executors/trustees are compelled to respect these expressions of wishes. With such a letter, clients can control the disposition of personal effects upon their deaths without having to change their estate planning documents.

Successor Trustee Selections
In estate plans involving the creation of a trust, the named successor trustee generally faces an array of extremely difficult tasks. If the named successor trustee is an adult child taking over an illiquid estate (because of estate taxes or other reasons), he or she may have to sell assets that not all of his or her siblings agree should be sold. Sometimes the successor trustee will come to be viewed by the other heirs as having too much control over the assets, or as being too slow or unfair in distributing them. When naming a child as a successor trustee, the testator should consider whether or not that child would be able to withstand the pressure that inevitably comes from his or her siblings. Distrust bred amongst siblings because of trust administration questions can devastate families.

Where a second marriage is involved, making a stepparent the successor trustee may have disastrous consequences, since the issue of prior marriages will likely arise. Such an appointment is fraught with peril. Even in the very best relationships, the stepparent is usually in the position to expect income from such a trust, while the children are interested in growth. Because of this, clients should consider appointing a co-trustee who will act as a neutral party in decisions regarding distribution and investment. An even better option is the appointment of a neutral third party to act as the sole trustee.

Discuss How and Why with Beneficiaries
These are just a few examples of conflicts that can arise in an estate. In every case, clients should consider discussing how the estate plan is set up, and why it was done that way with all beneficiaries. The chance for later conflict is minimized when clients have talked candidly with their beneficiaries about their estate plans.

####

James Cashman, Berliner Cohen partner, represents a wide variety of families and individuals in estate planning matters, including wills, living trusts, insurance trusts, complex trusts, educational trusts, charitable trusts, family partnerships, foundations and probate and estate administration matters.  For more information, please contact Mr. Cashman at james.cashman@berliner.com.

©2008 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Estate Planning Group will be pleased to provide further information regarding the matters discussed in this article.

Articles

Dancing in a Minefield: The California Wage and Hour Law Tango

by Roberta S. Hayashi
April 01, 2006

The adage “Everything old becomes new again” has particular meaning both for employers and for the lawyers who sue or represent them.

California’s wage and hour laws were promulgated during the 1930s to implement such New Deal concepts as minimum wage, overtime and “one day’s rest in seven.” Over the ensuing decades, the California legislature expanded the scope of wage and hour laws to cover payroll practices, vacation pay, and meal and rest breaks. No detail—from what must be listed on a paycheck stub to whether an employee may be paid final wages by direct deposit—was too small to escape legislative attention.

In the twenty-first century, wage and hour laws underlie a legal industry. For example, in December 2005, an Oakland jury awarded a $172 million verdict in a class action against Wal-Mart for violating meal and rest break laws. In January 2006, a class action was filed against IBM for alleged failure to pay overtime to tens of thousands of computer installers and maintenance workers who were wrongly characterized as “exempt.”

While lawsuits against business giants such as Wal-Mart and IBM capture headlines, every California employer must recognize that the wage and hour laws are a minefield, through which the employer dances daily. Even the smallest misstep can result in an administrative claim, a Labor Commissioner audit, civil litigation, or criminal charges. In 2004, the legislature passed the Labor Code Private Attorneys General Act, which permits any aggrieved employee to sue for violation of almost any provision of the Labor Code, increases the amount of civil penalties, and provides for a right to recover attorneys’ fees, thereby encouraging litigation.

Some of the hazards in the minefield are created by simple, fundamental decisions such as:

1.  Is the employee exempt or non-exempt from minimum wage and overtime law? The employer’s burden to prove exempt status rests on the amount of the monthly salary as well as the predominant nature of the work performed. Non-exempt employees are entitled to earn minimum wage and overtime for all time worked in excess of eight hours in a workday or forty hours in the workweek. An employee may be entitled to claim unpaid overtime going back over four years. The employer could also be liable for interest, penalties and attorneys’ fees.

2.  Is the employee paid appropriately? California law requires that employees be paid all amounts earned, without reduction, within certain defined time spans. Legal disputes frequently explode over whether bonuses or commissions were earned and timely paid.

