Articles Tagged with California Business Litigation

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A Workers’ Compensation claim made by a woman who lost part of her leg at work has been upheld by the Commonwealth Court of Pennsylvania. The decision comes after her employer, Starr Aviation, disagreed with the decision of the Workers’ Compensation Appeal Board, which ruled that the worker was entitled to compensation.

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Modesty Colquitt was driving a luggage transporter at the Pittsburgh Airport in September 2014 when the accident occurred. The transporter overturned, pinning Colquitt’s left leg beneath it. She was taken to the hospital, where her left leg was amputated below the knee.

The case seems cut-and-dried. However, there are additional facts that are worthy of consideration. Starr Aviation argued that Colquitt was not performing her job duties when the she was driving the transport. Colquitt had forgotten her wallet and feminine hygiene products on that day. Knowing that she would need lunch and the feminine hygiene products during her shift, she called her mother to bring them to her. Colquitt obtained permission from her supervisor to take the transport to meet her mother, which is when the accident occurred.

Both the Workers’ Compensation Appeal Board and the court relied on the “personal comfort doctrine,” a rule of law which stipulates that a worker is still “on-the-job” if they temporarily leave to take medication, use the restroom or complete other small tasks that make it possible for them to perform their job. In essence, the judges felt that Colquitt would have been adversely affected by not having her wallet and the required feminine hygiene products. She simply would not have been able to perform as effectively if she did not have lunch or access to appropriate feminine hygiene products.

This decision comes despite the testimony of co-workers who offered her crackers and pointed out that feminine products were available in the restroom. However, the judge found that this testimony related to “collateral issues” rather than whether or not compensation could be claimed.

Work Injury claims are almost always complicated. This is why it is imperative for California employers to work with experienced attorneys who can offer valuable guidance and advice.  If you have any questions about business litigation or work injuries feel free to contact me, Rich Oppenheim at 818-461-8500 or use the “Contact” option in the right column.

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Technology giant IBM is on the receiving end of a lawsuit by the State of Pennsylvania. The lawsuit, which was filed on behalf of the Department of Labor and Industry, is in response to what the government says is a failed update to its outmoded unemployment compensation system.

Computer-bug-63136248-001The story began in 2006 when the State of Pennsylvania and IBM signed a $109.9 million contract. According to the agreement, IBM was going to overhaul the state’s system for distributing unemployment compensation and collecting unemployment insurance taxes. The Department of Labor was using systems that were outdated and consisted of several programs that were not compatible. IBM was supposed to replace this with a streamlined substitute that would be more efficient and cost-effective in the long run.

A completion date of February 2010 was established by the contract. However, that deadline came and went without a working system being installed at the Department of Labor. Various delays stretched the deadline out to September of 2013, by which time the state had paid $60 million in excess of the agreed-upon sum. The government alleges that even after numerous delays and the extra payments, the computer system at the Department of Labor had still not been updated.

Both sides assert numerous reasons why the project was not completed as agreed upon. Turnover at IBM, and the re-assignment of various employees, caused delays, miscommunication and complications. IBM argues that at least some of the fault lies with the government, citing their failure to appoint personnel to manage the project.

It is safe to say that this case will not be resolved quickly or easily, considering the amount of money and the reputations that are at stake. However, this situation provides a useful reminder of how imperative it is for governments, companies and individuals to be exceptionally cautious when it comes to signing contracts. A well-drafted agreement is the key to a successful project, while one that is poorly written merely opens the door to numerous costly legal battles. Accordingly, it is wise to have all contracts reviewed by a business attorney before signing on the dotted line.

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Charges filed by Los Angeles City Attorney Mike Feuer have put an abrupt end to operations for numerous acting workshops. Feuer leveled accusations against five workshop companies, claiming that they operated in violation of a 2009 law known as the Krekorian Talent Scam Prevention Act.

Stage-Door-123374603-001At any given time, Hollywood is home to thousands of aspiring actors who are desperate to break into show business. It’s hard for these young artists to gain the attention of casting directors who offer parts in movies and television shows, especially when the actors don’t have a top agent working for them. Workshops run by defendants like the Actor’s Key, the Actor’s Link and Studio Productions purport to offer educational classes that allow actors to essentially audition for casting directors. The trouble, as Feuer sees it, is that the workshops charge the actors for their participation. Under the definitions of the Krekorian law, this essentially is a pay-to-play scam in which the actors must submit a fee in order to audition.

