Making Sure Your Charitable Donations Are Tax-Deductible

Attorney Helps Families Get Tax Deduction for Charitable Giving

Giving to charity is a wonderful way to help others as well as a wonderful way to feel great about how you are spending your extra funds. But it’s also important to note that giving assets to charitable organizations often results in significant tax deductions. Smart, sophisticated giving can not only help others, it can also help you manage your wealth.

While there are many strategies to sophisticated giving, the best place to start is simply by making certain that the donations you are making are tax deductible and then making certain that your donations are deducted on your taxes.

Determine That Your Organization is Eligible For Tax-Deductible Donations

Most nonprofit organizations can receive tax-deductible donations from individuals. However, the best way to determine if the cause you are giving to will result in a tax deduction is to visit the IRS’ Exempt Organizations Select Check website and using the search function. This search function will also tell you if the organization in question has had their exempt status revoked for some reason.

Note that some organizations that are eligible for tax-deductible donations are not listed in this database. This may include religious organizations (such as churches, temples, and mosques) as well as organizations that do business under a different name than the one they file taxes under.

In addition, note that donations to private individuals are not tax-deductible. This includes money you might give privately to someone in need or money you donate to many online fundraisers for individuals who need financial help. This doesn’t mean you shouldn’t make these donations, but keep in mind that you can’t deduct what you give in these circumstances.

Keep Organized Records of Your Donations

Often, a person will make charitable donations and then never list the donations on their taxes. Why? Simply because they did not ask for a receipt or they did not put the receipt in a safe place.

Whenever you make a donation of any size, make absolutely certain to get a receipt. This receipt should include the amount donated, the name of the organization, and the date. While you do not need to submit these receipts with your taxes, you should keep them on file in case of an audit and simply for organizational purposes. Consider making digital scans of your receipts to cut down on clutter and paper waste.

In some cases, you may make a charitable donation through your employer that is taken directly out of your paycheck. In these cases, make sure that hold on to your pay stubs or W-2 so that you have proof of your donations.

Optimize Your Charitable Giving: For Yourself & For Others

At CKB VIENNA, we have helped hundreds of individuals and families give smarter, from optimizing how much they give and how much they save on taxes, to creating sophisticated, meaningful donation plans for those who want to give after they are gone.

To learn more about how you can give smart, please contact us today to schedule a consultation with one of our knowledgeable, experienced California attorney.

Choosing the Right Successor For Your Family Business

Business Litigator Helps Family Businesses with Financial Planning

For many small businesses owners, their business is their biggest asset, and the most important thing that they will pass on after they are gone. But even though their business can mean everything financially - and even emotionally - many people don’t engage in the succession planning that will save their business in the case of an accident, illness, or untimely death.

One of the most important aspects of succession planning is choosing the person or people who will run your business after your time is over. It used to be that a business was passed from parent to oldest child, but a less traditional option may be better for your family and for your business, such as:

• A sibling

• A niece or nephew

• A more distant relative

• A close family friend

• An unrelated employee

Questions to Ask When Choosing A Successor for Your Family Business

• Who is passionate about your business? It’s normal to want to pick your oldest child, but you must keep in mind that the best person for the job is not necessarily the person who wants the job most. Who has shown interest in the business, and who is passionate about your products and/or services?

• Who has the skills to lead and manage? Your choice doesn’t have to know everything about your business yet, but he or she must have a love of learning and a certain set of base skills to be successful. Can they manage others? Are they independent? Can they think outside of the box when necessary?

• Who wants to stay in the area? You might have a child, sibling, or niece/nephew who has all of the right skills and who is passionate about the business, but who has other interests or goals. They might not want to stay in town and devote their life to what you have built. Choose someone who is comfortable choosing to carry on tradition.

Don’t choose a successor based on who you like best or who treats you best. Also don’t make a wishful choice, hoping that your successor will change or mature once the business is in his or her hands.

Involve Others in Your Choice

In a family business, it is common that family politics and emotions will be involved in your choice. In some cases, multiple people will want to fill your shoes, while in other cases, your family members may only agree to take the job out of a sense of obligation.

The best way to navigate all of these problems is to communicate openly and honestly about your business’ needs and your own wishes for the future. Your successor should not be surprised by his or her new role in the event of your incapacitation, death, or retirement. Rather, your successor should be told about your succession plans and educated in the months or years before the business is turned over.

Business Succession Planning for Family Businesses of All Sizes

Having a plan is always good for business. Having a business succession plan is vital to the survival of your family business and the financial security of your loved ones who are supported by that business.

It’s never too early to start planning, and it’s never a bad idea to have a plan in place in case of an emergency or accident. At CKB VIENNA, our California attorneys can make sure that your family business is prepared for change, whenever it comes. To schedule an appointment or to speak to a lawyer, please please contact us today.

Before You Sign A Non-Disclosure Agreement, Ask These Four Questions

Did you sign an nda? attorneys Weigh in on the matter

Non-Disclosure Agreements (NDAs), also known as confidentiality agreements, are increasingly common, especially at startups and tech companies. While many people make the mistake of quickly signing the documents without reading them (or after a quick skim), it is vital to closely read these documents. Not reading NDA contracts closely could mean not understanding the terms correctly and stumbling into litigation down the road.

Here are four questions you should ask as you are reading - and before you sign - an NDA.

Who does this confidentiality agreement involve?

Who is giving the information and who is receiving it? Or are both parties exchanging sensitive information? You can usually find this information under the parties of the agreement section. The party giving the information may be called the disclosing party, while the party receiving the information is the recipient.

It’s imperative to understand that other parties might also be involved. Are you able to share the information you learn with certain other parties, such as colleagues, affiliated businesses, or certain clients?

What information does this confidentiality agreement involve?

Obviously, not every word that the disclosing party says is confidential. What specific information is deemed confidential, and why? Is it a certain document, a specific project, or a company secret? Is certain oral information confidential?

Be aware that the entity creating the NDA will make terms as broad as possible to benefit their cause. Don’t be afraid to ask them to be more specific regarding what information is involved in the confidential agreement and what is free to share.

In most cases, an NDA excludes information that is public knowledge, information that the recipient figures out for themselves, or information that the recipient finds out from a third party who did not sign an NDA.

How long does the confidentiality agreement last?

If the NDA does not mention the terms of the agreement, you may wish to add them. With issues related to technology, most confidential information will be outdated in a few years. With new products, information will likely not need to remain confidential after the product launch. Don’t be afraid to ask for specific terms and to explain why you’d like them.

Is this confidentiality agreement appropriate?

Confidentiality agreements are becoming more common. In fact, in addition to having to sign NDAs when you begin work or when you are partnering with another business, don’t be surprised if you are also handed a confidentiality agreement before a big meeting or an interview. When are these agreement appropriate? That’s up to you to decide. But never forget that you can always ask for the details of the contract to be changed before you sign.

Contact A California Attorney Today

When it comes to important confidentiality agreements or NDAs, you may wish to review the contract with your attorney before signing. It can mean the difference between a smart business deal and a poor choice that could cost you time, money and your reputation.

To speak to an attorney in Southern California about writing or negotiating an NDA, please contact CKB VIENNA today.

Understanding the New Changes to California's Fair Pay Act

California Lawyer  and the Equal Pay Act

After multiple studies found that women make significantly less money than men do, equal pay has been a deep concern for many California residents, from working women to economists to legislators. Although a number of state-level equal pay laws have been on the books for many years, starting as early as 1949, a number of new laws have been passed recently in order to make certain that employers of all sizes are compensating their female employees fairly.