3.  Is the employer providing non-exempt employees with a meal-break of not less than half an hour after five hours worked?  The employer has the burden of maintaining records which show that a meal break was provided. The failure to provide meal breaks results in a one hour penalty for each missed meal break.

4.  Is the employer properly accruing and paying out vacation time? Paid vacation is not required by law, but an employer who chooses to offer this benefit must comply with a host of rules, ranging from prohibition of “use it or lose it” policies to formulae for calculating permissible caps on accrual.

5.  Are improper deductions being taken from the employee’s paycheck?  Other than required taxes, any deduction must be authorized by the employee in writing. Deductions from salary for absences of less than a full week caused by the employer, jury duty, witness duty, or absences of less than one full day, may jeopardize the status of an exempt employee.

6.  Was a terminated employee paid all amounts owed for services, including accrued but unused vacation, immediately upon an involuntary termination or within 72 hours of a resignation?  Failure to properly calculate and pay final wages can result in “waiting time” penalties of up to thirty days of wages.

This is a sampling of the wage and hour landmines that litter the employment relationship from hiring to termination. The prudent employer will have policies and practices to avoid a misstep.

####

Roberta S. Hayashi, Berliner Cohen partner, has over twenty-five years experience representing Silicon Valley employers in employment and business litigation. She has trial experience in wrongful termination, discrimination, and misappropriation of trade secrets and proprietary information actions in both state and federal court. Ms. Hayashi has been named one of the “Top 50 Women Litigators” in California by The Daily Journal.  For more information, please contact Ms. Hayashi at roberta.hayashi@berliner.com.

©2008 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Employment Group will be pleased to provide further information regarding the matters discussed in this article.

Articles

“Keeping the Faith: Fiduciary Duties – Forming LLCs to Hold Real Proprerty”

by Brian L. Shetler
November 01, 2005

Trustees of irrevocable trusts have the unenviable task of deciding how to invest for the benefit of others under the California Uniform Prudent Investor Act (UPIA). If they make the right decisions, they receive no added benefits—they are just fulfilling their duties.  However, if they make the wrong decisions, they have to account to the beneficiaries. 

Because of this, many trustees understandably favor liquidating assets that involve hands-on management, such as real property.  Often real estate is sold immediately upon a trust becoming irrevocable, and the proceeds are invested in stocks and bonds. After all, it is hard to fault a trustee who invests in a diversified portfolio of stocks and bonds. In addition, liquidating real property reduces the risk of environmental liability for the trust and eliminates the risk of losses to a trust from trips, slips, and falls by eggshell plaintiffs trying to become the newest beneficiaries of the trust assets. Claims relating to a small piece of real property in a trust can swallow not only the equity in the real property, but also the other assets of the trust. 

However, under the UPIA, selling all the real estate is not always the right decision. Trustees must weigh the factors specified in the UPIA under the particular circumstances that they face. The key factors in this consideration are laid out in Probate Code § 16047(c)(1)-(8), including the ambiguous catchall eighth factor: “an asset’s special relationship or special value, if any, to the purposes of the trust or to one or more of the beneficiaries.” Even if all other factors favor liquidating property in a trust, this eighth factor can be an overriding one. 

Whatever the circumstances, however, any trustees who are determining whether to retain real property in an irrevocable trust should consider placing that real property in an entity. Forming a limited partnership with a limited liability company as the general partner (both wholly owned by the trust) or simply forming a single-member limited liability company to hold title will minimize the risks associated with any real estate holding.  Each property would be in its own separate entity with its own separate insurance. 

If a claim arising out of the property is made following the transfer of the property to an entity, then claimants will have a hard time proving anything but the assets of the entity alone are liable for such claims. The result is that the decision to retain the real property as an asset of the trust would no longer expose so much of the trust assets to claims arising out of the real property.

Generally, there are no adverse tax consequences from forming an entity wholly owned by the trust. For income tax purposes, a single-member limited liability company is disregarded, and a limited partnership is pass-through. For property tax purposes, there are no reassessments; although, the trust’s distribution provisions should be considered to avoid transfers of more than 50 percent of an entity.

In addition, even if the trustees decide to sell the real property, they may want to first place the property in an entity. Trusts with banks as trustees do not need to pay the newly imposed 3 percent FTB withholding on the sale of real property, but trusts with individuals as trustees do not have the same exemption.