Feuer filed charges against a total of five workshop companies, including nearly two dozen individuals, on February 9. Just five days later, one of the most popular and prolific of these workshops, the Actor’s Key, ceased operations and filed for Chapter 7 bankruptcy.

Owners Kristen Caldwell and Katherine Shaw, along with workshop manager Jessica Gardner, are all named in Feuer’s charges. In a statement given to the Hollywood Reporter, the principals of the Acting Key said, “… we have found that there is no realistic alternative to closing the business, and commencing bankruptcy proceedings … .” Additionally, they claim that they have been listing upcoming workshops as “full” for the last several weeks in anticipation of the closure and the charges filed by the city.

Caldwell, Shaw, Gardner and the other defendants are scheduled for arraignment on numerous charges in March. Penalties may include one year in jail and fines of $10,000. Given the high stakes involved, it is clear that understanding all relevant facets of the law is crucial for business owners. Working with a reputable business attorney is the best way to ensure compliance.

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It’s not unusual for litigation to require months or years before settlement. Even then, it does not necessarily follow that anyone will receive timely compensation. That is where companies like RD Legal Funding step in.

Funding-61101867-001RD Legal Funding is a New Jersey company that was founded by Roni Dersovitz. Their business involves advancing money to plaintiffs who are entitled to settlement money. RD Legal provides the plaintiff with money, which the plaintiff later pays back, with interest, when they receive their settlement. There is nothing inherently wrong with this business model. In fact, numerous companies provide similar services across the U.S.

However, a lawsuit has been filed against RD Legal by the New York Attorney General and the Consumer Financial Protection Bureau. Among the allegations leveled in the complaint, RD Legal is accused of scamming 9/11 first responders and former NFL players who are suffering the after effects of multiple concussions. The CFPB and the Attorney General claim that the contracts given to clients of RD Legal were confusing and inaccurate. What’s more, many people who accepted the deals offered by the New Jersey company ended up paying interest in excess of 250 percent, which would be a clear violation of state usury laws.

The case of former NYPD Officer Elmer Santiago is one example. After serving as a 9/11 first responder, Santiago was declared disabled because of an associated respiratory illness. He was awarded a $3.9 million settlement in 2014 that was scheduled to be paid to him within 18 months. RD Legal offered to advance him $355,000 at 19 percent interest. However, when he received his settlement money, RD demanded payment in the amount of $860,000, which was apparently in excess of the contract terms.

Dozens of similar situations are detailed in the lawsuit. RD Legal Funding maintains that it has done nothing wrong while CFPB Director Richard Cordray alleges that the company is part of an “illegal scheme.”

This lawsuit is far from concluded, but it is a helpful reminder for companies to review their policies to ensure compliance with all state and federal laws.

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U.S. District Judge Susan Illston has ruled that Walmart truck drivers are not entitled to an additional $80 million in a class action lawsuit settlement. The complaint was filed in 2008 with hundreds of California truck drivers claiming that they did not receive at least minimum wage for performing certain tasks. Although the judge denied the plaintiffs’ claim to the $80 million, Walmart will still have to abide by the initial $54 million settlement that was awarded in an earlier jury decision.

walmart-truckclose-up-side-view_129821854433586541-001Walmart asserts that its truck drivers are among the best paid in the industry, with many of them earning between $80,000 and $100,000 per year. Moreover, their attrition rate is low, and the judge commended them for taking rapid action to comply with evolving compensation laws. The drivers argued in their lawsuit that their employer compensated them only based upon miles driven and specific activities rather than hours worked, which constituted a violation of state law. Accordingly, the drivers claimed that they did not receive adequate compensation for tasks like washing and inspecting trucks. They further argued that they were not appropriately paid for mandatory 10-minute breaks and 10-hour layovers.

In November 2016, a jury of seven agreed with the drivers, awarding them approximately $54 million in back pay. This latest decision came in response to the plaintiffs’ request for an additional $5.8 million for restitution, $54.6 million in liquidated damages and $25.6 million in penalties. The judge went along with the request for $5.8 million in restitution, but denied the other claims, saying that there is not sufficient evidence that Walmart acted in bad faith or with “dishonest and wrongful motive.”