Let’s take a brief look at the history of equal pay laws in California as well as the two big changes that California Governor Jerry Brown signed into law in September and which went into effect in January 2017.

The California Equal Pay Act of 1949

California has taken steps toward equal pay for almost eight decades. In 1949, lawmakers created the California Equal Pay Act of 1949, which stated: "No employer shall pay any individual in the employer's employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs.”

While this was a good start, the law was not specific enough to actually result in equal pay for women. In fact, as of 2015, women in California were still only being paid on average 80 cents for every dollar that men were. It was soon clear that the state’s equal pay laws would have to become more specific to garner the needed results.

Fair Pay Act Expansion in 2016

Since 1949, a number of changes have been made to better ensure equal pay for equal work. In 2016, two big changes were passed by lawmakers and took effect in 2017:

First, employers can no longer use prior salary as a reason to pay women less than men. This is because using prior salary to determine current salary simply propels unfair wages for women further into the future, and gives businesses an excuse to offer less. From now on, different pay rates can only be based on factors like:

• Different levels of experience.

• Different levels of education.

• Different levels of knowledge and/or training.

• A difference in output quality.

• A difference in output quantity.

The second change is that all of the principles of the Fair Pay Act have been applied to cover salary or payment rate differences between members of different races or ethnicities. This change took place after research showed that women of different races, such as African-American women, were paid on average less than white women.

Consult With A Southern California Attorney Today

We should note that not all equal pay issues are due to the conscious bias of employers; rather, many equal pay issues are due to unconscious biases that are hard to correct without policies in place. For this reason, it is important that fair pay laws are in place and that employers comply with these laws completely.

At CKB VIENNA, we can make certain that your business is following every aspect of California’s equal pay laws, or that you are well-represented if faced with litigation related to an equal pay or fair pay issue. To learn more about our legal services, or to schedule a consultation, please contact us today.

Accommodating Medical Marijuana Use in California: Is it Required for Employers?

business litigators discuss employee use of marijuana 

Discussion surrounding California’s legalization of recreational marijuana has been intense since the passage last November of Proposition 64. A related issue – medical marijuana – has received much less attention, in spite of the fact that its use has been permitted, at least under some conditions, since 1996 when the California Legislature passed the Compassionate Use Act (CUA). One issue that comes up quite often is the extent to which an employer must accommodate an employee’s use of medical marijuana.

The Ross Decision

Generally speaking, under a 2008 decision by the Supreme Court of California (Ross v. RagingWire Telecommunications, Inc.), California employers need not accommodate a worker who has been prescribed medical marijuana. The Ross Court stressed that the CUA did not grant marijuana the same status as a legal prescription drug. After all, said the court, in spite of legalization for medical purposes in California, marijuana is still a Schedule I drug under the federal Controlled Substances Act. Its use and possession remain illegal under federal law.

The Court added that nothing in the text or history of the CUA suggested the measure was intended to address the respective rights and duties of employers and employees. The employer could take illegal drug use into consideration in making employment decisions. Under Ross, while an employer must consider the feasibility of making reasonable accommodations to a prospective employee with a disability, it need not go so far as accommodate a person’s medical marijuana use, even when the use was consistent with professional medical advice.

Random Testing for Safety-Sensitive Employment

Proposition 64 explicitly allows public and private employers to enact and enforce workplace policies pertaining to marijuana. When it comes to random testing, courts have generally upheld such testing regarding employees who work in safety-sensitive positions (e.g., transportation, heavy equipment, some construction work). Regarding employees whose duties place them in no particular peril, the courts have sometimes invalidated random testing.

Post-Injury Testing

Employers must be particularly careful with mandatory post-injury drug testing. Last year, the federal Occupational Safety and Health Administration (OSHA) published a final rule related to the tracking of workplace injuries and illnesses. While OSHA has indicated that nothing in the rule should be read to prohibit post-injury drug testing, the rule clearly states that mandatory post-injury testing can only be done where the testing can accurately identify impairment caused by drug use. Current testing methods regarding marijuana do not indicate the person’s level of impairment; they only show the presence of marijuana metabolites within the body. So, despite OSHA’s words to the contrary, most employers are being cautious regarding testing, except where there is an actual evidence of impairment.

Governor Brown’s Efforts to Clarify Law

Recently, Governor Brown released an extensive proposal to resolve the many differences between the state’s existing medical marijuana laws. Legal experts predict this will be an active area of discussion and legislation in coming months. As they say, “May we live in interesting times.”

Do Your Drug Policies Need Review?

Have you reviewed your policies regarding medical marijuana use? Do you employ drug testing of job applicants who receive offers of employment? Do you utilize random drug testing to test for the use of marijuana or other drugs among your employees? Do you maintain a zero-tolerance rule for drug use? Many prudent employers are currently reviewing their existing drug policies to ensure that they comply with the law. A number have sought the counsel of experienced attorneys like CKB VIENNA LLP. Our firm has represented all sorts of businesses over the years. 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 at 909.980.1040 or complete our online form.

Home Grown Marijuana: What are the Rules Following Prop 64?

Attorneys discuss legalized marijuana and its implications

Questions continue to spiral in California following the passage last November of Proposition 64, which generally legalized non-medical, recreational marijuana. The Adult Use of Marijuana Act (“AUMA”) does not allow businesses to grow, distribute, or sell non-medical, recreational marijuana until they get a state license. State issuance of such licenses won’t begin until 2018. In the meantime, is it ok to grow marijuana at home?

Home Cultivation is OK, With Some Limitations

Home cultivation is generally ok under the new law. California residents (who are 21 years old or older) can grow – without the need to obtain a license – up to six living marijuana plants indoors in a private residence that you own (e.g., home, apartment unit, mobile home, or other similar dwelling), subject to local laws relating to public health and safety. Those who want to grow marijuana at home should be aware of additional issues, such as the following:

•  Indoor cultivation can include plants grown within a greenhouse, so long as the structure is fully enclosed, secure, and not visible from a public space

•  Any marijuana produced in excess of 28.5 grams must be kept in a locked space not visible from a public place

•  Tenants may grow marijuana under the same conditions as owners, but a landlord does have the right to ban indoor cultivation of non-medical, recreational marijuana on the leased premises

•  Cities and counties may reasonably regulate indoor cultivation inside a private residence to reduce potential health and safety risks

•  Cities and counties may completely ban outdoor cultivation

Is a Hodge Podge of Local Regulation Ahead?

In spite of the fact that the AUMA legalizes recreational marijuana on a statewide basis, some Golden State residents are worried that they will become subjected to a hodge podge of local regulations. For example, according to one recent report, Montebello, Aliso Viejo, Fontana, Indian Wells, San Jacinto, and San Juan Capistrano have already approved laws regulating marijuana cultivation in their cities.

Some cities and towns may want to cash in on home grown marijuana with licensing fees. For example, Montebello’s ordinance requires a $249 fee for a permit to grow marijuana plants within a residence. Other municipalities claim they have safety issues in mind. For example, Whittier city council members have asked the city’s staff to draft an ordinance prohibiting marijuana home cultivation inside homes with small children.

Some proponents of Prop 64 are crying foul. They argue that the idea behind both the proposition and AUMA is to allow cultivation of up to six marijuana plants without restrictions, just as homeowners have the right to grow tomatoes or strawberries.

