So You Think You Must Arbitrate? Not So Fast

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So You Think You Must Arbitrate? Not So Fast

For many automotive dealers and manufacturers, the preferred means of resolving disputes with customers is arbitration. It is often less costly and more efficient than litigation, and allows parties to resolve their disputes in a more private forum rather on the public stage of a courtroom trial.

Increasingly, however, states like California are carving out exceptions to arbitration where they believe it necessary to protect certain public goods, or the rights of consumers. Most recently, California has determined that car purchasers cannot waive their right to public injunctive relief through arbitration.

Pursuing Arbitration in Rancho Cucamonga

Arbitration is an increasingly popular means of alternative dispute resolution that avoids state and federal courtrooms. An arbitration is conducted similarly to a trial, with both sides presenting evidence to support their case. The big difference is that the attorneys for each side present their evidence to a panel of arbitrators – instead of a judge.

The rules of arbitration can also be very different from a courtroom. Parties can specify that they want to use the rules of a certain jurisdiction, like California, or if they want to use rules developed by arbitration associations. Because the typical Rules of Evidence often have the effect of limiting what a party can offer as evidence, being able to choose a less restrictive set of rules could have a great impact on the strength of either side’s case.

One of the reasons that arbitration is very popular, beyond being more cost-effective, is that it can be done in a much more private manner than a court case. Where sensitive issues are at stake, or a party is concerned about how they will be portrayed in the media – arbitration can eliminate many of these concerns.

Placing Limits On The Scope of Arbitration

Many automotive dealers and manufacturers require purchasers to arbitrate disputes by including language requiring arbitration in their contracts. These contracts will typically say that the individual signing it agrees to pursue arbitration rather than litigation if an issue arises.

While these arbitration clauses are perfectly legal, California courts have stepped in to limit the rights of companies to force consumers into arbitration where important public interests are at stake. Where courts feel that it is important that consumers not be forced to resolve their complaints in arbitration, they can make exceptions to arbitration clauses.

A recent example is the decision of the California Supreme Court in McGill v. Citibank. In that case, an argument was made that consumers who were seeking public injunctive relief – such as requiring a store to stop selling certain products – could be forced into arbitration. However, injunctive relief is not possible in arbitration, because the arbitrator has no authority to issue an injunction.

The California Supreme Court decided that the right to injunctive relief is not only important to consumers, but also the general public. It ensures that other members of the public are protected from harm when a harm becomes known. For example, if an auto manufacturer is manufacturing faulty parts, an injunction can stop them from manufacturing more of the faulty parts, thereby hurting more consumers.

If consumers were forced into arbitration without the right to seek injunctive relief, the court decided this would do a disservice to everyone involved. Because of this, the Court concluded that businesses may require consumers to arbitrate damages claims through arbitration clauses, but they cannot force consumers to waive their right to injunctive relief in court.

California Attorneys Instructing You On How To Draft Enforceable Arbitration Clauses

Arbitration is a great option for many California businesses in the automotive industry. It creates a faster, more straightforward, and less expensive option for dispute resolution. Arbitration, however, cannot be used in every circumstance.

At CKB Vienna LLP, our automotive attorneys can help you draft an arbitration clause for your contracts that will encourage the resolution of disputes through arbitration, while acknowledging the limits imposed by the California courts. For more information, contact us online or at 909-980-1040.

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The Whole Shebang: Equity Versus Asset Sales

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The Whole Shebang: Equity Versus Asset Sales

The closing of a business sale is often a time for celebration and recognition of achievements. Whether you are the seller enjoying the lucrative acquisition of your company, or the buyer getting a great deal, corporate mergers and acquisitions are often the prize for hard work and years of commitment.

In the midst of excitement about a pending sale, it can be easy to lose sight of a very important question: whether the sale is for equity or assets. Indeed, many small business owners and purchasers frequently confuse the two. When this detail is overlooked, it can create serious liability issues down the road.

Helping Rancho Cucamonga Business Owners Understand Equity and Assets

Business sales fall into two different categories:

  • equity sales

  • asset sales

The vast majority of business acquisitions in the United States arise from the purchase of assets, rather than equity. In an asset sale, the purchaser is obtaining the goods of the company, such as the products or equipment but doesn’t purchase the actual corporate structure.

Assets sales are favorable for buyers because they allow the buyer to obtain the best parts of the company while minimizing liability for the company’s past actions or defects. Instead, the liabilities remain with the original corporate structure. For obvious reasons, this is a downside for sellers to agree to an asset purchase.

Equity or stock sales, by contrast, involve the purchase of the entire company, including name, corporate structure and potential liabilities. Equity sales generally only arise when the company being purchased is a C or S corporation, although LLPs and LLCs may sometimes be sold in equity sales.

Because the purchaser in an equity sale takes over the ownership and interest in the corporation, he or she immediately assumes an interest in both the assets and liabilities of the company.

Many purchasers will attempt to minimize the risks of an asset sale through comprehensive background checks into any exposure the business might have. They may also require the seller to provide representations and warranties about their product – sometimes even guaranteeing to defend lawsuits against the buyer if they arise after the sale is completed.

Watch Out For the Tax Man

One very important consideration when evaluating asset and equity purchases is the tax implications of either route. In an asset sale, the profits that the seller receives from the purchase of assets are typically taxed as capital gains or personal income, depending on the specific asset sold. This can significantly increase the seller’s tax bill depending on the size of the company.

In an equity sale, the seller will be expected to pay taxes on the capital gains of the increase in equity in the company when the company is sold. The capital gains tax rate for this kind of a sale is much lower than the rate applied to piecemeal asset sales, which means that this is generally a better deal for sellers.

Overall, these considerations must be balanced against the purchaser’s interest in the business and the seller’s motivation to sell. While buyers generally prefer asset sales to limit liability, sellers may be able to push an equity sale where the company seems likely to grow in value, or the liabilities are minimal.

California Transactional Attorneys Guiding You Through A Business Purchase

There are many factors to consider when deciding whether to purchase a business, or making the move toward selling your own. The care that you take in structuring a business acquisition can have consequences that impact you for many years down the road.

At CKB Vienna LLP, our corporate and transactional attorneys can walk you through the pros and cons of equity and asset sales, and help you evaluate which approach best meets your needs. . For more information, contact us online or at 909-980-1040.

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Who’s Responsible? The Many Different Parties In Construction Disputes

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Who’s Responsible? The Many Different Parties In Construction Disputes

Construction projects, particularly commercial construction projects, can involve a dizzying array of companies and parties. From start to finish, construction work may involve architects, general contractors, independent contractors, subcontractors, and even sub-subcontractors.

When something goes wrong, keeping track of who is responsible for what liabilities, and what damages is made all the more complex by this wide range of players. It can spell problems for plaintiffs and defendants who are trying to protect their litigation interests. Before getting involved in a lawsuit, or immediately upon receiving service of a complaint, it can be important to understand the many players involved and the responsibilities they have.

The Who’s Who Of A Construction Project in Rancho Cucamonga

Claims involving construction defects and breach of contract can involve many different parties, including:

  • The property owner

  • Subcontractor

  • General contractors

  • Architects

  • Engineers

Depending on the circumstances, any one of these categories of individuals can be responsible, or even multiple parties at once. For example, if a staircase in a building is built incorrectly, the architect or engineer who designed the staircase may be liable. But if the staircase was designed correctly, but there were faults in its construction, a subcontractor or general contractor may be responsible.

Subcontractors are generally hired to do specific types of work, such as installing floors or laying bricks. When their specific project is done incorrectly, they will be responsible for the work they performed. However, the general contractor can also be held responsible, as they typically have the contract with the owner and hired the subcontractor themselves.

Property owners can also become liable in construction cases where safety issues arise. For example, perhaps the property owner failed to warn the general contractor of holes or other dangerous conditions on the property, or did not properly erect barriers in order to keep children away from construction zones.