It’s possible that Walmart may still appeal the decisions by the judge and the jury. However, they scrapped their former driver-compensation package in 2015 in favor of a new one that is in compliance with California law. Because compensation laws change periodically, it is only sensible for all business owners to have their compensation practices reviewed by an employment attorney on a regular basis. This may prevent a company from finding itself involved in a similar class action lawsuit.

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Ownership of some of the most well-known Beatles songs has been on a tortuous path for decades. Sir Paul McCartney, a former Beatle and writer or co-writer of many of the group’s biggest hits, is taking legal action to reclaim the rights to his creations. It’s an ongoing odyssey with no end in sight.

Beatles-Imagine-2902823-001McCartney is the author of many famous Beatles songs. Sometimes collaborating with John Lennon, he wrote tunes like “Love Me Do” and “Yesterday.” However, the rights to those songs were often immediately signed away. Most of the rights were lost between 1962 and 1971. Various publishers snapped up the rights, but by the 1980s, publisher ATV owned most of them. When an Australian businessman who owned a controlling share in the songs put them up for sale in 1984, Michael Jackson notoriously outbid Paul McCartney to become the owner of the Beatles’ catalog.

In fact, Jackson and Sony formed Sony/ATV, with the Beatles’ works being among the company’s major assets. The Jackson family sold their share of the company to Sony after Michael Jackson’s 2009 death. Now that Sony/ATV can claim sole ownership, McCartney is suing them to regain ownership of his work.

The lawsuit, which was filed in New York, is based on a facet of the 1976 Copyright Act, which stipulates that any creative works made prior to 1978 be returned after 56 years to their originators. McCartney’s filing is timely considering that he and Lennon first began writing together in 1962, precisely 56 years before 2018. Accordingly, a court could decide that McCartney may reclaim the lucrative rights to his songs as early as next year.

McCartney has been trying to reclaim those rights for many years. Thus far, Sony/ATV is unwilling to accommodate his request. They cite a long-term relationship with McCartney, and express disappointment that the musician filed the lawsuit, which they call unnecessary and premature.

The battle over the rights to the Beatles’ catalog is likely to continue for many years, which only highlights the need for individuals and companies to protect their intellectual property rights.

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With the passage of Proposition 64 in November, California became one of a handful of states to legalize the use of recreational marijuana. Many residents are thrilled with the outcome, but the new law is leaving employers wondering what their rights are.

Marijuana-legalization-94540729-001The good news is that the authors of Proposition 64 foresaw that marijuana legalization might pose a problem to numerous industries. That’s why there is a provision in the law that explicitly maintains the employer’s right to prohibit the use and possession of marijuana, particularly on any work sites. Accordingly, any company is perfectly within its rights to keep their drug-free workplace policies on track, though it does make sense to ensure that everything is in order.

Now is the perfect time to meet with an employment attorney to make certain that an existing company drug policy is sufficiently broad. If a drug policy is not already in place, then it is definitely time to craft one, a project that takes time and considerable legal expertise. Under the new law, employers are still permitted to require pre-employment drug tests, and they maintain the right to not hire candidates who test positive for marijuana. Even if the drug was obtained and used legally, the employer does not have to accept such use among their prospective employees. However, it is critical that any pre-employment drug screenings are conducted fairly and impartially, without any discriminatory element.

Under California’s new law, employers are also permitted to conduct drug tests among existing employees. Once again, it is crucial that this be done in a non-discriminatory manner. Moreover, companies may want to review their written drug policies with all employees to make it clear that marijuana use is not appropriate or acceptable. Management may also need to sit down with human resources staff to ensure that they are ready to field questions from employees.

California’s revolutionary Proposition 64 may have made recreational marijuana use legal, but it still allows employers to make important safety decisions. If you have any questions about how California’s new recreational marijuana law will affect you and/or your employees, feel free to contact me, attorney Rich Oppenheim at 818-461-8500. You may also use the form on the right side of this page.

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A company’s intellectual property is easily one of its most valuable assets. It’s vital to protect this information at all times, and to ensure that all necessary legal precautions have been taken. Even when a company’s owners think they have done everything correctly to protect their intellectual property, things can still go wrong.

Lawsuit word breaking through red glass to illustrate legal action brought by a plantiff against a defendant in a court of law through opposing lawers or attorneys

That is the case for a Santa Barbara-based startup called Olaplex LLC. The company claims to have pioneered a revolutionary three-step process for protecting hair while it is being bleached in a salon. Bleaching is harmful to hair, causing it to become dry, brittle and damaged. Nonetheless, many people still undergo the treatments, particularly celebrities who must change their hair color for various roles. The result is lighter hair, but at a high cost.