Therefore, for the sake of the trust (and the trustees), consider holding any real property in a limited liability entity.

####

Brian Shetler, Berliner Cohen partner, focuses his practice on trusts and estates, tax and other estate administration issues. He works with corporate fiduciaries as well as families and individuals in establishing and carrying out plans to preserve and build legacies for generations.  For more information, please contact Brian Shetler at brian.shetler@berliner.com.

©2008 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Probate & Trust Administration Group will be pleased to provide further information regarding the matters discussed in this article.

Articles

Identification of the Entrepreneur—The ABCs of Entrepreneurship

by Joseph E. Dworak
August 01, 2005

America is rich with examples of those who created fortunes seemingly out of nothing and in so doing left indelible footprints on the history of American business. Many times we simply refer to these people as entrepreneurs. Often the term entrepreneur is used without a clear understanding of its meaning and without a single definition. Everyone seems to think they know what it means, but when asked, the explanations vary. Maybe no single definition of the unique traits of the entrepreneur can be formulated. Yet, the entrepreneur has been and continues to be a catalyst for change, not only in American business, but business throughout the world.

Many times these people are referred to as “doers” as opposed to “managers” because many entrepreneurs undertake the risks shunned by others in exchange for the potential benefits associated with a successful enterprise. Such a characterization may be understandable because the word “entrepreneur” finds its roots in the French word “entrenpredre” which, roughly translated, means “to undertake.” Yet, simply referring to an entrepreneur as a doer or even a risk taker, while convenient, fails to identify let alone appreciate the nuances unique to an entrepreneur. By the time the entrepreneur has his fame and fortune, the achievements have already been well documented and, other than maybe a few anecdotal stories, few are then in a position to recount what was it that led to the success of the entrepreneur. At that point, society often looks only to the achievements of the entrepreneur rather than the unique traits which helped the entrepreneur realize those achievements. Rather than looking at what these entrepreneurs have done, maybe we should examine what is the make-up of the entrepreneur.

Lawyers, have a unique position to witness, often first hand, the entrepreneur in action. They often aid in the birth and assist during the adolescence of the entrepreneur’s business and, in some cases, even beyond. Our law firm, Berliner Cohen, over the years has witnessed many remarkable successes of these remarkable people, and has come to understand the characteristics unique to them. We are headquartered in San Jose, California, and are part of the Silicon Valley legal community.

The client base of Berliner Cohen, unusual for the Silicon Valley legal community, has allowed us to work with many of these entrepreneurs in a variety of industries. We focus on real estate transactional work, land use work, general business litigation, complex tax, high level estate planning work and advice to privately-held companies. We see many companies that were started by visionaries which are not necessarily related to technology. Many of the business successes have rivaled, if not surpassed, the successes of those in the technology community. A review of the annual list produced by Fortune Magazine of the wealthiest people in the world mentions several from Northern California not directly related to technology, but whose wealth flows from the value of Northern California commercial real estate. The success stories of these individuals who accumulate these vast amounts of wealth are as unparalleled and interesting as any technology billionaire. Seldom do these entrepreneurs inherit their money or count on family money to start their endeavors. To use an often-coined phrase, the wealth that they create they create the hard way, they earn it by starting, developing and prospering businesses. How they do it is not often well documented. Why they do it is even less well known. Many times, they just cannot help themselves and, while the money is a component, often the drive to business success has less to do with the financial reward and more to do with the excitement of the “deal.”

I have had the opportunity to represent and meet some of them. Over the years, I have often asked what their keys to success are. The answers vary, but every answer provides a little insight. The typical folklore is that entrepreneurs are doers not thinkers, are born not made, are inventors not managers, and are risk takers not calculators. Our experience has shown that, while each of these terms may aptly describe some component of what it takes to be an entrepreneur, there is much more. More often than not, these stereotypes fail on closer scrutiny to adequately capture the essence of the entrepreneur. For the most part, these people are dedicated, competent and hardworking business people. Hence, to dispel some of the preconceived notions about who entrepreneurs are and why they succeed, this article seeks to provide the ABC’s of entrepreneurship and some insight into the traits of a successful entrepreneur.

