Articles Tagged with Rich Oppenheim

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Where is the dividing line between an efficient money-making model and a pyramid scheme? That’s the question that may be answered in a new lawsuit filed against clothing company LuLaRoe.

Pyramid-Scheme-122597965-300x225LuLaRoe began operations in 2012. They have 80,000 “distributors,” most of whom are millennial moms. With more than $1 billion in sales in 2016, the company is on track to double that number in 2017. Their product consists of brightly colored leggings, shirts and dresses.

Unlike traditional retailers, LuLaRoe does not sell its products in brick-and-mortar stores. Instead, they rely upon distributors or consultants who buy the products and then hope to turn a profit when those products are sold to consumers.

Getting started as a consultant isn’t cheap. A basic package of approximately 70 leggings in adult sizes, 10 leggings in “tween” sizes and 25 dresses costs $2,074. Budding entrepreneurs could opt for a larger package containing more than 500 pieces for $9,058.25.

Three consultants from Sacramento County say they were “doomed from the start.” In their lawsuit, they claim that LuLaRoe bombarded them with demands to “buy more/sell more.” Using aggressive pressure tactics, consultants were encouraged to have at least $20,000 worth of merchandise on hand. Even if existing inventory wasn’t moving, the distributors were continually exhorted to purchase more.

The consultants say in their complaint that the company used unfair and sometimes outrageous ploys to get them to buy more inventory. LuLaRoe representatives allegedly counseled distributors to take out loans and use credit cards to purchase more product. One consultant said that she was told to sell her breast milk to raise money for buying more LuLaRoe product to sell.

In addition to accusing LuLaRoe’s principals of running a pyramid scheme, the lawsuit argues that the company violates the federal RICO act. The consultants also say that bonuses promised by the company for recruiting new distributors and buying more merchandise never materialized.

Working with a qualified business attorney helps entrepreneurs to avoid costly and time-consuming litigation. With legal advice, LuLaRoe may have been able to focus on profits without allegedly running afoul of the law.

Feel free to contact me, Richard Oppenheim with your related legal questions. I may be reached at 818-461-8500 or by using the “Contact Us” box in the right column.

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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

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Three women who used to work at Google have filed suit against their former employer. Their complaint states that the company systematically discriminates against female employees by failing to pay them the same rate that is given to men doing the same jobs.

Gender-Discrimination-105366239-001The plaintiffs include Kelly Ellis, Holly Pease and Kelli Wisuri, and they make the argument that their lawsuit should become a class action on behalf of other female current and former employees. Ellis says that despite having four years of professional experience as a software engineer, Google hired her as a Level 3 employee in 2010. That level was considered entry level, and was designed for recent college graduates. A few weeks later, a male engineer with similar experience was hired at Level 4. This garnered him a larger salary and put him in line for extra bonuses and raises. Ellis further claims that other male employees were brought in at Level 4 even though they had less or comparable experience when compared with hers.

Ellis goes on to claim that Google hired her as a front-end engineer even though her experience was as a back-end engineer. In Google’s hierarchy, it is the back-end engineers who are the most esteemed and higher paid. Ellis says that she and other female engineers were prevented from entering similar positions. The two other plaintiffs share similar accusations.

A spokesperson for Google says that the company disputes “the central allegations” of the case, pointing out that a worker’s level and their promotion track follow a rigorous process that is meant to preclude the danger of gender bias.

However, a study by the Labor Department which recently concluded an audit of the company’s pay practices disputes this. The audit points to “systemic compensation disparities against women pretty much across the entire work force.” Google has not been charged with wrongdoing relating to these allegations.

This latest case is yet another reminder of how critical it is for companies to review their hiring, promotion and wage practices with a business attorney. Running afoul of employment laws is always bad for the bottom line.

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Sports drink brand Gatorade recently settled a lawsuit that was brought against the company by California Attorney General Xavier Becerra. At the heart of the matter was a free, downloadable game that Becerra argued disparaged water and healthy nutritional choices.