CKB VIENNA LLP – Experienced Attorneys and Advisors

Many individuals and businesses are intrigued by California’s roll-out of legalized recreational marijuana. They are concerned with the barriers and hurdles that lie ahead, particularly when it comes to taking commercial advantage of Prop 64. Navigating through a sea of regulations can be difficult. Prudent business owners turn to experienced attorneys like CKB VIENNA LLP for assistance. For years now, we have represented all sorts of businesses in many types of legal and regulatory environments. We have researched the technical requirements of Prop 64 and the myriad of other regulations that will have an impact on the sale of recreational marijuana in California. 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 at 909.980.1040 or complete our online form.

Zombie Foreclosure Numbers Decrease, Yet They’re Still a Problem for HOAs and Community Associations

attorneys discuss foreclosures and Home Owner Associations

National real estate experts indicate the number of “zombie” foreclosures – properties still in the foreclosure process that have been left vacant – is down, particularly when compared to a few years ago. Experts in states like California point to the decline in zombie foreclosures as further evidence that the housing market has weathered the storm of the subprime crisis.

Yet, in those situations in which the distressed property is part of a homeowner’s association (HOA) or other community maintenance group, problems remain. Unpaid assessments continue to mount and the property often deteriorates. What can be done? While generalizations are always difficult when discussing real estate, some common points can be offered.

Zombies Are Often the Product of Extreme Caution

For HOAs and other groups, a first step in dealing with zombie foreclosures is to understand their origin. Zombies are most often the product of caution on the part of the lender. After being criticized for moving homeowners through the foreclosure process too quickly, some lenders have taken the opposite track. The lender may also be concerned with the following issues:

•  Defects in the loan documents; and

•  Unwanted carrying costs – When the housing market crashed in the years following the 2008 financial crisis, it became difficult for some banks to sell foreclosed properties. To avoid taking on the financial burden of additional bank-owned properties, some lenders stopped taking back properties through the foreclosure process. In those cases, title to the non-performing property remains with the delinquent owner.

HOA May Choose to Foreclose its Interest in Property

Some HOAs and community associations have decided to fight fire with fire. In the face of a stalled foreclosure by a lender, they are exploring the option of foreclosing themselves. Depending upon the legal documents that underpin the HOA, and depending further upon the condition and value of the property, the HOA can sometimes institute foreclosure because of the unpaid maintenance and community fees. While any purchaser would take subject to the lender’s mortgage, there may be sufficient equity to recoup what is owed to the HOA. It may also be just the thing to spur the lender into action and rid the community of a blighted property.

CKB VIENNA LLP: Experienced Attorneys

Is there a “zombie” in the neighborhood? Has a property sat vacant for some period, with little or no activity on the part of the lender? Does your HOA have other properties that are occupied, but which are significantly behind on HOA payments? It may be time to begin a proactive effort to make things right. Because the attorneys at CKB VIENNA LLP have such a broad financial services practice, the firm has the experience to provide lenders, HOAs, and others with in-depth advice regarding the California foreclosure process. We have helped financial clients and community organizations with all types of legal issues regarding real estate. We can provide a dispassionate perspective when it comes to dealing with blighted real estate and other common concerns. 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 at 909.980.1040 or complete our online form.

Is the Limited Liability Company Structure Still Appropriate for Your Maturing Business?

attorneys for an llc

During the early, heady days of a business, it is quite common for the company’s founders to spend hours with attorneys, accountants, and other strategists, mulling over the alternative legal structures that might be utilized for the business. Often, the informality of governing structure allowed to a limited liability company (LLC), coupled with the flow-through tax treatment afforded to members of an LLC, are sufficient to cause owners of a fledgling business to choose that structure instead of that provided for “traditional” corporations. Many business owners don’t recognize that the choice of LLC structure need not be irrevocable. The correct legal format of a fledgling company may not remain frozen in place for a more mature company. Is the LLC structure still appropriate for your business?

Two Dominant Reasons Why You May Need a Change in Structure

While each business is unique, many legal and business experts advise owners to reconsider their LLC structure when either of two factors comes into play:

•  The informality of an LLC’s governance structure gets in the way of effective management of the business

•  New members have invested in the company, yet they do not want the flow-through tax treatment afforded to members of the LLC

Conversion: “Ring Out the Old, Ring in the New”

While the mechanism for change in company structure goes by various names, most legal experts refer to it as “conversion,” a process in which a business entity’s legal “type” is changed from, say, an LLC to a corporation or, alternatively, when the entity doesn’t change its legal structure, but does change it tax election.

Legal Conversion

Generally speaking, legal conversion is an actual alteration of the business entity’s legal structure. For example, if the company was originally organized as an LLC, a conversion to corporate structure would require the preparation and filing of new corporate documents. In California, an LLC is governed by the state’s Revised Uniform Limited Liability Company Act, whereas corporations are governed by other provisions of the California Corporations Code.

Tax Conversion

In some instances, business owners who have structured their companies as LLCs, and who desire a change in structure, may find that formal, “legal conversion” isn’t necessary; a more limited “tax conversion” may be sufficient. This springs from the fact that the IRS doesn’t recognize LLCs as a type of business entity. It puts businesses into one of three categories: Sole proprietorships, partnerships, and corporations. And so, while California provides for the creation of LLCs, from the IRS perspective, the entity must be treated as something else (e.g., a partnership) if there are multiple “members” and no alternative tax election has been made.

An LLC that currently is being taxed as a partnership can change its election to that of a corporation without filing any formal papers in Sacramento. At the state level, it will still be an LLC. At the federal level, for federal tax purposes, it will be considered a corporation.

Do you have concerns that your company’s governance structure is not adequate? Have you taken in new investors whose interests are not necessarily aligned with those of the fledgling business? Do you need to consider either a legal or tax conversion?

CKB VIENNA LLP: A Full-Service Consulting and Law Firm

The law firm of CKB VIENNA has a long history of representing business owners, both in the “fledgling” stage of operation and in more “mature” phases. Our attorneys provide counsel in the appropriate structure for both new and seasoned businesses. We don’t stamp out cookie-cutter solutions. We first gain a true understanding of the client’s goals, concerns, and unique issues, then we work with the client to achieve success. CKB VIENNA has offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone at 909.980.1040 or complete our online form.

Arbitration Clauses in Consumer Finance Agreements: It May Pay Lenders “to Delegate”

For years now, most consumer finance institutions have included arbitration clauses in their finance agreements as a means of preventing runaway jury verdicts. Conversely, plaintiffs’ attorneys generally disfavor arbitration and push hard to avoid it, even to the point of filing a civil action that claims, for one reason or another, that the claim is not subject to arbitration. For example, they may claim the agreement is procedurally or substantively unconscionable, that it was procured by fraud, or – most typically – that their client’s claim falls outside the actual scope of the arbitration agreement. Courts have held, in some cases, that the claimant debtor may be entitled to a jury trial on the issue of whether the claim must be arbitrated.

Why Can’t the Issue of Arbitration Be Arbitrated?

Commercial lenders scratch their heads: Why can’t the issue of arbitration itself be arbitrated? Why can’t the arbitrator determine every issue, including the issue of whether there is to be arbitration? While the issue is still hotly contested – particularly in California – a carefully drafted arbitration clause may provide commercial lenders (and others) with additional protections.