Indemnification in Construction Cases

In addition to identifying individuals responsible for construction defects, potential plaintiffs and defendants in construction cases must also look to any applicable contracts that apply to the construction taking place.

In many construction contracts, there will be indemnity provisions for certain parties that protect them from liability. Indemnity means that another party has agreed to pay for the liability of another and defend them in litigation. For instance, an architect may have an agreement with a general contractor that if he is sued for work done on the general contractor’s project, the general contractor will indemnify him.

It is often quite common for subcontractors to agree to indemnify general contractors in lawsuits. As discussed above, general contractors can be sued for work that their subcontractor incorrectly performs. In order to minimize damages, many general contractors will require that the subcontractor indemnify them if such a circumstance arises.

This means that in order to properly bring, or defend, a construction lawsuit, it is imperative that you consider not only the actors actually involved, but also those entities that may have agreed to indemnify them.

California Attorneys Navigating The Complexity of Construction Litigation On Your Behalf

Whether you are a homeowner who has just discovered a construction defect in your home, or a small business that has recently been sued for construction issues that are not your fault – one of the most important first steps you can take is to understand all the potential parties in your case.

At CKB Vienna LLP, our construction litigation attorneys will quickly get up to speed on the construction defects and party issues in your case. We can decipher the various contracts, with the aim of ensuring that the correct parties are held responsible. For more information, contact us online or at 909-980-1040.

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Shareholders Gone Wild: When Unhappy Shareholders Sue

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Shareholders Gone Wild: When Unhappy Shareholders Sue

At some point in the development of your business, you may decide to take on investors. This allows you to acquire additional capital that allows your company to take its next big step toward success. Typically, individuals or other companies will give you money in exchange ownership of a part of your company. As such, they become your shareholders.

While shareholders may seem like passive investors with little interest in the management of your company beyond the return on their investment, the reality is that shareholders have many important rights – and when they think those rights have been violated, they can sue. Without necessary care, shareholder lawsuits can wreak havoc on your bottom line.

Understanding the Rights Available to Rancho Cucamonga Shareholders

Shareholders have two primary types of rights: Direct and Derivative. Direct rights are rights that belong to the specific shareholder at issue and derive from injury suffered specifically by that shareholder. For example, if the company breaches a contract with a shareholder, that is a direct right that can lead to direct action.

Derivative rights are those rights that are actually owned by the company, but which the shareholder may assert on behalf of the company. These rights typically arise when individuals at the company do something that is bad for business, and therefore bad for a shareholder’s investment. An example of this would be if an officer or director were to steal from the company.

More often than not, litigation brought by shareholders is done to assert derivative rights, as these are more easily violated.

The Scope of Derivative Action Litigation

Within a business, many different individuals owe duties to the business and to its shareholders. Officers like CEOs and CFOs owe duties of good faith, fair dealing, and loyalty to the company. This means they must act in the best interest of the business and cannot pursue side deals with competitors, or take action that would hurt the company while benefitting them personally.

The same duties apply to those on the board of directors. Board members must always act in the best interests of the company. When they make business decisions they must put the interests of the company above their own personal interests.

Finally, shareholders may also owe duties to the corporation and to other shareholders. Shareholders have responsibilities to refrain from making decisions that adversely affect other shareholders.

If any one of these individuals fails in their duties, a shareholder may have a right to bring a derivative shareholder action on behalf of the company to address these wrongs. But, in order to do so, the shareholder must first take certain steps.

Notice Before Litigation

Because shareholder derivative actions are taken on behalf of a company, they can only be brought when the company itself fails to act. For example, if officers of the company learn that a member of the board of directors is stealing from the company, they may bring a lawsuit against that board member.

But if they are conspiring with that board member to fill their own pockets – and do not want to sue the board member for his misdeeds – then a shareholder may step in and take action on behalf of the company, asserting the company’s interests in its own profits and funds.

Thus, any shareholder who wants to a sue a company must be careful to raise the issue with the corporation first and give them the opportunity to respond. Only when they fail to do so may the shareholder step in.

California Business Attorneys Helping Protect You From Shareholder Litigation

Every business owner must realize that when shareholders enter the corporate mix, there is increased opportunity for conflict and litigation. Officers, owners, and the board of directors must be careful to educate themselves as to their responsibilities to the company, and to their colleagues and investors.

At CKB Vienna LLP, our business litigation attorneys can help you prepare to take on shareholders before the necessity arises. We work with you to develop policies and procedures that will protect shareholder interests, and work to minimize litigation. For more information, contact us online or at 909-980-1040.

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Protecting Your Business With Cannabis Insurance Coverage

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Protecting Your Business With Cannabis Insurance Coverage

Securing insurance to cover your assets, personal interests, and your workers is a fundamental component of every successful business. Disasters can happen no matter how much effort you may take to prepare, and certain natural events are always out of your control.

With the recent legalization of marijuana in California, marijuana companies are increasingly turning to traditional insurers to secure coverage for their business assets in the event of theft, fire, lost crops, and other disasters. As the industry expands, it is anticipated that insurance coverage will expand also.

Why Business Insurance Is Important for Your Rancho Cucamonga Business

When starting out as a small cannabis operation, one of the challenges can be determining what to spend money on, and what to hold off until you are more established. Investments must be made into infrastructure, utilities, marketing, and initial product – and this can leave companies strapped for cash.

While many may view business insurance as an expense to be put off for later, it serves an extraordinarily important purpose and should not be overlooked. Property and casualty insurance can make the difference between surviving a disaster such as flooding or theft, or losing your life’s work. Particularly in light of the recent fires that have ravaged California, it can be a necessity.

Property and casualty insurance protects your business facilities, and everything maintained inside your business operations, including:

  • Equipment

  • Product

  • Cash investments

  • Electronics

  • Start up materials

While some property and casualty insurance covers “all risks,” others are specifically limited to certain risks like fire. You’ll want to make sure to review your policy to be certain that it suits your needs.

Business Insurance For the Cannabis World

While some forms of insurance are available to cannabis companies in California, they are often very expensive, difficult to obtain, and have significant gaps in coverage. Because marijuana is still illegal on the federal level, many insurers are unwilling to provide product liability coverage for marijuana, or to protect officers and directors of marijuana companies.

Since the legalization of marijuana in California, the California Insurance Commissioner has made a concerted effort to trying to bring insurers into the market to provide affordable and comprehensive business insurance for marijuana businesses.

Recently, on November 2, 2017, California announced that it had approved the filing for Golden Bear Insurance Company to provide cannabis business insurance to California companies. It is anticipated that this approval will help to expand insurance options for businesses, their employees, and investors by filling in the gaps currently in the market.

California Cannabis Attorneys Helping Your Protect Your Business

With the introduction of new insurers to the California cannabis landscape, there is likely to be an improvement in the options for business and product liability available to marijuana growers and sellers. These include improved property and casualty insurance options, and greater protection for those who work in the cannabis industry.


At CKB Vienna LLP, our cannabis attorneys understand the constantly changing landscape of California cannabis laws, and what this means for you and your business. We can work with you to appraise opportunities for insurance or greater business protection and make sure you are aware when new options become available. For more information, contact us online or at 909-980-1040.

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Federal Strides: First Trademarks for California Cannabis Company

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Federal Strides: First Trademarks for California Cannabis Company

The contrast between California’s legalization of marijuana and the federal government’s criminalization of it creates complexities that go far beyond drug enforcement issues. Business must interact with the federal government in many ways, including paying taxes and abiding by federal workplace regulations, all of which create unique issues for marijuana companies.

Recently, one California marijuana company passed a significant federal milestone when it was granted a trademark from the U.S. Trademark Office. This signifies an important step in the federal recognition of cannabis business ventures.