Legal-Fees-PaidGatorade made a game called Bolt! that was available to the public for free download in 2012, 2013, and then for a short time in 2017 as well. Players used a likeness of Olympic track athlete Usain Bolt to race across cell phone and tablet screens. When Bolt encountered Gatorade on the track, his speed increased, but when he encountered water, his performance deteriorated. Allegedly, the game inspired players to maintain their “performance level high and avoid water.”

Becerra argued in his complaint that the game made it appear as if water was an unhealthy choice that most athletes avoid. Accordingly, playing the game would encourage people, particularly children, to choose sports drinks instead of water.

In a statement, Becerra said: “Making misleading statements is a violation of California law. But making misleading statements aimed at our children is beyond unlawful, it’s morally wrong and a betrayal of trust.”

The day after the complaint was filed, Gatorade reached a settlement deal with the state. They agreed to a settlement of $300,000, $120,000 of which is earmarked for the promotion of better nutrition and hydration choices for young people.

Still, Gatorade does not admit to any wrongdoing in connection with the settlement. Katie Vidaillet, spokeswoman for Gatorade, notes: “The mobile game, Bolt!, was designed to highlight the unique role and benefits of sports drinks in supporting athletic performance. We recognize the role water plays in overall health and wellness … .” Moreover, the company has agreed to work harder at meeting the responsible advertising standards set by parent company PepsiCo.

Becerra hopes that the lawsuit and settlement will put other companies on notice about false advertising. While creativity is wonderful for capturing the attention of consumers, it is best to guard against making false claims. Work with a California business attorney to ensure that you company doesn’t run afoul of the law.

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When an individual or a company obtains a trademark registration in the U.S., they are granted certain rights and protections. If they discover that another party is using a mark that is the same as or confusingly similar to their registered trademark, then they have a right to bring legal action against the alleged infringer. This concept is at the heart of a lawsuit against well-known outdoor outfitter company L.L. Bean.

Trademarks-47837347-001A good trademark acts as a source indicator for the products it covers. However, what happens when two companies in the same industry decide to adopt similar marks? Consumers may have difficulty differentiating the offerings of one company from those of its competitor. The result can mean lost sales and a tarnished reputation if the products are not as good as those of the competition.

Utah-based outdoor and mountaineering gear manufacturer Alfwear, which uses the KÜHL trademark as their brand name for outdoor clothing, brought the lawsuit against L.L. Bean based on their registration of “The Outsider” mark. The mark is registered for “rugged outdoor clothing, namely, belts, bottoms, hats, jackets, pants, shirts, shorts, T-shirts, tops,” and has been in use since June 2015.

Recently, L.L. Bean launched a marketing campaign with the tagline “Be an Outsider.” The company even filed a trademark application to register the mark “Be an Outsider” in June 2017. The phrase is being used in various advertisements across the country.

The lawsuit from Alfwear argues that these marks are too confusingly similar. Moreover, Alfwear believes that L.L. Bean deliberately choose their “Be an Outsider” phrase in an attempt to mislead, confuse or deceive consumers.

Among other relief, Alfwear is asking that L.L. Bean be ordered to stop using the phrase “Be an Outsider” altogether. The company is seeking damages for lost profits as a result of consumer confusion.

L.L. Bean has not publicly commented on the lawsuit, but it is natural to assume that they will be fighting against Alfwear’s claims. Intellectual property is one of a company’s most valuable assets, and protecting it with the help of a California business attorney is imperative.

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One of the questions I hear frequently is about whether we are accepting new clients.

While the short answer is “Yes”, here is some additional information which many people find interesting.

Great%20Fit%20Gears%2039896521-001.jpgOur law firm, Sylvester Oppenheim & Linde is committed to client service and quality legal representation for each and every client. That means that we only accept clients who we feel are a good match for our expertise, experience and areas of practice.