Federal Arbitration Act Has Powerful Terms

Generally speaking, arbitration is a matter of contract. Accordingly, the Federal Arbitration Act requires courts to enforce arbitration agreements according to their terms. In most cases, parties are empowered to arbitrate “gateway’ or ”threshold“ questions of ”arbitrability,’ such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy."

California Caveat

One caveat: A court generally will not assume that the parties agreed to arbitrate a threshold issue like arbitrability unless there is “clear and unmistakable” evidence that they did so. The burden is on the party seeking to compel arbitration to prove delegation of the threshold issue to the arbitrator.

Some courts have allowed lenders and others to “piggyback” delegation provisions found in the internal rules published by the American Arbitration Association (AAA) and other arbitration bodies. In other words, if the lending agreement incorporates the AAA rules by reference, a few courts have found that sufficient to require arbitration of the gateway/threshold issue of arbitrability. That appears not to be the rule, however, in California. While the decision is not widely precedential, a federal court sitting in the Northern District of California [see Ingalls v. Spotify USA, Inc., 2016 U.S. Dist. LEXIS 157384 (N.D. Cal., Nov. 16, 2016)], has held that the arbitrability issue must be clearly designated in the actual agreement. It may not merely “live” in some side agreement that the consumer is not given as part of the lending transaction.

Meaningful Choice/Unfair Surprise

Still, the Spotify case appears to leave room for a straightforward agreement between the consumer lender and the customer that the arbitrator handle all issues – including the issue of arbitrability itself. California courts still have a power of review; if a court determines that the entire agreement is unconscionable, the lender may still find itself before a judge, rather than a more sympathetic professional arbitrator. It seems clear that a strong delegation clause cannot save an agreement that is too one-sided.

CKB VIENNA LLP: Experienced Attorneys

Do your arbitration clauses need review? Are they clear when it comes to delegating the threshold issue of arbitrability to an arbitrator? It’s likely time you had your contracts reviewed by a firm that has extensive experience in the field. The attorneys at CKB VIENNA LLP have broad financial services experience. For years now, we have provided lenders, servicers, and others with in-depth advice regarding both California and federal lending laws and regulations. We can examine your practices and standard agreements, and advise what changes, if any, ought to be made in order to strengthen your position in regulatory matters. 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.

California’s New Workplace Violence Safety Order Now Effective

As of April 1, 2017, California’s new General Industry Safety Order, entitled “Workplace Violence Prevention in Health Care” took effect. The safety order, promulgated by California’s Division of Occupational Safety & Health Standards, requires that health care providers implement workplace violence prevention programs, as well as training programs for employees. It also requires new recordkeeping programs to monitor and report most incidents of workplace violence.

Broad Coverage for Those in Health Care

The safety order applies quite broadly to a number of types of facilities. Covered are “health facilities” – i.e., "any facility, place, or building that is organized, maintained, and operated for the diagnosis, care, prevention, or treatment of human illness, physical or mental, including convalescence and rehabilitation and including care during and after pregnancy, or for any one or more of these purposes, for one or more persons, to which the persons are admitted for a 24-hour stay or longer.”

The terms of the safety order would appear to cover:

•  Outpatient medical offices and medical clinics

•  Paramedic and emergency medical services

•  Home health care and home-based hospice

•  Drug treatment programs

•  Mobile clinics and dispensing operations

•  Ancillary health care operations

Workplace Violence Plans

As noted above, the safety order requires all covered employers to implement and maintain an effective workplace violence prevention plan. Any such plan must:

•  Be in writing

•  Be effective at all times

•  Be in effect in every unit, service, or operation and be specific to the hazards and corrective measures of each such unit, service, or operation

•  Be available to all affected employees at all times

Covered Employers Must Maintain a Log

The safety order requires covered employers to keep a log that tracks each incident, post-incident response, and workplace violence injury investigation. Generally speaking, the log must include:

• The date and specific location of the incident;

• A description of the incident itself;

• Information related to the consequences of the action, such as whether the employee required and received medical treatment; and

• The name, title, phone number, and email address of the person completing the log entry.

The employer must also include within the log a classification of the “perpetrator.” For example, was the perpetrator a patient, a client, a family member, friend of the patient, a stranger with criminal intent, etc.?

Plans Must Be Communicated to Employees

Covered employers must communicate the workplace violence plan to all affected employees. Such communications should clearly identify how an employee is to report a violent incident, threat, or other workplace violence concern. Employers must make it clear that any communication regarding workplace violence can be made without fear of reprisal. Employers are also required to advise employees as to how the employer will investigate employee concerns and how it will inform employees as to the results of any such investigations.

Finally, the plans must not exist in a vacuum – existing employees must be trained and procedures must be put in place to train new hires, as well.

Compliance Begins Now!

All health care employers will want to review the new safety order and determine how, if at all, they are covered by its provisions. Plans that deal effectively with workplace violence can be technical and complex. Health care employers should consult with experienced attorneys who can help them comply with the new rules and regulations. Employers on the periphery of health care may also want to implement workplace violence plans inasmuch as the rules may be expanded in the future.

CKB VIENNA LLP: Experienced Legal Counsel

For many years now, CKB VIENNA LLP has represented health care businesses as they maneuver through the complex commercial world in California. We stay current on all the rules and orders that affect California employers, and we can provide guidance as to how your health care business or other entity can comply. We are experts in employment law and stand ready to guide you. If Occupational Safety & Health Standards Board has contacted your business regarding an alleged violation, we have the skill and experience to represent you in an aggressive manner if necessary. We have offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone – 909.980.1040 – or complete our online form.

California’s Cannabis Industry May Face Banking Issues in the Months Ahead

As the clock ticks toward January 2, 2018, the date – under voter-approved Proposition 64 – when California entrepreneurs and businesses might legally be able to grow, distribute, and dispense recreational marijuana to adults in the state, a number of questions still aren’t fully answered. One important one: What sort of banking relationship will be possible for those who have jumped through all the regulatory hoops in order to sell cannabis products?

Cannabis Industry in Other States is Largely Done on Cash Basis

Federal law generally prohibits banks and credit unions from taking deposits generated through marijuana sales. In Colorado, Washington, Oregon, and Alaska (where recreational marijuana is already legal), and in the more than 20 states in which some sort of medical marijuana is allowed, the cannabis industry has experienced significant banking issues in spite of legality under state law. Most business is done on a cash basis.

The “Cole Memo”

Some thought that the situation would be eased when then Deputy Attorney General James M. Cole issued a memorandum (the “Cole Memo”) providing guidance to federal prosecutors concerning marijuana enforcement under the Controlled Substances Act. Generally speaking, the Cole Memo indicated that the Department of Justice (DOJ) would take a look-the-other-way approach to marijuana enforcement in legalized states. Under the Cole Memo, the DOJ would step in only to keep cannabis products away from minors, and to prevent criminal gangs and cartels from expanding their presence in the industry. Shortly thereafter, the Treasury Department issued guidelines indicating that it would be legal for banks to provide financial services to marijuana-related businesses.

Since the Cole Memo, some community banks in other states quietly began serving the cannabis industry, but large banks still refuse. Big banks generally have determined that the risks outweigh the benefits. Where Colorado and Washington cannabis sellers have found banking relationships at all, they tend to be limited and costly. According to some industry experts, sales of legal marijuana exceeded $5 billion in 2015, mostly in cash. According to Colorado congressman, Ed Perlmutter, 40 percent of Colorado cannabis businesses lack bank accounts altogether.