Understanding Trademarks for Rancho Cucamonga Marijuana Companies

A trademark is a brand name that your company uses to define itself. This can be a word, a symbol, or name that you use to distinguish your company and the products it provides. As you gain increasing recognition within the marijuana industry, other companies might want to rip off your reputation by imitating your brand name and your product. This is why trademark registration is important.

In order to protect your trademark and keep others from using it, you can register your trademark with the U.S. Trademark Office. Registering your trademark makes it known to the public that a certain mark is your brand name and allows you to go after others who may try to use it.

In order to register a trademark, your mark must be distinct and cannot already be in use by another business operating within a similar industry to yours. The U.S. Trademark Office will review your application for a trademark registration and determine whether your brand name qualifies.

Trademarking and The Cannabis Industry

Because trademarking is regulated by the federal government, cannabis companies have historically been unsuccessful in pursuing trademarks for their brand names. Indeed, it is often difficult for marijuana producers, sellers, and affiliated companies to even find trademark attorneys willing to consider a potential trademark application.

Although marijuana companies are often ineligible for federal protections – like patent recognition – the California company, BudTrader, Inc, decided to take a chance at trying to obtain a patent for its online cannabis commercial platform. Despite filing for the trademark in 2015, the road has not been an easy one.

Initially, BudTrader was denied its trademark application, but modified their application and appealed. Over the course of the next year and a half, BudTrader worked with the U.S. Trademark Office to convince them of the company’s right to a trademark. In early November, success was achieved! The company received official word that its trademark had been registered.

For many California cannabis sellers and growers, this is an important victory. It is an important milestone on the path to federal recognition – and increasingly productive relationships between legal state operations and federal agencies. It is anticipated that other cannabis companies may move toward similar trademark recognition in the foreseeable future.

California Cannabis Lawyers Fighting To Protect Your Business

With the incredible growth occurring in the cannabis industry in California, competition is certain to become more intense in coming years. This can lead to business disputes, broken contracts, brand imitation, and other ongoing business issues.

If your company is looking to become a leader in the California marijuana industry, it is important that you work with qualified cannabis attorneys to protect the business that you have developed.


At CKB Vienna LLP, our cannabis attorneys will work with you to address business issues and disputes, including trademark needs, in an aggressive and strategic manner. For more information, contact us online or at 909-980-1040.

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Do Good: Becoming A Benefit Corporation In California

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Do Good: Becoming A Benefit Corporation In California

Transactional Attorneys Assisting with Benefit Corporations Throughout San Bernardino

n an effort to promote various social benefits and public goods in addition to shareholder profits, California recently passed legislation allowing corporations to apply for benefit corporation status. This status is of increasing interest to entrepreneurs and startup companies across the state, and one you may want to consider when forming your own company.

What Is Benefit Corporation Status?

Benefit Corporation Status is a type of corporation that allows a for-profit entity to pursue certain societal goods in addition to maximizing profits for investors and shareholders. For instance, a company may pursue goals of minimizing environmental impact, or of increasing civic involvement in a community.

Traditionally, corporations are tasked with growing their revenue and maximizing profits above all other agendas, which can create outcomes that are ultimately less beneficial to society. For example, if products that damage the environment are consistently less expensive than products that are good for the environment, corporations will lean toward the cheaper, but more harmful, products in order to minimize expense and maximize profit.

Benefit corporations allow companies to circumvent these types of conundrums by declaring an interest in non-profit as well as for-profit goals. This allows companies to take a more holistic approach that benefits individuals beyond their wealthy stakeholders.

What Does a Benefit Corporation Require?

Becoming a benefit corporation requires three fundamental steps that are different from normal corporate status. First, the benefit corporation must declare a public benefit purpose. Under California law, this public benefit can include any of the following:

  • Preserving the Environment

  • Promoting Arts and Sciences

  • Helping Low Income of Underserved Communities

  • Promoting Public Health

While these types of public benefits are examples, they are not an exhaustive list and California law permits any public benefit purpose that truly supports a public good.

Once this public benefit is established, officers and directors at the corporation are required to consider this public benefit during their decision-making, and evaluate how any particular decision is likely to impact the public goods that they have chosen to focus on.

The corporation must also report on the ways that its actions have helped or hurt such public benefits. This allows the public to independently evaluate whether the corporation is meeting the objectives it has set out for itself beyond simply increasing profit.

If you are just starting out as a corporation, this process allows you to achieve benefit corporation status from the get-go. If you are working with an existing corporation that is considering transitioning to benefit corporation status, it is required that two-thirds of shareholders agree with such a status change before it can be implemented.

The “Benefits” of Benefit Status

Consumers are increasingly looking to patronize companies whose missions and goals align with their own. Benefit corporation status allows corporations to clearly signal to consumers what their goals and principles are, and how they are working to support those objectives.

Benefit corporation status also gives officers and directors more flexibility in making decisions on behalf of a company, as they are not bound to consider only those outcomes that best maximize profits.

California Lawyers Advancing Corporate Welfare Through Benefit Status

Whether you are an entrepreneur just starting out or a seasoned business professional interested in broadening  the objectives of your corporation, benefit corporation status may be an important strategic change worth considering. At CKB Vienna LLP, our transactional attorneys can work with you to evaluate how benefit status can positively impact your company and your community as well. For more information, contact us online or at 909-980-1040.

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The Benefits of Alternative Dispute Resolution For Small Businesses

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The Benefits of Alternative Dispute Resolution For Small Businesses

San Bernardino Business Law Attorneys Assisting With Small Business Dispute Resolution

If you are a small business owner, you have no doubt experienced a legal dispute at one time or another. Whether through disgruntled employees, a member of the public who is injured while on your property, or a dissatisfied contractor, claims for damages can easily arise as the cost of doing business.

While these types of disputes may be difficult and frustrating, they rarely involve dollar amounts that justify paying exorbitant legal fees just to defend yourself and your business. For this reason, alternative dispute resolution has become an increasingly promising alternative for resolving small business disputes.

Options for Alternative Dispute Resolution in California

The California judicial system heavily promotes the use of ADR in state court cases. Options for ADR in California include:

  • Mediation

  • Arbitration

  • Neutral Evaluation

  • Settlement Conferences

Neutral evaluation and settlement conferences often require the least amount of commitment for litigants who are wary of dispute resolution and would prefer to litigate their case.

In a neutral evaluation, a neutral evaluator is selected who is an expert in the field at issue such as construction. Each party has the opportunity to present their case to the neutral evaluator. The evaluator will then discuss each party’s strengths or weaknesses in the case with that party, and offer suggestions for resolving the dispute. These suggestions are not binding but can help parties decide the best way to move forward.

Settlement conferences are conferences handled by a judge or attorney where the two parties attempt to reach a settlement agreement. Settlement conferences can be mandated by California courts in an effort to see if the parties can reach some sort of agreement on their own – before taking the dispute into the courtroom.

Mediation and Arbitration

Two of the more widely known forms of ADR are mediation and arbitration. Both have significant benefits to small businesses because they offer an opportunity to resolve disputes without the time and expense of litigation. Additionally, because both processes are more formalized, they are more likely to result in a final outcome.

Mediation is a more directed and facilitated process than a neutral evaluation. In a mediation, an experienced mediator works with both parties to facilitate the resolution of a dispute. Rather than try to simply identify strengths and weaknesses, a mediator works with the parties to actively guide them to a middle ground that can serve as a final outcome and settlement of a matter.

Arbitration, by contrast, is the most formal of all ADR processes. In an arbitration, the parties present their cases to a formal arbitrator, or panel of arbitrators, in a process similar to a trial. The arbitrators can hear testimony and evidence, but the rules are far more relaxed than in litigation – and the ultimate outcome of the arbitration can be kept private, which helps protect business interests and trade secrets.

Advantages of ADR For Small Businesses

The primary advantages of ADR for small businesses are that these processes help to keep costs down, minimize the time and effort put into dispute resolution, and facilitate parties in working toward a more collaborative outcome than allowed in a courtroom.