I learned a long time ago that we can’t be all things to all clients, but we can be all things to some clients: and those are the ones we welcome and serve in an exemplary manner.

The purpose of this blog is to provide helpful information to anyone who reads it. On our website, you will find another example of our “Be of Service” attitude by reading our Home Page Article “Eleven Questions to ask BEFORE Hiring a Business Attorney“. You will also find a list of our practice areas on that page.

Our clients tell us that they appreciate our honesty, accessibility and guidance. And we appreciate our clients.

Back to the question. The answer is: “Yes, we are always looking for one or two new good clients.” If you have a legal issue, I invite you to call and let’s find out whether we are a great fit for each other. I can be reached at 818-461-8500 or via the Contact form on this page.

Richard Oppenheim

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Most companies have websites today. In fact, there are few business owners who would consider operating without one. That is because consumers are placing increasing reliance as websites to serve as proxies for brick-and-mortar locations. They may expect to shop, procure coupons, order photographic prints or even refill prescriptions from a website that is connected to a retail location.

ADA-138029727-001Everyone appreciates the convenience of being able to take care of a few errands online. However, not every company has fully considered whether or not their website is equally accessible to all users. That problem is at the heart of a recent lawsuit in Florida in which a legally blind man prevailed over well-known grocery chain Winn-Dixie.

Juan Carlos Gill liked shopping at Winn-Dixie because of its affordable pricing and convenient locations. An ad on television alerted him to the fact that Winn-Dixie’s website provided the ability to get digital coupons and refill prescriptions. When he tried to take advantage of these conveniences using the enhanced online software that allows a sight-challenged person to use the Internet with ease, Gil discovered that the Winn-Dixie website was incompatible. Try as he might, he could not avail himself of the useful services on the website that were readily available to consumers who were not sight impaired.

Gil sued Winn-Dixie for violations of the Americans with Disabilities Act, or ADA. Eventually, a two-day bench trial was held with Judge Robert N. Scola, Jr. presiding. Judge Scola ultimately sided with the plaintiff based on what he says is the company’s violation of Title III of the ADA. A witness for Winn-Dixie had testified that the company was in the midst of establishing its website’s ADA policy, and that they had set aside $250,000 for the task. An expert witness for Gil argued that his firm could have made the conversions for as little as $37,000. What’s more, relatively little time would be necessary to make the website accessible to the vision impaired.

Winn-Dixie might appeal this decision, but it is a timely reminder that all company websites should be reviewed for ADA compliance.

One more note of interest: Late last month Gil filed another similar lawsuit. In his lawsuit Gil is asking a federal court to force the owners of Germain Arena in Florida, Gale Force Sports and Entertainment, to make its website accessible to blind internet users.

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How well are anti-bullying policies being implemented in America’s schools? That question is at the heart of a case against Nevada’s Clark County School District. The parents who brought the case say that not only were they not informed about the bullying their sons suffered, but also that school officials did little to investigate or correct the situation.

schoolbullyingMothers Mary Bryan and Aimee Hairr had the assistance of the ACLU when they brought their lawsuit against the district. Their complaint detailed a horrific six months in 2011 during which both of their sons were relentlessly bullied by other students at Greenspun Junior High. According to the plaintiffs, the boys were “physically assaulted, sexually assaulted, harassed, bullied, [and] sexually discriminated against.”

Hairr says that she had no idea what was happening to her son. She knew that he was becoming increasingly withdrawn, wanting to spend time alone in his room rather than with his family. Bryan’s son began being bullied when he stood up for his friend. It was Bryan who eventually overheard the two boys talking about the abuse; neither child told the parents what had been happening to them.

The school also did not disclose the ongoing problem. “We all were in the blind,” said Hairr. Bryan said she would have been satisfied if administrators had been willing to talk to them about the situation before it turned into a lawsuit.