Other Challenges of a Cash-Based Business

Experts point to other problems faced by businesses without adequate banking relationships. They include:

•  Payment of employment taxes for employees (including, in most cases, a 10 percent penalty since the IRS doesn’t like cash).

•  Payment of income taxes to the IRS.

•  Increased headaches in paying typical business bills: Electricity and other utilities, rent, professional services (legal and accounting), and the like.

Marijuana Sales May Be a Boon for ATM Manufacturers

The cash basis business model required of most legal sellers of marijuana has been good news for at least one business: ATM manufacturers. Virtually every cannabis outlet in Washington and Colorado sports at least one ATM, since the businesses themselves cannot process credit or debit card payments. Credit card companies are just as leery of the cannabis industry as are large national banks.

Cash Lures Crime

Having all that cash lying around is a legitimate concern, of course. While most Colorado “stores” employ armored car services to pick up the day’s revenue, where it is that all the cash goes each night can be somewhat of a mystery since, as already noted, banking options are limited. According to at least one report, since Colorado fully legalized marijuana in January 2014, the Denver Police Department has logged more than 200 burglaries at marijuana businesses, as well as shoplifting and other crimes.

Heady Times Ahead: Experienced Attorneys Can Help Get Things Under Control

Is your business prepared for California’s rollout of legalized recreational marijuana? Do you have questions and concerns about how to maneuver through the twisting road of regulations ahead? Have you correctly weighed the benefits and risks that lie ahead for the cannabis industry in California? Prudent business owners turn to experienced attorneys like CKB VIENNA LLP for assistance.

For years now, we have represented all sorts of businesses in many types of legal and regulatory environments. We have researched the technical requirements of Prop 64 and the myriad other regulations that will have an impact on the sale of recreational marijuana in California. We also have extensive experience in representing financial institutions. We know what makes them nervous. Our team stands ready to represent you. We have offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone – 909.980.1040 – or complete our online form.

Prop 64 “Pot Shops” Must Await Finalization of Licensing Process Before Legal Sales Can Begin

Last November, when voters passed Proposition 64, pushing California into a short column of five states (California, Colorado, Washington, Oregon, and Alaska) that have legalized recreational marijuana use, some Golden State residents may have anticipated that “legal” pot shops would spring up almost immediately. That, of course, has not been the case, as California’s Adult Use of Marijuana Act is actually quite complex. Recognizing that multiple layers of regulation would be required, the Legislature postponed the actual licensing process until January 2018.

While the 14-month window within which to iron out any kinks in the process may have seemed like an unusually long time frame, state regulators indicate that they will need virtually all that time to get ready.

Home Grown Marijuana is Legal During Waiting Period

While one cannot currently legally purchase recreational marijuana in California, one can use, possess, share, and even grow cannabis at home, as long as no money exchanges hands. It is still illegal to sell a marijuana plant, but it may be permissible to share a bud or a clone under certain circumstances.

Bureau of Medical Cannabis Regulation

California’s Department of Consumer Affairs is in the early stages of establishing the Bureau of Medical Cannabis Regulation to oversee the regulation of the cannabis industry. Some regulatory framework was already in place following the passage, in 2015, of California’s medical cannabis laws. Government officials have stressed, however, that the regulations governing recreational marijuana will differ from those related to the use of medical products. Indeed, a number of different agencies will have some stake in the way marijuana is regulated. For example, CalCannabis – which regulates medical marijuana cultivation – is housed with the state’s Department of Food and Agriculture. The Office of Medical Cannabis Regulation is governed by the Department of Public Health. There is even a separate agency – the Office of Manufactured Cannabis Safety – also housed within the Public Health Department, which has additional duties.

Interaction With Local and Federal Laws Still Uncertain

As medical and recreational marijuana both become legal in more and more states, regulators and citizens alike must also recognize that marijuana use is still prohibited under Federal law. Indeed, U.S. Attorney Jeff Sessions has expressed opposition both to recreational weed and the medical variety. California’s stance itself is somewhat inconsistent, since the Office of Environmental Health Hazard Assessment of the California Environmental Protection Agency added marijuana smoke to list of known carcinogens on June 19, 2009. Some California legal experts indicate that there is also a maze of local ordinances that may come into play as businesses contemplate how and where they might open retail sales outlets for recreational pot. The next six months will be an important and complex period legally.

CKB VIENNA LLP – Experienced Attorneys and Advisors

Is your business prepared for California’s rollout of legalized recreational marijuana? Have you contemplated the barriers and hurdles that await those who seek to take commercial advantage of Prop 64? Are you concerned about the interaction between recreational and medical marijuana uses in California? These are just a few of the questions that call out for answers in the upcoming turbulent period before January 2018. Navigating the legal world can be difficult. Prudent business owners turn to experienced attorneys like CKB VIENNA LLP for assistance. For years now, we have represented all sorts of businesses in many types of legal and regulatory environments. We have researched the technical requirements of Prop 64 and the myriad of other regulations that will have an impact on the sale of recreational marijuana in California. 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.

Confidentiality Agreement of Limited Use Against Whistleblowers

California Lawyers

Banks, mortgage firms, and other financial services companies generally require employees to sign confidentiality agreements at the time of hire that prohibits the employee from downloading or disseminating the employer’s confidential information to third parties. However, such confidentiality agreements may be of limited value when it comes to whistleblowing activities, at least according to a recent decision by a federal judge sitting in Southern California [Erhart v. BofI Holding, Inc., 2017 U.S. Dist. LEXIS 20959 (S.D. Cal. Feb. 14, 2017)].

Background

Erhart worked as an internal auditor for BofI Federal Bank (“BofI”). As an internal auditor, Erhart had access to information BofI treated as proprietary and confidential. Over a three-month period, Erhart contacted the SEC and the U.S. Department of Treasury to report what he suspected was misconduct, including the alleged failure to disclose all relevant information in response to an SEC subpoena.

He subsequently filed a civil action against BofI under both California and federal whistleblower protection provisions, alleging BofI retaliated against him for reporting unlawful conduct to the government. The following day, The New York Times published an article titled “Ex-Auditor Sues Bank of Internet.” The share price of BofI’s publicly traded holding company plummeted thirty percent.

BofI counterclaimed and alleged that Erhart violated California state law, the Computer Fraud and Abuse Act, and the provisions of his confidentiality agreement with BofI by publishing BofI’s confidential information and deleting hundreds of files from his company-issued laptop.

Erhart admitted many of BofI’s allegations. He had indeed forwarded a copy of confidential information to his personal email account and downloaded BofI’s files to his personal computer. He printed copies of BofI documents, including customer bank account information and internal audit reports, and had even emailed his mother a spreadsheet containing customer social security information. He also used his girlfriend’s computer to access BofI documents.

Federal Court Said Government Disclosure Was Protected Activity

The federal judge made a number of important rulings, including the following:

•  That California Labor Code Section 1102.5 and the federal whistleblower statutes protected Erhart’s ability to report believed wrongdoing to the SEC and the Department of the Treasury, in spite of the existence of his confidentiality agreement.

•  To the extent that Erhart had disclosed confidential information to the Press, such “leaks” were not protected activity. To the extent that BofI could establish that Erhart was responsible for the leaks, he could be liable.

•  Erhart’s transmission of private and confidential information to his family members, and his accessing of such information from his girlfriend’s computer, was not necessarily privileged. The issue turned on whether he felt compelled to take such measures to protect relevant information from destruction. If so, then his actions were protected. If Erhart did not have a reasonable concern that such information would be destroyed, then BofI would prevail.