This, in turn, ensures that small businesses can focus on the work that matters most to them by moving past disputes as quickly as possible. Moreover, to the extent that litigants hope to maintain some semblance of a relationship after a dispute is over, ADR helps to minimize adversarial feelings and the personal attacks that are often the hallmark of litigation.

California Attorneys Working With You To Consider ADR Approaches

If you are a small business owner who is contemplating litigation, you may want to consider whether options such as mediation or arbitration will allow you to accomplish your goals with less time and expense. At CKB Vienna LLP, our business litigation attorneys can walk you through various ADR options and help you evaluate what might work best for you. For more information, contact us online or at 909-980-1040.

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What’s In the Water? Cannabis Cultivators and Water Resources

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What’s In the Water? Cannabis Cultivators and Water Resources

Business Law Attorneys Helping Cannabis Cultivators in San Bernardino

For the last several years, California has been under constant threat of drought and water scarcity, causing many policy changes in the state and efforts to curb water usage. With the passage of new laws in 2016 legalizing the cultivation and sale of marijuana in the state, environmentalists and water advocates have become understandably concerned about how this will impact California’s water resources.

In response to these concerns, Governor Jerry Brown enacted Senate Bill 837. This bill added important environmental protections to the Marijuana Cannabis Regulation and Safety Act (“MCRSA”), and charged the California Water Resources Control Board with enacting regulations to protect the environment and conserve water.

In October 2017, the Board issued a Cannabis Cultivation Policy that addresses water conservation and steps that cannabis cultivators must take before becoming licensed by California.

Water Resource Protections

Under the MCRSA and the Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”), cannabis cultivators may only become licensed if the Board determines that their cultivation will not have a negative impact on water resources. This requires evaluation of three factors:

  • Whether the water diversion of the cultivator, and any associated discharge, affects instream flow needed for fish spawning, migration, and rearing

  • Whether the cultivator’s business affects springs, riparian habitats, wetlands, or aquatic habitats

  • Whether the cultivator impacts fish or wildlife habitats, or water quality

Cannabis cultivators are also required to follow all of the provisions of the California Water Code. The Board has also placed extra focus on the discharge of possible pesticides and herbicides from cannabis cultivators and requires cultivators who are seeking a license to put plans in place to address issues such as fertilizer runoff, petroleum product use, water storage and use, irrigation runoff, and disposal of any waste products created through cannabis cultivation.

Regulation of Cannabis Cultivators and Water Resources

Under the Board’s new Cannabis Cultivation Policy, the state of California has been divided into fourteen regulatory regions. Nine of those regions are prioritized for higher levels of regulation and monitoring due to their proximity to regions that support salmon populations.

Cannabis cultivators will face increasing regulation based on whether the cultivation is for personal use, indoor commercial cultivation, or outdoor commercial cultivation. Large scale cultivators wishing to acquire regular access to water will be required to go through California’s process of establishing legal water rights.

California Attorneys Advising You on Cultivation and Water Protection

California regulators take their environmental responsibilities very seriously. With the challenges of increasing population and water scarcity, regulation of cannabis cultivation requires that cultivators acknowledge the impacts that they may have on California’s resources and work to minimize them.

If you are an individual or business considering cannabis cultivation and are wondering what requirements you will need to meet under the California Water Resource Control Board’s new policy, the cannabis attorneys at CKB Vienna LLP may be available to assist you. To schedule an initial consultation,contact us online or at 909-980-1040.

 

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Understanding Indemnification Rights

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Understanding Indemnification Rights

Indemnification Attorneys Serving San Bernardino 

Usually when an individual commits a tort or violates a contract, that individual is solely responsible for his or her actions. In employment contexts, however, complicated issues of employer and employee liability arise. For example, perhaps an employee is sued for following employer policies, or for an accident that happens while on the job.

In these situations, employers are sometimes required to defend lawsuits on behalf of employees and even pay their costs for attorney fees. This is known as indemnification.

Indemnification in California

Under California law, employers must indemnify their employees, and defend them in court, if the lawsuit against the employee is brought for actions that occurred in the scope of the employee’s employment. Under the California Labor Code, this means that employers must pay for an employee’s lawsuit expenses where the lawsuit was a result of the employee doing his job or following the orders of his superiors.

California’s laws are particularly strong in protecting the rights of employees to indemnification. Indemnity cannot be waived by contract and an employer who attempts to deny an employee the right to indemnity can face a lawsuit for interfering with the employee’s economic rights.

What Constitutes The Scope of Employment?

California employees are only entitled to indemnification when they are acting within the scope of their employment. While the scope of employment can be broad, it does not mean any action that occurs during a work day. For instance, if an employee has a car accident while off on a lunch date with a friend, that will not require indemnification.

Scope of employment is generally defined as any actions taken as a part of an employee discharging his or her duties as required by the employer, or any additional action taken specifically at the behest of the employer. Thus, if an employee doesn’t typically deliver goods to customers but is asked to do so by an employer, this would still fall within the scope of employment.

It is important to note that indemnification does not apply to independent contractors. It is a right that is only available to employees in California, even though independent contractors may work on behalf of an employee. This can have significant ramifications for independent contractors who are sued while doing work on behalf of another.

But What About Unlawful Conduct?

One exception to the rule of employer indemnification arises when employees engage in conduct that is unlawful and they know it is unlawful. In these circumstances, an employer is not required to defend its employee or pay legal bills.

The most important aspect of this exception is determining whether the employee knew his or her conduct was unlawful. If an employer asks an employee to deposit checks at a bank for purposes of money laundering, but the employee does not know that he or she is engaging in money laundering, this is not an exception to indemnification.

By contrast, if an employee is dealing drugs at work and is arrested for doing so, he or she obviously knows that the conduct is unlawful and the employer is not obligated to indemnify.

California Labor Attorneys Helping You Determine Your Indemnification Rights

If you are an employee who has recently been sued on the basis of actions that occurred during your time at work, and were done at the direction of your employer, you may be entitled to indemnification. Likewise, if you are an employer whose employees are facing a lawsuit, determining your indemnification obligations is of the utmost importance.

At CKB Vienna LLP, our employment law attorneys can help you evaluate whether the lawsuits arise from the scope of employment and, if so, if any special exceptions apply. For more information, contact us online or at 909-980-1040.

 

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Eminent Domain: How To Protect Your Property

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Eminent Domain: How To Protect Your Property

Eminent Domain Lawyers Serving all of San Bernardino

Occasionally in California and other states across the country, officials undertake large scale construction and public works projects that require the acquisition of private land. For instance, a road may need to be widened or public utilities placed underground.

In these circumstances, states can obtain the private land that they need through the process of eminent domain – which is the power of government to take private land for a public purpose as long as just compensation is provided. In California, eminent domain happens on occasion and all property owners should be aware of their rights during this process.

Instituting an Eminent Domain Action

Under California law, before property can be obtained through eminent domain, the governmental agency seeking to obtain the property must first adopt a public resolution of necessity indicating that it needs the land for some public purpose. This resolution of necessity must be passed at a public hearing and can only be adopted if the government can show:

  • The project for which the government seeks the land is a necessary project

  • The property at issue is necessary for the project

  • The project location offers the most public benefit with the least private impact

  • An offer to purchase the property has been made

As part of the above four steps, the governmental agency is required to conduct an appraisal of the property that it would like to obtain, and make an offer to the property owner consistent with that appraisal. An agency may not offer the property owner substantially less than the property is worth. If the property owner refuses, the agency may institute an eminent domain action in court.

Obtaining Property Through Court Action

Assuming the governmental agency has obtained the necessary resolution of necessity, a court proceeding over eminent domain is rarely about the acquisition of the land itself. Governmental agencies have the power to obtain the land that they need from private individuals as long as they pay just compensation for such land. Thus, most litigation centers on what is just compensation.