A:  Adaption, Not Just Action
Entrepreneurs do act and oftentimes, decisively. Yet, to characterize them as simply action-oriented is remiss. Most successful entrepreneurs think, plan, and then move. Their trail is more defined by deliberate movements predicated on a defined risk analysis, rather than a whim. Their success rests on their ability to adapt to a situation and learn from their mistakes. Seldom do they simply plough blindly ahead. More often than not those who lack this trait and who forge ahead blindly find their failures littering the bankruptcy courts.

B:  Bold, But Not Brazen
Almost without exception, each entrepreneur I have met has had a daring spirit. This spirit manifests itself fearlessly against the risk of failure and a confidence in their own abilities and success. Yet, they are seldom foolish or foolhardy or act impetuously or with imprudence. They weigh the factors and make an informed decision when to act. They act out of thought, not instinct. This is not to say that they always succeed. Sometimes they do not. Failure, when it does occur, often results from economic considerations beyond their control, rather than from the paralyzation of inaction.

C:  Created, Not Conceived
There is no blueprint for an entrepreneur. Entrepreneurs know no cultural, racial, ethnic, educational, religious or other social boundary. None of their success is predicated upon who their parents were, but rather on their own ambition, expectations and goals. What drives them and the traits that often give them their success include initiative, persistence and creativity.

D:  Dedicated, But Not Daring
The accomplishments of the most successful entrepreneurs oftentimes are truly astonishing. Some, in a relatively short period of time, create vast amounts of wealth and their success is often thought to be merely the product of daring endeavors, if not reckless action. Yet, many of the most successful entrepreneurs are much less daring than they are dedicated. Rather than impetuously moving quickly in the face of unknown risk, these people act methodically. They have a vision, they act consistent with the vision, and they are dedicated to achieving their vision. This dedication helps them endure the inevitable lows of the business cycle, which they ultimately must transcend to achieve the success they ultimately obtain.

E:  Energetic, But Not Excitable
Almost without exception, those who work for the entrepreneur look to the person almost as an evangelist of the entrepreneur’s business cause. Often the entrepreneur is seen rallying the employees to accomplish their goals and the entrepreneur may often pit the business of the entrepreneur almost on a warlike footing with other competitors. Yet in this role, the entrepreneur is not roused to excitability, but rather is the embodiment of the energy that fuels the business enterprise. The energy of the entrepreneur, not acts of excitement, create long-term success.

F:  Failure, But Not By Foible
Not all entrepreneurs succeed. Those who do succeed have previously failed. Often more can be learned from failure than success. The most successful entrepreneurs understand that often failure should be embraced and sometimes an immediate success is viewed with suspicion. Failure allows the entrepreneur to create a knowledge base which, in turn, allows the entrepreneur to focus on how to create success out of failure. This failure is seldom predicated upon foible because to continue to endure with a fundamental weakness in the business plan or business model without adaptation would border on lunacy. Entrepreneurs, while sometimes eccentric, are hardly crazy.

G:  Greatness, But Not Necessarily By Genetics
The traits of a successful entrepreneur are often unique to them. These traits seem to develop more from experience and environment than the genetic code of the entrepreneur. Many, if not most, come from humble beginnings. Their children or grandchildren may have a “silver spoon,” but their parents usually did not. Each seems to be unique differently, and often it is only success that successful entrepreneurs share in common.

H:  Sometimes Heady But Seldom Haughty
Whether formally educated or not, successful entrepreneurs are almost universally shrewd and intelligent and often seemingly act rashly. They universally respect intelligence in others and recognize that their own success often depends upon hiring employees smarter than themselves. Although never short on self confidence, seldom is the entrepreneur blatantly and disdainfully proud.

I:  Innovative, But Not Necessarily the Inventor
Entrepreneurs often do not create the breakthrough idea, but more often are those who can exploit someone else’s good idea. Bill Gates, while adept in software, did not invent or even make the software that Microsoft first sold to IBM. The computer had been around for years before Steve Jobs decided it was time for a personal computer. The McDonald brothers were serving up hamburgers when Ray Kroc was still selling milkshake machines. Entrepreneurship transcends invention. Entrepreneurs innovate inventions.