•  Erhart had a “qualified” right to preserve the downloaded evidence. The judge noted that a whistleblower cannot pilfer an employer’s proprietary documents in violation of his or her contract merely because it might help the person blow the whistle on an employer’s violations of law, “real or imagined.” But Erhart might be able to show that his appropriation should be protected if he established that such appropriation was limited to the documents necessary to support his whistleblower claims.

•  As to whether his disclosure of information in his court filings violated his confidentiality agreement, the judge said that Erhart was, of course, required to include factual allegations of wrongdoing in order to state a whistleblower retaliation claim. To the extent that he did so, his disclosure was allowed. But to the extent that Erhart disclosed information with intent to harm BofI and, for example, to benefit short sellers by disclosing confidential information, his disclosures would not be protected.

Conclusion: Confidentiality Agreements Work to Prevent Public Disclosure – They Do Not Shield a Business From Wrongdoing

In the judge’s decision, Erhart secured what one might call a half-victory. The judge affirmed that when it comes to disclosing wrongdoing to state and federal authorities, the employer cannot hide behind a confidentiality agreement. On the other hand, the employer should be protected from disclosure of confidential information to the press or to other third parties. It is likely that these sorts of disputes will have to be resolved on a case-by-case basis.

CKB VIENNA LLP: Proven Attorneys

CKB VIENNA LLP offers a full range of advocacy services that can be tailored to address each client’s unique needs. Whether it is litigation involving confidentiality agreements, disputes related to business contracts, or challenging issues related to commercial real estate, our attorneys have been successful in achieving results in a wide range of adversary proceedings. These proceedings have included federal and state, trial and appellate, and arbitration and other forms of alternative dispute resolution. 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.

Tug of War: Lender vs. Tenant Priority in Commercial Real Estate

Lawyers Describe Lender/Tenant Priorities in California

California’s commercial real estate law, like that of many other states, has relatively straightforward rules when it comes to the priority of competing interests. Generally speaking, priority is based upon the timing of creation. For example, if a commercial lease is executed after the landlord’s loan, the loan will take priority and, in the event the landlord defaults on the loan, the tenant’s leasehold interest is generally extinguished by a foreclosure. Alternatively, if the lease is “older” than the loan, absent an agreement to the contrary, the tenant’s rights have priority over those of the lender.

Ordinary Priority Rules Can Cause Difficulty for Landlords and Lenders

Landlords, and particularly their lenders, are often dissatisfied with the ordinary rules of priority. While those rules may work for a lender providing construction financing – its deed of trust will generally be recorded prior to the execution of any leases – the situation is often different for the lender. If the lender provides permanent financing, those financial arrangements are often not finalized until after the execution of at least some leases, particularly those for anchor tenants. In short, the ordinary priority rules tie the landlord’s hands when it desires to:

•  Refinance its indebtedness, or

•  Sell the commercial real estate

In either of these situations, the new owner or new finance provider is typically going to require that it have absolute priority over other interests in the real estate. What the landlord (and lender) desires is a means of subordinating the interest of the tenant to that of the owner/lender.

Landlord’s Solution: Craft Special Provisions Giving Priority to the Lender

In virtually every instance, commercial real estate leases contain provisions that subordinate the rights of the tenant to the rights of any lender whose mortgage or trust deed encumbers the underlying property.

Tenant’s Solution: Nondisturbance and Attornment

A savvy tenant should not agree to subordinate its interest to that of a subsequent lender unless it has some protections of its own. Such protections are generally covered by a nondisturbance and attornment provision (often in the form of a separate agreement). In its basic form, the provision or agreement provides:

•  That in exchange for subordination by the tenant, the lender or lienholder will not disturb the tenant’s possession as long as the tenant is not in default under the lease; and

•  The tenant agrees that in the event of a default by the landlord, it will treat the lender (or a new purchaser under a foreclosure) as landlord for purposes of the leased premises.

In most cases, it is advantageous for both the lender and the tenant to sign a separate agreement setting forth each party’s rights, should the landlord default on its obligations to the lender.

General Rule: Forewarned is Forearmed

Prior to signing a commercial lease, a tenant should recognize the risks associated with signing a subordination agreement (or signing a lease containing subordination language). An ongoing tenant that pays its rent is an important asset for any landlord. Tenants often have more leverage than they think. While there may be no way around the subordination agreement itself, a tenant may be in a strong position when it comes to getting favorable nondisturbance and attornment language.

CKB Vienna: Experienced Attorneys

The law firm of CKB VIENNA has provided both legal and business consultation to landlords, commercial mortgage lenders, and commercial real estate tenants for years. Our attorneys know the sorts of risks and issues faced by those developing or purchasing commercial property, and we also possess keen perspective when it comes to tenant’s rights. In representing lenders, we have also drafted core loan documentation for numerous situations. We don’t use a cookie-cutter approach, since each landlord, tenant, or lender has specific and unique needs. Our firm is also skilled in all forms of litigation, should that become necessary. CKB VIENNA has offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone – 909.980.1040 – or complete our online form.

Businesses Must Be Mindful of New Restroom Access Law

Legal Aspects of Bathroom Access Laws for California Businesses

On March 1, 2017, California’s Equal Restroom Access Act went into effect and many businesses are scurrying to determine if the new law covers their facilities and, if so, what must be done to ensure compliance.

New Law Applies to All Single-User Toilet Facilities

Under the new law, all single-user toilet facilities within a business establishment, place of public accommodation, or state or local government agency must be identified as all-gender toilet facilities. Specifically, a single-user toilet is:

•  A toilet facility with no more than one water closet and one urinal

•  With a locking mechanism controlled by the user

Any restroom that has those characteristics must now have a sign outside indicating that the restroom is for all genders. If a business has two restrooms, both of which are single-user toilets, then both such restrooms must be identified and labeled as all-gender toilet facilities.

California Law is Consistent with OSHA Rules

Employers and businesses should recall that OSHA’s Sanitation standard requires employers to provide their employees with toilet facilities. The standard is part of a larger health concern – that employees who have inadequate access to restrooms are subject to serious health issues, such as urinary tract infections and bowel and bladder problems. Not only must access to restrooms be available under OSHA rules, such availability must be prompt and sanitary. Moreover, employers may not impose unreasonable restrictions on employee use of toilet facilities.

Unrestricted Restroom Access is Not a New Idea

While the issue has become controversial in some parts of the country, providing unrestricted restroom access is no new idea. Anyone who has traveled on a commercial airplane recognizes that the restroom facilities are not restricted by gender. The same is true generally for restrooms in homes and many small businesses. Portable restrooms that are required for most construction projects are not gender specific.

Restricted Restroom Access Causes Other Problems

State officials have noted for some time now that placing too many restrictions on restroom access cause significant issues for the public. For example, when out in public, children of a different gender than their caretakers and people with disabilities who rely on caretakers of a different gender often have no choice but to break social norms when the only available restroom is designated to a specific gender. The new California law is designed to reduce the problems associated with this issue.

California Law Should Benefit Everyone

While much of the publicity surrounding the new Access Act relates to transgender and gender nonconforming persons, most experts indicate the new law will promote bathroom equity for everyone, regardless of gender.