In litigation, a private landowner may argue that the government has refused to pay the actual value of the property sought, or is trying to undercut the owner. In court, a judge will typically retain independent appraisers to consider the property at issue and make a determination of the fair market value of the property.

Fair market value is defined as the highest market value that a seller would be willing to sell at when under no particular urgency to sell, and which a buyer would be willing to pay when under no particular urgency to purchase. Based on the fair market value determined by the appraisers, the court will try to reach a settlement between the government and the private landowner.

If a settlement cannot be achieved, a jury will be tasked with determining the amount of compensation that the property owner is entitled to. The government will then be required to pay the jury’s final judgment amount within thirty days of the judgment being rendered. After the judgment is paid, transfer of title in the property can be given to the governmental agency.

California Attorneys Ensuring Just Compensation For Your Property

While California private property owners do not always have the right or ability to avoid an eminent domain acquisition of their property, they can request that full and just compensation be paid. If you feel that the government is trying to buy you out for less than your property is worth, the real estate attorneys at CKB Vienna LLP may be available to help. For more information, contact us online or at 909-980-1040.

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Get In Line: Obtaining A Temporary Cannabis Business License

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Get In Line: Obtaining A Temporary Cannabis Business License

San Bernardino Business Attorneys Assisting Businesses Obtain a Cannabis License

In November 2016, California’s marijuana laws underwent a drastic change through the adoption of Proposition 64, also known as Adult Use of Marijuana Act. Under the Act, California legalized the use of marijuana, allowing individuals over 21 to possess up to an ounce of marijuana and use it in their own home.  

In conjunction, California made a decision to work towards a system of institutions and regulations that would allow for the sale and use of marijuana in a safe and effective manner. In June 2017, California passed a new bill to create the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), which created a single regulatory system to govern the cannabis industry in California.

What’s For Sale?

While California’s new laws immediately allowed for individuals to legally consume marijuana, they did not automatically create structures for the legal sale of marijuana. Instead, the law provided that the regulation and enforcement structures necessary for the sale of marijuana would be set up over time, with the official issuance of licenses to begin in January 2018.

As part of that structure, the Bureau of Cannabis Control was set up to develop regulations for adult-use of cannabis in California – and to license and regulate retailers and distributors of cannabis.

On September 22, 2017, the Bureau of Cannabis Control announced that it would begin issuing temporary 120-day licenses for the sale of cannabis in advance of the January 2018 date.

Getting a Temporary License

Under the Bureau’s new program, businesses can apply for one of four types of cannabis business licenses: (1) distributor; (2) retailer; (3) microbusiness; or (4) testing laboratory. Businesses must also indicate whether they want an adult-use license or a medicinal license.

The first step to obtaining a temporary license from the Bureau is to get a local permit or authorization from the local jurisdiction where the business resides. The requirements for these types of local permits are being set up by individual jurisdictions, so businesses will need to consult with local government officials to determine the requirements for authorization.

Because many local jurisdictions are still in the process of adopting their own cannabis regulations, the Bureau has indicated that it will be flexible in considering varying forms of local authorization. They may even be willing to consider letters from local authorities indicating their approval of the proposed business until more formal measures can be adopted.

Additional Business Documentation

After a local authorization is obtained, the business must submit the authorization to the Bureau along with:

  • The name of the business

  • The owners of the business

  • Contact information for the business

  • Authorization for the use of land for cannabis purposes (such as a deed showing ownership of land or letter from a landlord)

  • A premise map detailing the proposed business layout

The Bureau anticipates that approval for the temporary licenses will happen by email and that successful applicants will be able to print their temporary licenses from home. After received, the licenses will be good for a period of 120 days and then renewable for an additional 90 days after that.

California Attorneys Assisting You in Applying for a Temporary License

If you are a business owner considering applying for a temporary cannabis license, or an entrepreneur interested in getting into the cannabis industry – it can help to have a law firm navigating local and state authorizations on your behalf. At CKB Vienna LLP, our cannabis attorneys will work with you to anticipate the Bureau’s temporary licensing and get your application to the front of the line. For more information, contact us online or at 909-980-1040.

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Buying an Existing Business in CA? Make Sure to Consider Your Exposure to Successor Liability

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Buying an Existing Business in CA? Make Sure to Consider Your Exposure to Successor Liability

If you are contemplating buying a business in California, either by purchasing an existing business or by purchasing the assets of a business, there are many factors you must consider and evaluate before you make the deal. One of these many important considerations includes the potential exposure to liability that your business, as a successor, will face.

As is the case with many of California’s corporate laws, its laws regarding successor liability are much broader than similar laws in other states. Because this area of corporate law is complex and imposes many obligations on both sellers and buyers, it is very important to consult with an experienced corporate attorney who specializes in the purchase and sale of businesses, asset sales, mergers, and acquisitions.

At CKB Vienna LLP, our labor and employment attorneys routinely help many of our clients acquire other businesses (through a variety of mechanisms). We understand the potential risks associated with successor liability. Therefore, we take many steps to mitigate our clients’ exposure to such risks before the purchase and sale of a business takes place.  

What is Successor Liability?

Successor liability refers to any liability imposed upon a successor business resulting from the debts and liabilities of the predecessor. In other words, the purchaser (referred to as a successor) may be held liable for the debts of the seller (referred to as a predecessor).

Mechanisms to Avoid Successor Liability

There are a few possible options available to business owners who wish to purchase an existing business without incurring successor liability:
 

  • The purchaser may create a separate subsidiary to purchase the business.
     

  • The purchaser may contractually shift liability to the seller by including very specific legal provisions in the purchase agreement.
     

  • The purchaser may purchase only the assets of the seller rather than the entire business. (However, this does not always prevent successor liability).

Successor Liability to the Government

Government debts (i.e., TAXES) are a major exception to the general rule that purchasers do not automatically assume the debts of the seller in an asset purchase. The purchaser (including shareholders) can find itself liable for full payment of the predecessor’s outstanding tax obligations.  Therefore, it is important for the purchaser to take preventive measures to avoid being on the hook for the predecessor’s tax bills and any other government debts.
 

  • To this end, one option for a purchaser is to request a reduction in purchase price by the amount owed by the predecessor to the government. In other words, the purchaser seeks reimbursement for paying the predecessor’s government debts, which can include:

    • Owed contributions to the California unemployment compensation disability fund, employment training fund, and the unemployment fund, plus the amount of any penalties and interest
       

    • Income and franchise taxes, plus the amount of any penalties and interest
       

    • California sales and use taxes

 

  • In many cases, the purchaser’s decision to purchase a business may be contingent upon whether there is any successor liability for government debts, and/or the amount of  any and all outstanding debt obligations.
     

  • Regardless of how a purchaser feels about outstanding tax liabilities that may exist,  the purchaser must conduct due diligence and should request confirmations from all relevant government entities that the business has satisfied all debt obligations. If government debts do exist, the purchaser needs to know the accurate and up-to-date value of all outstanding debts.

Experienced Employment Law Attorneys in Southern California

At CKB Vienna LLP, our corporate attorneys specialize in helping business owners identify the risks associated with purchasing a target business, and successor liability. More importantly,we work with businesses to craft and implement various strategies to mitigate these risks.

To learn more, contact us today by calling 909-980-1040 or filling out our short online form. We have locations in Rancho Cucamonga, San Bernardino, and Los Angeles – for your convenience.

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What California Employers Need to Know about At-Will Employment

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What California Employers Need to Know about At-Will Employment

The State of California provides many substantial protections for workers pursuant to its labor and employment laws, including a minimum wage and paid overtime that are both more generous than mandated by federal law.

What is At-Will Employment?

The California Labor Code is made up of many “employee-friendly” laws designed to promote and protect the important employee interests. However, the Code also contains some state laws that provide employers with important protections. One example is the state’s law regarding at-will employment. Specifically, the California Labor Code provides that:

“An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.”