J:  Judgmental, But Not Jackleg
Entrepreneurs are decision makers. When a decision is made, it’s often a product of deliberation, but is made quickly and decisively. Sometimes the decisions may be considered judgmental and oftentimes they are, because entrepreneurs have a certain vision and focus and quickly dispense with anything that detracts from that vision and maybe rightfully so. In making these decisions, they are never jackleg.

K:  Knowledgable, But Not Know-It-Alls
Entrepreneurs have a vision and know where they want to go and learn, sometimes by trial and error, how to get there. The best of entrepreneurs do not rely solely on themselves. Rather, they develop around them a competent team to assist them and the best of the entrepreneurs always listen to those who provide advice to them, regardless whether the advice is accepted. Those entrepreneurs who embrace the “my way or the highway” attitude may sometimes succeed, but certainly not always.

L:  Less Luck and More Logistics
Many who read about the extraordinary successes of entrepreneurs often come away thinking they were simply lucky or at the right place at the right time. No doubt good fortune is helpful. However, good fortune or luck is more often the product of preparedness. The prepared entrepreneurs are those who are able to quickly recognize and act on opportunities when opportunity is apparent. Their success is not predicated upon chance, but rather on calculation.

M: More Management and Less Magic
No doubt the stellar success of some entrepreneurs almost seems magical. Yet, as we all know, magic is not the product of some supernatural quality or power, but rather the magician’s management of the audience’s expectations and views. What may appear to be a magical act is a product of years of hard work and dedication. Entrepreneurs are no different. What magic they display has a solid foundation in years of hard work.

N:  A Nucleus, Not a Nullifier
Entrepreneurs at their very best are able to forge coalitions and assemble groups of people who share the vision of the entrepreneur and are committed to the success of the enterprise. Under these circumstances, the successful entrepreneur becomes the nucleus of the endeavor by relying on the support and dedication of the employees of the enterprise. The successful entrepreneur enhances the contributions of the employees rather than nullifying those contributions.

O:  Optimistic, But Not Necessarily Opinionated
The glass is never half empty for the successful entrepreneur. Optimism abounds. Some entrepreneurs run their enterprises with a religious fervor. They believe in what they are doing and in the righteousness of their plan of action. Sometimes, however, this optimism can be misconstrued as being opinionated. No doubt successful entrepreneurs have opinions, but are driven more by vision than opinion. Rather, what is viewed as someone being opinionated is merely someone who is extraordinarily optimistic.

Q:  Quizzical and No Quitter
Each entrepreneur has a certain amount of eccentricity. Some may be considered quite odd. Yet, all successful entrepreneurs – whatever their unique personality characteristics – simply do not quit. They are undaunted by challenges, and view failures and defeats as mere learning experiences.

R:  Resilient, Not Resistant
The hallmark of any successful entrepreneur is being able to adapt. Nothing in business is static. Change occurs and often occurs quickly. For this reason, even though the entrepreneur may have a particular vision, the successful ones will not be resistant to change and will modify their course to keep the vision in focus. They are resilient and adapt to the circumstances as presented.

S:  Steadfast, Not Necessarily Stubborn
All successful entrepreneurs are firm in their belief in themselves and their vision. Often their determination is unyielding. Yet, seldom is the entrepreneur unreasonably or perversely unyielding or mulish. The best of the entrepreneurs recognize when to persist and when to adapt.

T:  Typically Tyrannical, But Not Truculent
Every successful entrepreneur is and must be a leader. Some of the most successful ones are able to rally support amongst their employees to face any business challenge. As a consequence, many times the successful entrepreneur is demanding, if not overbearing. No doubt entrepreneurs dominate. Many people see this as tyrannical. While it is often true that the entrepreneur believes that he is absolute in his cause, and unrestrained by conventional wisdom, seldom is the entrepreneur vitriolic or deadly and destructive to his vision in carrying out the business plan.

U:  Upstart, But Not Urbane
Entrepreneurs start businesses. Action is their calling. The ones who are the most successful often have meteoric rises in wealth and power and sometimes are viewed as upstarts because of their bold actions. More mature businesses often have an urbane quality to them because they are run by institutional managers and not often by visionaries. Urbanity is not one of the traits that fuels the success of the entrepreneur. Contentment and complacency are curses to the entrepreneur.