CKB Vienna LLP – Experienced Attorneys and Advisors

Some business owners worry that the regulatory world is just too confusing and that the changing maze of rules that must be followed takes too much time and attention. Many turn to experienced attorneys for assistance. For years now, CKB VIENNA LLP has represented all sorts of businesses in many types of legal and regulatory environments. As attorneys, we keep up with the latest requirements so that the business owner can keep his or her attention on business. 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.

California Employers Should Be Wary of Using Job Abandonment to Terminate Workers

Attorneys Discuss Rights to Terminate in California

Terminating an employee for excessive absenteeism is a relatively common practice in California. HR officers often feel that terminating an employee for, say, five days of unexcused absences is an objective decision, whereas firing the employee for “poor performance” is subjective and more difficult to document. A recent California appellate decision shows, however, that where the employee’s absences are potentially linked to medical leave, the employer must be very careful, lest it open itself to a claim that it has violated the California Family Rights Act (“CFRA”).

The Bareno Case

According to the employer in the case, San Diego Community College, Bareno had a history of unexcused absences. It reprimanded her on numerous occasions; in 2013, it imposed a three-day suspension for excessive absenteeism. On the Monday she was supposed to return to work, she called her supervisor and advised that she would be absent while she sought medical attention. Later that day, she followed up with an email indicating she would be out that workweek. She provided a medical authorization note. Later that week, she emailed her supervisor’s boss, indicating she wanted to appeal the three-day suspension and further indicating that she was out on medical leave.

On that same day, she sent her supervisor a new medical form using the email system at a UPS Store. The employer claimed it did not receive the “UPS” email and, after five days of what it said was unexcused absence, it sent Bareno a termination letter. During the time that letter was in transit, Bareno emailed another medical verification form, indicating she needed more leave. By this time, the employer told her she’d been fired and refused to reconsider its decision.

Bareno sued the community college, saying she had been terminated in retaliation for taking medical leave – a personnel action that violates the CFRA. The trial court granted the college summary judgment and Bareno appealed.

Appellate Decision

On January 13, 2017, the appellate court reversed the trial court, noting that if the evidence was viewed in the light most favorable to Bareno, she had stated a CFRA claim. The court said Bareno’s email indicating she was appealing the three-day suspension and that she “was on medical leave” was a sufficient notice to the employer that she needed medical leave. The college had an obligation to ask Bareno for additional information regarding her leave request if it thought such was necessary. It could not merely sit back and wait the five days, and then terminate her.

Employer Takeaways

The case provides a number of important takeaways for employers. Among them are the following:

•  Proceed with caution when an employee mentions being out of work for medical reasons.

•  The courts will generally give the employee the benefit of the doubt; so don’t just rely upon an employment contract provision that says the employee is deemed to have “voluntarily resigned” after a specified number of unexcused absences.

•  Recognize that spam and email filters can prevent delivery of important messages from an absent employee. Keep in contact with the employee during any period of absence.

•  If the employer feels that verification for an absence is wanting, it has a burden of moving forward with employee contact. If there is any reason to believe the employee is absent for a CFRA-protected medical reason, the employer should not assume the employee has resigned.

CKB VIENNA LLP: Experienced Legal Counsel in Employment Law

In light of the Bareno case, all California employers should review their HR policies to determine what changes, if any, need to be made. Many employers determine that having experienced, outside counsel is a key to best practices in personnel law. For years now, CKB VIENNA LLP has represented all sorts of businesses in employment law matters. 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.

Joint Trusts: Are They a Good Idea?

Many couples take pride, and appropriately so, for the bond they share. They have no secrets; they share responsibilities. They have similar goals, likes, and predispositions. They view the marriage as a special partnership within which everything is shared. When it comes to estate planning, they may see the benefits that can flow from revocable trust arrangements, both in terms of the overall management of assets and the avoidance of at least some of the headaches of probate administration. They’ve always had a joint checking account, so why not a joint trust arrangement? But is a joint trust really a good idea?

What Does the Joint Trust Look Like?

Generally speaking, with a joint trust (particularly a joint revocable trust), the spouses create one trust, into which their assets are contributed during their lifetimes. Typically, the joint trust document provides that all assets contributed are deemed to be owned 50 percent by each spouse, usually as tenants in common. Upon the first death, the assets are segregated into a “Decedent’s Trust,” and a “Survivor’s Trust.” The provisions of each of these segregated trusts are different so as to take advantage of desired estate tax objectives.

The Goal is Convenience – the Result Can Be Confusion

While a joint trust can – particularly for small estates – be convenient, more often than not, any convenience is outweighed by the complexity. Often, the initial goal with the joint trust is to avoid the division of the couple’s assets, with some going to one spouse’s trust and other assets going to the separate trust of the other spouse. In many cases, however, the only thing that is accomplished is the postponing of the required division to a time that coincides with the first death. Many trustees, particularly if they do not have legal or accounting backgrounds, find their duties become truly complicated as they wrestle with the needs – and requirements – of the Decedent’s Trust and the Survivor’s Trust. What assets go where? When, and at what tax consequences, are the transfers made?

Errors in Administration Can Be Expensive

Some survivors and trustees find that errors are easily made in the administration of a joint trust. Remedying those errors can be costly. What seemed at first to be a plan to save time and money ends up more costly than if two separate trusts had been created in the beginning. Most legal experts agree that the administration of separate trusts is more straightforward and much less prone to error.

Estate Planning: Skilled, Experienced Legal Counsel a Key

The law firm of CKB VIENNA has extensive experience in the drafting and creation of trusts of all types. We have helped individuals establish both revocable and irrevocable trusts and have given our insight into all facets of estate planning and wealth management. We are skilled in drafting and coordinating all sorts of estate planning documents, from wills to trusts to buy-sell agreements and succession planning arrangements. While the firm is skilled in all forms of litigation, our attorneys offer guidance designed to avoid the consequence and cost of litigation wherever possible. CKB VIENNA has offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone – 909.980.1040 – or complete our online form.

For California Mechanic’s Lien Filing Purposes, When is a Project Complete?

Cal. Civ. Code § 8412 provides, in relevant part, that a general contractor has 90 days from “completion” of its work to record its mechanics’ lien claim. That sounds simple enough, but in recent years, questions have often arisen as to when work on a project is considered “complete.”

“Substantial Completion” isn’t Enough to Start the Clock

For example, is work complete when the owner receives a certificate of occupancy (COO)? Those who are familiar with construction industry practices recognize that the issuance of a COO doesn’t necessarily mean all punch list items have been completed. In recent years, some California trial courts took the position that the 90-day clock began to tick upon “substantial completion” of the contractor’s work. In 2016, the California Court of Appeal clarified the rule, however, finding that “completion” – for purposes of the 90-day filing window – only occurs upon “actual completion” of the work of improvement.

Three Other Factors Can Trigger 90-Day Mechanic’s Lien Filing Requirement

In addition to actual completion of the improvement, three other events detailed in Cal. Civ. Code § 8180 can trigger the running of the 90-day time period for filing one’s lien:

•  Occupation or use by the owner accompanied by cessation of labor

•  Cessation of labor for a continuous period of 60 days

•  Recordation of a notice of cessation after cessation of labor for a continuous period of 30 days

Special Rules May Apply to Construction of Separate Residential Units

Contractors should bear in mind that special rules apply to mechanics’ liens associated with projects to construct separate residential units. Cal. Civ. Code § 8448 provides that if improvement work consists of the construction of two or more separate residential units:

•  Each unit is deemed a separate work of improvement, and completion of each unit is determined separately for purposes of the time for recording a claim of lien on that unit.