In other words, the law presumes that an employment relationship between a California employer and employee is, by default, an at-will employment relationship. This enables either party to terminate the employment – at any time for any reason – or for no reason at all.

Terminating an At-Will Employee

From an employee’s perspective, at-will employment provides an easy, no-strings-attached way to quit a job. However, it also means that an employer can terminate an employee just as easily. It is easy to see how the at-will employment law does not provide employees with the level of protections found in California’s other labor laws.

Employer Benefits

The at-will employment structure clearly favors employer interests::
 

  • It provides employers with the freedom to terminate an at-will employee without cause (i.e., for no reason)
     

    • This is a very important for employers because “cause” has a specific meaning in the context of California employment law. It is defined as “a fair and honest cause or reason, regulated by good faith on the part of the employer.”
       

    • Because employers do not have to prove cause when terminating at-will employees, they are relieved of a significant legal burden.

    • More specifically, at-will employment means that a terminated employee cannot sue an employer for breach of implied contract based on cause.

 

  • It is important to note that while employers can terminate at-will employees for any reason or for no reason, employers must still comply with all federal, state, and local laws prohibiting discrimination and retaliation.
     

    • Employers must also comply with labor laws by paying employees for earned overtime, unused vacation, etc.

Exceptions to At-Will Employment

As mentioned, California presumes that an employment relationship is at-will. However, there are many exceptions that can overcome this presumptions, including the following:

 

  • Employees who have written employment contracts that require good cause and/or specific procedures for termination
     

  • Employees hired for a specific term of employment, such as a specific number of years
     

  • Employees covered by collective bargaining agreements that require just cause and due process prior to termination  
     

  • Public-sector employees protected by various civil service laws and/or union-agency agreements that cover termination
     

  • Employees whose employers - through their words and/or actions - overcome the presumption of at-will employment
     

    • One example would be an employer-established process and protocol that must be followed prior to termination  
       

    • Another example is an employer’s assurances that an employee has long-term employment status

Preserving At-Will Employment

Certain steps that employers can take to ensure they preserve at-will employment (and the benefits associated therewith) include the following:

  • Include an at-will employment notice on all employment applications and job offers

  • Require employees to sign an acknowledgement of at-will employment prior to starting work

  • Train managers to refrain from making any statements to job applicants and employees that could be construed as an “assurance of long-term employment” or a guarantee of work

  • Include an at-will employment notice in employee handbooks

 

Our firm offers risk mitigation advice to employers wishing to avoid litigation. We also provide representation to employees being asked to sign employment contracts affecting their at-will status.

Experienced Employment Law Attorneys in Southern California

At CKB Vienna LLP, our labor and employment attorneys specialize in helping employers craft and implement various strategies to create and preserve at-will employment. We also represent employers in matters where at at-will employment relationship is challenged by employees.  

To learn more, contact us today by calling 909-980-1040 or filling out our short online form. We have locations in Rancho Cucamonga, San Bernardino, and Los Angeles – for your convenience.

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Things To Remember Before You Hire Your First Employee (and Every Employee After That!)

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Things To Remember Before You Hire Your First Employee (and Every Employee After That!)

Hiring your first employee can be exciting and daunting at the same time. The fact that need to hire an employee means that your business is growing - which is great. It also means that you become someone’s boss, a role that comes with many responsibilities and duties. Your new legal status an employer subjects you to many rules and regulations (state and federal) that you did not have to worry about when you were a one-man show.

As with any business decision, there are financial and legal risks associated with becoming an employer. However, you can drastically minimize your exposure to potential risks by following the rules - always. To that end, you first need to know the rules. Then you need to know how to best follow these rules so that you do not fall into any traps. With this in mind, one can see how important it is to consult with an experienced employment attorney before you interview potential candidates – and certainly before you hire someone.

Factors to Consider Before Forming your First Employer-Employee Relationship

There are many factors you should consider before you hire your first employee - from both a business and legal standpoint. Once you make the decision to go for it, your legal responsibilities as an employer kick in right away and you need to be ready!

To that end, we have compiled a brief sampling of a few important things you should remember before you say, “You’re Hired!”

  • Confirm Employment Eligibility
     

    • ***Note: When completing Form I-9, the employee attests, under the penalty of perjury, that he or she is eligible to work in the U.S.; and the employer (or authorized representative for the employer) attests, under the penalty of perjury, that he or she physically examined the appropriate documents.

  • Find and Purchase the Necessary Insurance Coverage
     

    • Except in a very limited number of circumstances, the State of California requires employers to maintain adequate workers’ compensation insurance coverage and unemployment insurance coverage.
       

    • An employer may face severe administrative penalties if it does not have these insurance coverages in place, or if the insurance policies are insufficient.  If an employee becomes entitled to workers’ comp or unemployment benefits - and the employer does not have insurance coverage to pay these benefits - the employer must pay for all expenses out of their own pocket. This is not a good situation for any employer.

  • Collect & Remit Taxes to the IRS & The State of California

    • Payroll taxes, such as federal income tax, Medicare, Social Security, California income tax, etc., do not magically withdraw themselves from an employee’s earnings. Instead, an employer must calculate the correct amount to withhold before issuing payment to the employee.
       

    • Employers must then deposit the withholdings as directed by the IRS and the State of California and file the associated tax returns.
       

    • Don’t forget to calculate and deposit the amount of payroll tax that you, as an employer, must pay to the various tax agencies.

The list of responsibilities you undertake when hiring your first employee can certainly seem intimidating. Yet, with a good employment attorney by your side, you can take this next step in your career with confidence.

Experienced Employment Law Attorneys in Southern California

At CKB Vienna LLP, our labor and employment attorneys specialize in helping soon-to-be-employers navigate the legal maze of state and federal rules and regulations that apply in specific situations. We work with employers to substantially minimize their exposure to liability by creating and implementing legally-compliant strategies and policies.

We know that hiring your first employee is a professional milestone for you and your business. We want you to be in the best position to follow the law while you focus on running your business.  


To learn more, contact us today by calling 909-980-1040 or filling out our short online form. We have locations in Rancho Cucamonga, San Bernardino, and Los Angeles – for your convenience.

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Refresher Course: A Few Important Wage and Hour Rules That Employers Need to Remember

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Refresher Course: A Few Important Wage and Hour Rules That Employers Need to Remember

Successful California business owners readily admit that ensuring compliance with all applicable laws, rules, and regulations is much more than just good business practice. Rather, it is an essential component of business operations. So much so, that a business can succeed or fail based solely on its level of commitment to regulatory compliance.

A Quick Refresher for Employers

California businesses with employees must adhere to all of the “regular” regulations PLUS the state’s complex and vitally-important wage and hour rules. Businesses subject to this intricate regulatory framework need to know:

  • what rules apply,

  • what the rules mean,

  • what the rules require (and/or prohibit), and

  • what penalties are possible in instances of noncompliance.

The stakes are very high. The rules and regulations are difficult to navigate. This combination makes it vitally important that employers seek legal counsel as early in the process as possible. Work with an experienced and reputable employment lawyer who stays current on developments in the law, and who understands your goals as a business owner and employer.

Some of the important issues that an employment lawyer can help you handle include the laws and regulations governing:

  • How and when employees must be paid

  • Specific benefits and break times that employees are entitled to receive

  • The sorts of conduct and behavior that employers must never engage in with employees, or perform around employees

  • And so much more

We have compiled a few of California’s important wage and hour laws that you, as an employer, should know (and not forget!)

  • Minimum Wage Rules:
     

    • Employers With 26 or More Employees:

      • Beginning January 1, 2017, California increased the minimum hourly wage for employers with 26+ employees to $10.50. This amount will increase by an increment of $0.50 every January until the minimum wage reaches $15.00 in January 2022.
         