V:  Vitality, But Not Vitriolic
Entrepreneurs, by their very nature, are energetic, often with dynamic personalities. Their zest for their enterprise has a vitality which is sometimes mistakenly identified as caustic.

W:  Sometimes Wayward, But Never Whimsical
Entrepreneurs chart their own path. They display no reticence in following their own vision or inclinations. Many are viewed to be somewhat unpredictable. Some around them find it difficult to see the path being charted by the entrepreneur. However, this unpredictability seldom is whimsical. It is often part of a planned course of action, well thought out and implemented with deliberation.

X:  Xenophile Rather Than Xenophobe
Many entrepreneurs are iconoclastic and often are attracted to the unusual rather than the mundane. Seldom is the entrepreneur conventional in style or manner.

Y:  A Yielder, Not a Yammerer
Those entrepreneurs who fail often do so because they do not re-evaluate their decisions. Adjustment and adaptation are traits that serve the successful entrepreneur well. Hence, when faced with a conflicting view, the successful entrepreneur will evaluate the information, analyze it and, if the information provides a better approach than that first conceived by the entrepreneur, the entrepreneur will yield to that differing view and direct his enterprise to success. The unsuccessful business person will continue to utter complaints and whine about its predicament and stay steadfast in its original plans.

Z:  Zenithal, Not Zero Sum
Successful entrepreneurs want to get to the top of the pyramid, so to speak. Success is their hallmark. Failure, although sometimes encountered, is considered a mere obstacle and never an end result. When faced with difficult business decisions, the successful entrepreneur will always look for a “win-win situation” rather than engage in a zero sum game.

####

Joseph Dworak, Berliner Cohen partner, has over thirty years of legal experience in representing clients from individuals and small businesses to large, publicly-traded companies in various business disputes, including contract claims, real estate matters, and closely held and family-owned business disputes.  Mr. Dworak also has a wide range of experience in both the academic and the professional community, including serving as a Judge Pro Tem, Settlement Conference Judge, and Special Master (appointed by the State Bar for overseeing high tech criminal investigations), in addition to being an Arbitrator of disputes through private and court-coordinated programs.  Mr. Dworak has received academic teaching appointments in local universities and community colleges including San José State University and the Small Business Institute at West Valley Community College.  He has handled many noteworthy cases and has procured multi-million dollar settlements for his clients.  For more information, please contact Mr. Dworak at joseph.dworak@berliner.com.

©2008 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Litigation Group will be pleased to provide further information regarding the matters discussed in this article.

 

Articles

Stays Pending Appeal

by Thomas P. Murphy
August 01, 2005

Few areas of appellate procedure are as complex, or potentially significant, as the rules concerning stays pending appeal. The consequences of the failure to stay enforcement of a judgment or order pending appeal may be obvious. Absent a stay, for example, a successful appellant may be left with a mere right of action against an opponent that has already collected a money judgment. Less obvious may be an appeal’s impact on further trial court proceedings and the availability of trial court remedies. In Varian Medical Systems v. Delfino (2005) 35 Cal.App.4th 180, the California Supreme Court recently examined the rules governing what a trial court may do while an appeal is pending, and reached a surprising result.

Varian involved an appeal from a judgment for damages and injunctive relief based on derogatory Internet postings. Before trial, the defendants filed a motion to strike under California’s anti-SLAPP statute. The trial court denied the motion and the defendants appealed. On appeal from the judgment following trial, the appellate court affirmed, although it struck much of the injunction. The Supreme Court granted review to address whether the appeal from the denial of an anti-SLAPP motion resulted in an automatic stay of trial court proceedings

Code of Civil Procedure section 916 provides that “the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.” Certain exceptions to Code of Civil Procedure section 916 requiring the posting of an undertaking or other action to obtain a stay in most cases largely swallow this rule. However, once a stay is in place the trial court’s powers are restricted.

A stay prevents the trial court from rendering an appeal futile by altering the appealed judgment or order. Thus, an appeal from a preliminary injunction prevents the trial court from modifying or dissolving the injunction. Likewise, an appeal from the denial of a motion to compel arbitration stays further trial court proceedings on the merits.