Now, a judge has ruled that the school district must pay $200,000 to each of the families affected by the bullying. Judge Nancy Allf argued in her decision that the school district had failed to protect the boys’ right to due process under the 14th Amendment.

The district may appeal, but it seems as though this case is already changing things. The district’s bullying policy is undergoing changes to make it more effective. However, Bryan and Hairr say that the changes will make little difference unless the district ensures that staff members comply with the policy.

Any anti-bullying policy is only good as far as it is implemented. Proper training and documentation can help districts to avoid lawsuits.

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Most company executives are aware of the FMLA benefits due to expectant mothers who work at their firm. Perhaps they even provide those mothers with extra benefits, like a few weeks of paid leave just before or after the birth. While mothers certainly appreciate these benefits, it pays to be aware that new fathers may want and even be entitled to similar benefits. Failing to provide gender-neutral parental leave benefits may provide employees with the basis for a lawsuit.

EEOC_cooltext396845518This is the situation in which cosmetics company Estée Lauder finds itself. The EEOC recently filed a lawsuit against the company because it does not offer equal parental care leave to male and female employees. A pregnant female worker is eligible for as many as six weeks of paid leave and a flexible back-to-work benefit that may include shortened hours and the ability to work from home. Male employees receive just two weeks of paid leave and have no option to take advantage of the flexible back-to-work benefit.

The EEOC’s complaint says that the policy violates the Equal Pay Act and Title VII of the Civil Rights Act. Under these laws and others, the federal government requires that companies provide equal benefits and pay for the same work. This additionally means that these federal laws are gender neutral. In other words, both men and women are entitled to equal protection.

This is the second such lawsuit to be filed in recent memory. A J.P. Morgan Chase fraud investigator sued his employer because he was not offered the same parental-leave benefits as a female employee would receive. This earlier suit is still pending.

Employers are not legally required to provide paid parental leave for female or male workers. However, they are required to abide by federal laws like the FMLA that protect workers who want to take time to bond with their newborn child. Offering additional, paid-leave benefits for new parents can be a valuable perk that will attract outstanding talent to your firm. Nonetheless, it is critical to ensure that these benefits are offered on a gender-neutral basis to avoid lawsuits.

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A robust network can help to open the door to new professional opportunities. Increasingly, professional networks are being created and maintained in a virtual environment. While it is becoming more common for colleagues and former co-workers to connect to each other via social media, it is vital for employers and employees to understand how various employment agreements that they are a party to may affect their interactions.

Scales-of-Justice-Digital-94824052-001This concept is at the heart of a recent case in Illinois. A branch manager for Bankers Life & Casualty Co. named Gelineau left his employment to accept a position with a competitor called American Senior Benefits, LLC. After Gelineau began working with his new employer, he sent LinkedIn invitations to three of his former co-workers at the Warwick, Rhode Island office of Bankers Life. The trouble is that Gelineau had signed a non-solicitation agreement with his former employer. As is common with these agreements, Gelineau had promised not to solicit other Bankers Life employees to seek employment with other companies.

Bankers Life sued American Senior because they believed that Gelineau had violated his non-solicitation agreement. However, the court did not agree. The judge ruled that the LinkedIn emails were “generic” and “did not contain any discussion of Bankers Life.” Moreover, the email did not contain a “solicitation to leave their place of employment.” Instead, the email was merely intended to provide an opportunity for the former co-workers to keep their professional network as robust as possible.

According to the court, if Gelineau had included some kind of hint or suggestion that the Bankers Life employees should leave their current place of employment in favor of American Senior, then the outcome may have been different. Bankers Life was concerned that a listing of open positions at American Senior was included in Gelineau’s LinkedIn home page. Nonetheless, the court did not feel that Gelineau could be held responsible for what visitors to his LinkedIn page did once they were there.

Non-solicitation agreements are standard in many industries. With the changing communication landscape, it’s important to recognize what these agreements do and do not cover.