    • Employers with 25 or Less Employees:

      • The annual increase in the minimum wage for this group of employers will not begin until January 1, 2018. The current minimum wage of $10.00 will increase by an increment of $0.50 annually until a minimum wage of $15.00 is reached.

    • ******Note: Some cities in California (such as Los Angeles and San Diego to name a couple) have established a minimum wage that is higher than state-ordered minimum wage. Make sure you know if your city has such an ordinance.

  • Workers Doing the Same Job: PAY THEM THE SAME!

    • California’s Equal Pay Act established regulations prohibiting employers from paying lesser wages to a particular employee who performs the same job as another employee based solely on gender.

    • In 2015, the state legislature enacted The California Fair Pay Act, which expanded the scope of the Equal Pay Act by mandating employers to pay an equal amount of wages to those employees who perform substantially similar work (rather than just the “same” work).

  • Overtime Rules
     

    • California’s rules on overtime apply to all non-exempt employees over the age 18 (and in some circumstances, 16- and 17-year olds).

    • California’s approach on overtime compensation is distinct from those of other states as well as the federal government because California has enacted a daily overtime rule as well as a weekly overtime rule.

      • All employees (non-exempt that is) are entitled to overtime pay if they work more than 40 hours in a week OR if they work more than eight hours per day.

      • California’s established rate of overtime pay is 1 ½ times the rate of regular pay.

Experienced Employment Law Attorneys in Southern California

At CKB Vienna LLP, our labor and employment attorneys specialize in helping employers become compliant - and remain in compliant - with applicable laws such as the Golden State’s all-important and ever-so-complex wage and hour laws. Our goal is to get your business to where it needs to be in order to avoid penalties, fines, or any other problems. Our proactive approach focuses on preventing problems before they arise.

However, despite best efforts, you may find yourself faced with claims of noncompliance by the government or subject to a lawsuit by an employee. We have the experience and track record to help. To learn more, contact us today by calling 909-980-1040 or filling out our short online form. We have locations in Rancho Cucamonga, San Bernardino, and Los Angeles.

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Senate Aims to Protect the Youth of California By Banning the Use of Branded Merchandise in Cannabis Advertising

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Senate Aims to Protect the Youth of California By Banning the Use of Branded Merchandise in Cannabis Advertising

It does not appear that advertising restrictions faced by cannabis businesses along the West Coast and elsewhere will lighten up any time soon. Recently, both Washington and Oregon passed legislation prohibiting businesses from advertising cannabis through the use of mascots and roadside mannequins, respectively. Moreover, California is well on its way to passing the most restrictive advertising legislation yet.

Life Cycle of SB 162

  • In early 2017, California Senator Ben Allen introduced SB 162, a bill directly addressing the marketing of cannabis.

  • In June, the Senate unanimously passed SB 162.

  • Thereafter, the bill underwent the amendment process.

  • On September 1st, the Committee on Appropriations held a hearing on SB 162.

  • Currently, the status of SB 162 remains “in committee process.”

SB 162: What it is and Why it’s “Necessary”

The advertising restrictions set forth in SB 162 prohibit California businesses and individuals from “all advertising of cannabis or cannabis products through the use of branded merchandise, including, but not limited to, clothing, hats, or other merchandise with the name or logo of the product.”

California lawmakers cite a number of reasons that explain the rationale for creating and supporting SB 162, including the following:

  • The RAND Drug Policy Research Center determined “that a comprehensive ban on advertising through branded merchandise by persons and companies licensed to sell cannabis can be a justified public health approach.”

  • The American Academy of Pediatrics issued a recommendation that the government should impose a “comprehensive ban on advertising through branded merchandise by persons and companies licensed to sell cannabis.”

  • Evidence suggests a direct link between tobacco companies’ now-prohibited use of branded merchandise and teenagers’ increased use of tobacco and alcohol. It therefore follows that California must similarly ban cannabis businesses from advertising through the use of branded merchandise.

  • In 2010, a federal court concluded that a ban on the use of branded merchandise by tobacco companies was legal because the government has a “substantial interest in reducing youth tobacco use. The court also agreed with the government’s finding that even when branded merchandise is provided solely to adults, “there is no way to limit the distribution of these items to adults only.”

    • The California legislature believes that if legally challenged, the court will conduct a comparable legal analysis and make similar findings regarding the use of branded merchandise by cannabis companies - ultimately confirming  SB 162 is necessary and enforceable

Opposition to SB162

Despite the Senate’s eloquently-described rationale behind SB 162, the California Cannabis Industry Association argues that the bill creates a fear-based, unnecessary, and misguided ban on branded merchandise that:

  • Will not result in a decrease in underage marijuana use as implied by the Senate.

  • Will result in significant damages to small cannabis businesses.

Practical Effects of SB 162 on California Cannabis Businesses

Assuming SB 162 maintains its current trajectory towards the top, it will not be long before state law officially prohibits California businesses and individuals from “all advertising of cannabis or cannabis products through the use of branded merchandise . . .”

As a result, the extensive ban on branded merchandise will create the biggest problems for the state’s small and medium-sized cannabis businesses. Why? Because these players heavily rely upon the use of branded-merchandise marketing to hopefully establish a unique (and memorable) identity that just might stand out in a rapidly-growing and crowded marketplace.

Questions About SB 162 and Its Impact On Your Business? Speak to a Knowledgeable California Cannabis Law Attorney Today

California’s young but rapidly-growing cannabis industry is subject to a continually changing legal landscape. The biggest example of this is the recent repeal of Proposition 64, quickly followed by the newly-enacted MAUCRSA. In other words, California’s cannabis businesses are subject to rules and regulations that may or may not apply on any given day.

At CKB Vienna LLP, we have significant experience creating effective legal strategies to help our cannabis business clients prepare for known, upcoming changes to relevant laws and regulations. We also have extensive experience helping clients manage and resolve urgent matters caused by unexpected, sudden, and/or forgotten changes in one or more important and applicable laws.

With the passage of SB162 looming, it is important for cannabis business owners to plan accordingly. It may become necessary to implement changes to business plans, marketing campaigns, advertising strategies, and other business decisions. Let us help you proactively approach the possible scenarios you may face in light of the proposed bill.

Talk to the experienced attorneys at CKB Vienna LLP today. Call one of our three offices to schedule a consultation, or contact us using this short online form.

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The California Cannabis Industry: Not Immune to Claims of Product Liability

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The California Cannabis Industry: Not Immune to Claims of Product Liability

California business owners that are in any way involved with putting goods and products in the hands of consumers - know all too well that products liability lawsuits are costly, time consuming, and extremely bad for business. The fallout can ruin a company’s reputation in a matter of days; and many companies never rebound from the damage.

A Costly Misunderstanding

Some cannabis business owners are operating are under a faulty assumption. Since cannabis products for medicinal and recreational uses remain federally illegal, they believe that they are free from FDA oversight and thus immune to product liability lawsuits. This is a misconception that could prove very costly.

It is true that, currently, the FDA’s role in marijuana regulation is limited to clinical and scientific research. Moreover, the FDA specifically states that the agency “has not approved any product containing or derived from botanical marijuana for any indication. This means that the FDA has not found any such product to be safe or effective for the treatment of any disease or condition.”

However, cannabis operators are still subject to product liability lawsuits based on state claims of dangerous, defective, and/or mislabeled products - California included. Therefore, it is prudent for businesses (including retailers, suppliers, distributors, and manufacturers) to recognize and remain mindful that their exposure to these legal claims not only exists, but may become prevalent in this very young industry.

What Can California Cannabis Business Owners Do To Minimize Exposure to Product Liability Lawsuits?

As cannabis operators become subject to the plethora of regulations imposed under California’s newly-enacted MAUCRSA, one important and highly-advisable plan of action that affected businesses can undertake is to establish sufficient product recall plans now, rather than later.  