However, a stay will not preclude trial court proceedings on “ancillary or collateral matters.” For example, a proceeding to expunge a lis pendens is collateral to an appeal from a judgment in the underlying action. Appeals from judgments do not stay proceedings on attorneys’ fee motions. An appeal from the denial of a preliminary injunction will not stay trial court proceedings on the merits.

In Varian, the Supreme Court held that the matters tried were embraced in and affected by the appeal from the denial of anti-SLAPP motion and that, once that appeal was filed, the trial court could not reach the merits. Accordingly, the Court reversed the judgment and remanded the case for a new trial. It thus undid a determination on the merits absent a showing of error at trial. Mindful that its decision might encourage misuse of anti-SLAPP motions to delay, the court deferred such considerations to the Legislature—although it suggested that prompt resolution of SLAPP issues “hopefully” would “somewhat reduce the risk of abuse.”

Given the consequences if enforcement of a judgment or order is not stayed, counsel must study the stay rules carefully. Counsel must also consider the effect that a stay may have on further trial court proceedings and whether an appeal will render a useful trial court remedy unavailable.

####

Thomas Murphy, Berliner Cohen senior attorney, has over twenty-two years of experience in representing a variety of clients from individuals to large, publicly-traded corporations in appellate and extraordinary writ proceedings in state and federal courts, and in litigation involving commercial, intellectual property and real estate matters.  He also represents clients in intellectual property protection matters, including copyright and trademark counseling, registration, maintenance and enforcement, conveyance and licensing of intellectual property, and specialized agreements regarding intellectual property rights.  For more information, please contact Mr. Murphy at thomas.murphy@berliner.com. 

©2008 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Appellate Group will be pleased to provide further information regarding the matters discussed in this article.

 

Articles

Commercial Broker Not Liable For Metroscan Information

by Ralph J. Swanson
January 26, 2005

Commercial brokers can pass on widely used real estate database information with a disclaimer to a potential buyer without fear of liability, Santa Clara County Superior Court Judge Mary Jo Levinger ruled in a judgment entered on January 26, 2005 in favor of Cornish & Carey.

In ruling in favor of Cornish & Carey on all claims, attorney Ralph Swanson, who represented Cornish & Carey, stated, “The Court has affirmed the common industry practice.”

The dispute centered around the stated acreage in a Metroscan printout for commercial property located at 2865 Park Boulevard in Palo Alto, which a Cornish & Cary agent had supplied to Court House Plaza before it entered into a purchase agreement. Court House Plaza claimed that the acreage stated in the Metroscan information was inaccurate and should have been researched by the broker at the county assessor’s office. The judge disagreed, basing her decision in part on the disclaimer that Cornish & Carey provided along with the Metroscan information.

The case between Court House Plaza and Cornish & Carey is 1-04-CV-013559. It was consolidated with Court House Plaza’s underlying case against the seller of the property, Arco Securities, Inc., and an affiliate, Mercer Processing, Inc. (Case. No. 1-01-CV-797922). The judge also found in favor of the sellers in the underlying matter.

####

Ralph Swanson, Berliner Cohen partner, has been practicing law since 1975.  During his many years of experience in commercial and environmental litigation, he has represented a variety of clients, from individuals to large, publicly-traded corporations, in business disputes, environmental and toxic contamination litigation (including Cal/OSHA environmental injury claims), real estate matters, trusts and estates, trade secrets, and closely held and family-owned business disputes. He also serves as a Judge Pro Tem, Settlement Conference Judge, Mediator and Arbitrator of such disputes through private and court-coordinated programs.  For more information, please contact Mr. Swanson at ralph.swanson@berliner.com.

©2008 Berliner Cohen.  This article is not intended to and does not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of the Berliner Site or your receipt of the materials.  Attorneys in the Berliner Cohen Litigation Group will be pleased to provide further information regarding the matters discussed in this article.

San Jose: Ten Almaden Boulevard, Eleventh Floor | San Jose, CA 95113-2233 | 408.286.5800 • Merced: 2844 Park Avenue | Merced, CA 95348 | 209.385.0700

2010 © Berliner Cohen • All Rights Reserved •

The materials on this website are not intended to and do not constitute legal advice or a solicitation for the formation of an attorney-client relationship and no attorney-client relationship is created through your use of this site or your receipt of these materials.