Olaplex set out to change that with a new chemical bonding process that was designed to protect hair strands during the bleaching process. They filed a patent application to protect their invention, which they called Olaplex Bond Multiplier No. 1. It debuted in 2014 and quickly began winning awards. L’Oreal, a French-based conglomerate known for many beauty products, began trying to lure away certain Olaplex employees early in 2015. When that effort didn’t prove successful, L’Oreal and Olaplex entered negotiations in which the larger company proposed to acquire the startup.

Confidentiality and non-disclosure agreements were signed. However, the deal eventually fell through. Olaplex started noticing a few months later that L’Oreal seemed to be selling a product that was remarkably similar to theirs. What’s more, their advertising campaign seemed strangely familiar.

Olaplex has now filed a patent infringement and false advertising lawsuit against L’Oreal. The plaintiff argues that the defendant gained access to secret, proprietary information while the acquisition negotiations were underway. Olaplex argues that this gave L’Oreal access to their exclusive chemical process, which the older company then used to create a knock-off product.

Officials from L’Oreal strenuously deny the allegations. Nonetheless, this entire situation is a crucial reminder of how important it is for all companies, large and small, to protect their intellectual property with the help of an experienced attorney.

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The question of whether or not a franchisor is a joint employer of the workers at a franchisee’s location was at the heart of a class action lawsuit in California. In the federal case, the judge ruled that a franchisor could be held accountable for the misdeeds of its franchisee.

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The complaint was filed in a federal court in San Francisco in 2014. Plaintiffs were a group of current and former employees at McDonald’s restaurants in the Bay Area. All of the restaurants were owned by a franchisee, which is known as The Edward J. Smith and Valerie S. Smith Family Limited Partnership. Workers leveled charges at the franchisee for violating California wage and hour laws. These allegations included consistent errors in payroll calculations, failure to pay overtime, not providing rest breaks and meal periods and neglecting to reimburse workers for the time they spent keeping their uniforms clean and ready to wear.

Along with the wage and hours issues, the lawsuit also questioned whether or not the McDonald’s corporation was a joint employer with the Smith partnership. The corporation ultimately agreed to a $3.75 million settlement, but maintains that it is not a joint employer with its franchisees. Instead, they agreed to the settlement in order to avoid the ongoing costs and disruptions of lengthy litigation.

Workers hail the settlement as a major victory that may allow other parent corporations to be held responsible for the actions of a franchisee. However, business owners take a grim view of the development. They are concerned that a trend toward holding parent corporations responsible for the actions or misdeeds of franchisees may be detrimental to entrepreneurism.

At this time, the National Labor Relations Board is making similar arguments that McDonald’s should be considered a joint employer in a worker retaliation case in New York. If this case receives similar treatment, then it may establish a precedent for holding parent corporations responsible as joint employers.

Whether you are a franchisor or a franchisee, it’s vital that you seek legal counsel so that you are aware of your rights and responsibilities as an employer.

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We celebrate Veterans Day on November 11. Americans honor the brave men and women of the armed forces who risk their lives to protect our freedom. They include past and present members of the US Army, Navy, Marine Corps, National Guard, Air Force, and the Coast Guard.

A Veterans Day design of a heart and American Flag with a red, white and blue background

Originally called Armistice Day, major hostilities of World War I were formally ended at the 11th hour of the 11th day of the 11th month of 1918, when the Armistice with Germany went into effect.

Here are a few quotes to mark this occasion:

“On this Veterans Day, let us remember the service of our veterans, and let us renew our national promise to fulfill our sacred obligations to our veterans and their families who have sacrificed so much so that we can live free.” 
Congressman Dan Lipinski

“This nation will remain the land of the free only so long as it is the home of the brave.” Elmer Davis

“Courage is contagious. When a brave man takes a stand, the spines of others are often stiffened.”  Billy Graham

“How important it is for us to recognize and celebrate our heroes and she-roes!” Maya Angelou

“True heroism is remarkably sober, very undramatic. It is not the urge to surpass all others at whatever cost, but the urge to serve others at whatever cost.” Arthur Ashe

“Duty, Honor, Country. Those three hallowed words reverently dictate what you ought to be, what you can be, what you will be.” Douglas MacArthur