Important Components to a Successful Product Recall Plan

At CKB Vienna LLP, we help businesses develop and craft comprehensive product recall plans that our clients can readily set into motion if ever necessary. You should contact our firm before drafting a product recall plan and even moreso if you are ever faced with a potential claim.

Some very general and basic components that your business should incomporate into any product recall plan include the following:

  • The creation of a general, overarching strategy

  • The creation of consistent definitions and classifications of various types of recalls (including scopes and depths)

  • The formation of a committee - led by a responsible and experienced member of the business - responsible for comprehensively and consistently examining and investigating product complaints. This same committee can then trigger the recall plan if necessary

  • The creation of an accurate and current distribution list - containing consumer, supplier, and vendor names, contact information, and dates of purchase - that can be accessed easily and quickly

    • This list is useless and potentially harmful if outdated and/or incomplete

  • Creation of a list of options for isolating potentially-unsafe products

  • FIRM INSTRUCTIONS TO CONTACT YOUR LEGAL COUNSEL BEFORE ISSUING ANY STATEMENTS OR RESPONDING TO ANY COMMUNICATIONS REGARDING CLAIMS!!!!!

  • Recording and documenting everything that you read, hear, see, do, and say from the moment anyone in the business becomes aware of a potential claim

CKB Vienna LLP—Experienced Commercial Law Attorneys and Advisors That Can Help Your Cannabis Business Minimize Your Exposure to Product Liability Claims

Numbers of California cannabis operators are beginning to experience the benefits associated with the growing industry of recreational marijuana. However, as with all business ownership and operation, there are inherent risks when manufacturing, distributing, supplying, selling, and otherwise making products available to public consumers. Therefore, prudent and proactive business owners turn to experienced commercial attorneys to minimize these risks.

For years, CKB Vienna LLP has helped businesses develop product recall plans and protocols. We also have significant experience working with and helping our cannabis-business clients with a number of legal matters specific to the unique cannabis industry. A thorough understanding of the applicable rules and regulations is essential in this continually-changing area of law; and we pride ourselves in staying abreast of all trends and developments.  Let us help you plan for the future. Contact us today.

We have offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone—909.980.1040—or complete our online form.

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California Approves VW’s Plan to Expand Clean Vehicle Infrastructure Around the Golden State

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California Approves VW’s Plan to Expand Clean Vehicle Infrastructure Around the Golden State

It is hard to believe that it has been two years since the infamous Volkswagen emissions scandal quickly spread across news media outlets across the world.

Specifically, in Septmber 2015, the U.S. E.P.A. issued a Notice of Violation to VW alleging that the European car company manufactured and installed a type of technology known as “defeat devices” on the company’s diesel models. As the name suggests, the defeat devices were  designed to defeat emissions tests by displaying better, cleaner results than actually scored.

Additionally, VW sold thousands of diesel-model cars to American consumers - advertised as “Clean Diesel,” but which were, in fact, anything but clean.

Fast forward to Summer 2017:

Late last month, and by unanimous vote, the California Air Resources Board (the “Board”) gave the greenlight to VW to spend 30 months and $200 million (the 1st distribution of an $800 million settlement) throughout the State. The $800 million deal with California is just one part of a greater $2 billion settlement that VW reached with federal authorities.

Infrastructure & Repairs

Infrastructure

As part of the deal,

  • VW agreed to a build clean and green, zero-emission vehicle infrastructure throughout California.
     

    • This includes installing $45 million worth of greater than 350 electric charging stations across the state, including in the following cities:

      • Fresno

      • Los Angeles

      • Sacramento

      • San Diego

      • San Jose

      • San Francisco.

    • VW must also continue to work to expand ridesharing.
       

    • VW hopes to spend $75 million on a highway-charging network of more than 50 stations

  • Moreover, Electrify America, the Division of VW handling this matter, stated to the Press that VW hopes to spend “35% of investment funds” in disadvantaged areas of California, including charging stations, access to ultra-clean vehicles, and public outreach.

Repairs

Since California approved the deal between VW and the State, VW can only just now notify consumers that VW representatives are available at dealerships to correctly modify the emissions controls.

  • VW will offer owners of the specific models at issue the option to keep their vehicle– with the repairs fully made – or to have it bought back.

  • The modifications approved by California include hardware as well as software changes.
     

  • During the modification process, the company will uninstall the defeat device program. They will then install the correct software program that properly regulates the emission controls.
     

  • VW will also replace hardware components that relate to certain other emission control system hardware.

Questions Regarding Volkswagen’s Plans Throughout the State? Contact Us Today!

For years now, CKB VIENNA LLP has represented all sorts of businesses and individuals regarding green business practices, and regulatory actions that directly impact our clients’ lives and livelihood.  Our team understands the complexity of the issues and stands ready to represent you aggressively. We have offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone – 909.980.1040 – or complete our online form.

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New Employer Notice Requirements in California: Employee’s Domestic-Violence Related Rights

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New Employer Notice Requirements in California: Employee’s Domestic-Violence Related Rights

Last September, California Governor Jerry Brown signed into law AB 2337, an employment related law that amended the State’s Labor Code.

Specifically, in enacting AB 2337, the California legislature recognized that many employees were woefully unaware of the domestic-violence related protections and rights currently afforded to them pursuant to Section 230 of the Labor Code.

What Are Some Domestic-Violence Related Employee Rights Provided by Section 230 of California’s Labor Code?

As one example, Section 230.1(a) of the Labor Code provides that:

. . .[A]n employer with 25 or more employees shall not discharge, or in any manner discriminate or retaliate against, an employee who is a victim of domestic violence, sexual assault, or stalking for taking time off from work for any of the following purposes:

(1) To seek medical attention for injuries caused by domestic violence, sexual assault, or stalking.

(2) To obtain services from a domestic violence shelter, program, or rape crisis center as a result of domestic violence, sexual assault, or stalking.

(3) To obtain psychological counseling related to an experience of domestic violence, sexual assault, or stalking.

(4) To participate in safety planning and take other actions to increase safety from future domestic violence, sexual assault, or stalking, including temporary or permanent relocation.

Another example is found in Section 230.1(c), which provides that:

An employee who is discharged, threatened with discharge, demoted, suspended, or in any other manner discriminated or retaliated against in the terms and conditions of employment by his or her employer because the employee has taken time off for a purpose set forth in subdivision (a) is entitled to reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, as well as appropriate equitable relief. An employer who willfully refuses to rehire, promote, or otherwise restore an employee or former employee who has been determined to be eligible for rehiring or promotion by a grievance procedure or hearing authorized by law is guilty of a misdemeanor.

The Notice Requirements of AB 2337: Informing Employees of Their Domestic-Violence Related Rights

In order to increase overall awareness of these employee rights and protections regarding domestic violence, AB 2337 amended Section 230.1 of the Labor Code to require that employers must inform each and every employee of these rights, in writing, upon hire and at any time upon request.

Additionally, AB 2337 directed that by July 1, 2017, the Labor Commissioner must develop and post a form that employers may use to comply and satisfy the relevant notice/disclosure requirements. Pursuant to the law, an employer’s mandate to comply with the notice requirements became effective only when the Labor Commissioner posted the new form.

The New Form

As ordered, the Labor Commissioner (i.e., the CA Division of Labor Standards Enforcement) published the form, “RIGHTS OF VICTIMS OF DOMESTIC VIOLENCE, SEXUAL ASSAULT AND STALKING”, in both English and Spanish.  These forms and others can also be found at the DLSE web page.

The law does not require a California employer to use the exact form published by the Labor Commissioner, but the form must be “substantially similar in content and clarity.”

Contact A California Employment Law Attorney Today

It is important for California employers to update their hiring procedures so as to include the new notice. If you have any questions regarding employer notice requirements, or any other labor employment matter, we are here to help.

Whether you are facing possible litigation, or whether you would like to make certain your business is compliant with current law, please contact us today to schedule a consultation with an experienced, knowledgeable California employment law attorney today.

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