•  Material provided for the work of improvement is deemed to be provided for use or consumption in each separate residential unit in which the material is actually used or consumed, but if the lien claimant is unable to segregate the amounts used or consumed in separate residential units, it has the right to a mechanics lien against the entire property.

Mechanic’s Liens Provide Important Protections

California’s mechanic’s lien laws provide important equitable protection for those supplying materials and/or labor to a construction project. Generally speaking, courts have determined that strong public policy requires that mechanics’ lien laws be construed for the benefit of the potential lien claimants.

Attorney’s Fees and Costs Can Sometimes Be Recovered by Lien Claimants

While mechanic’s liens are generally limited to the reasonable value of the work provided by the claimant, or the price agreed upon by the claimant and the person who contracted for the work (less any payments received), where the lien claimant forecloses its lien, it may be able to recover its costs for recording the lien, as well as attorney’s fees.

California Law Regarding Mechanic’s Liens is Complex

California’s mechanic’s lien law is quite complex. Failure to file appropriate lien documents can be fatal to a claim. Most contractors and suppliers have discovered that the risks of proceeding without solid, experienced legal counsel are great. Most agree that the costs associated with retaining a good legal team are small compared to the risks of filing faulty paperwork on their own.

The law firm of CKB VIENNA has provided both legal and business consultation to contractors, developers, landowners, landlords, and others for years. We have extensive experience in both filing and defending mechanic’s liens in California. We have assisted a range of parties in assessing and managing the risks associated with construction projects. While we are skillful settlement negotiators, we are also experienced in all forms of litigation. CKB VIENNA has offices in Rancho Cucamonga, San Bernardino, and Los Angeles. Contact us by telephone – 909.980.1040 – or complete our online form.

Los Angeles Employers Face Important New Hiring Practice Rules

On January 22, 2017, an important new Los Angeles employment provision – the Fair Chance Initiative Ordinance – took effect within the city. The new ordinance, passed last December, adds significant restrictions on the types of questions that area employers can ask prospective employees, and it also prohibits many employers from conducting a criminal background check prior to making a provisional offer of employment.

New Ordinance’s General Provisions

Los Angeles employers should familiarize themselves with the new ordinance. Generally speaking, it:

•  Applies to all private employers with more than 10 employees located or doing business in the City of Los Angeles

•  Covers employees who generally perform “at least two hours of work on average each week” in the City

•  Allows exceptions for city and local government departments, state or federal government units, and any employers that are required by law to inquire about past criminal convictions

•  Provides additional exceptions for employment positions that are required by law to be held by persons without specified criminal convictions

•  Provides exceptions for positions requiring the person employed to possess or use a firearm in the course of the employment

•  Covers any individual who submits an application for work performed in the City, including temporary, seasonal, commission, contracted, and even unpaid training positions

Employers Must Take Certain Affirmative Actions

The new ordinance also requires that employers modify their employment advertising and job posting in particular ways. For example, after the effective date of the ordinance, covered employers must:

•  Indicate in all advertisements and solicitations, whether they be internal or external, that the employer will consider qualified applications that reveal criminal histories in a manner that is consistent with the ordinance

•  Post a notice calling attention to the new ordinance in a conspicuous spot within every workplace and job site in the city

Conditional Offers of Employment

Perhaps the most important part of the new ordinance is the requirement that covered employers refrain from asking applicants about their criminal history until after a conditional offer is made. Once that conditional offer has been made, a covered employer is permitted to perform a criminal background check. If such a background check discloses criminal history information unfavorable to the applicant, the employer is not permitted to withdraw the offer until and unless the employer has completed a written assessment that effectively links the specific aspects of the criminal history with risks inherent in the job sought by the applicant. In making its determination, the employer must consider various factors, including the following:

•  The nature and gravity of the offense

•  The time that has elapsed since the conviction

•  The nature of the job that is sought by the applicant

“Fair Chance Process”

Before the covered employer takes any adverse action against the applicant, they must also engage in the “Fair Chance Process.” Generally speaking, that process includes:

•  Providing the applicant written notification of the adverse employment action

•  Providing a copy of the written assessment described above

•  Providing such other and further documentation that would support the proposed adverse employment action.

As to this last step in the process, the employer must allow the applicant five business days to respond and provide additional information or documentation regarding the accuracy of the criminal history results and to detail any important mitigating factors. If the applicant provides correcting or mitigating information, the employer must conduct another written assessment and inform the applicant of its decision with a copy of that new written assessment.

Employers Should Review Their Existing Policies

In light of these new requirements, all Los Angeles employers should review their HR policies to determine what changes, if any, need to be made. The penalties for non-compliance with the new law do not kick in until July 1, 2017, but they will be monetarily punitive: $500 for the first violation, $1,000 for the second, and $2,000 for subsequent violations.

CKB VIENNA LLP: Experienced Legal Counsel

Many businesses determine that having experienced, outside counsel is a key to best practices in personnel law. For years now, CKB VIENNA LLP has represented all sorts of businesses in employment law matters. 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.

Mortgage Firms and Real Estate Agents Shouldn’t Get Too Cozy

Many prospective homeowners see the residential real estate market as a maze of red tape, paperwork, and endless bargaining. It’s no surprise, therefore, that California real estate agents are often called upon to give prospective buyers advice. The questions don’t just concern housing values, the quality of local school districts, and the levels of area property taxes; they often relate to mortgage lending. While real estate agents often have a wealth of information about current mortgage conditions and practices, both the agent and the mortgage firm can get into deep trouble if they maintain anything less than an arm’s length relationship. Mortgage firms and real estate agents shouldn’t get too cozy with each other.

Consumer Financial Protection Bureau Levies Steep Fine Against California Mortgage Lender

On January 31, 2017, the Consumer Financial Protection Bureau (CFPB) reported that it had taken action against a major California mortgage lender for paying what it labeled “illegal kickbacks” for mortgage business referrals. Under the terms of a CFPB consent order, the lender will pay a $3.5 million civil penalty and various real estate brokers, and a mortgage loan servicer will pay a combined $495,000 in consumer relief and penalties.

CFPB’s Allegations Were Far-Reaching

The CFPB alleged that the California lender used a variety of schemes to pay kickbacks for referrals of mortgage business in violation of the Real Estate Settlement Procedures Act. It alleged, for example, that the lender established marketing services agreements with some companies, which were framed as payments for advertising or promotional services, but which were created to disguise payments for referrals. The CFPB also contended that the lender:

•  Paid for referrals through agreements with more than 100 real estate brokers

•  Paid brokers to require consumers – many of whom were already prequalified with another lender – to prequalify as well with the lender

•  Split fees with a mortgage servicer in order that the lender might obtain consumer referrals

CFPB Actively Pursuing Many Other Cases

According to the CFPB, the agency has helped recover more than $11.7 billion since its creation, assisting more than 27 million consumers, and resolving more than one million complaints. According to the government entity, it makes sure banks, lenders, and other financial companies treat American consumers fairly. Quite a few lenders and others argue that CFPB’s methods are often heavy-handed.

CKB VIENNA LLP: Experienced Attorneys

Because the attorneys at CKB VIENNA LLP have such a broad financial services practice, the firm has the experience to provide lenders, servicers, and others with in-depth advice regarding the CFPB and its practices. Our firm has been active in monitoring developments at the CFPB and other government agencies. We have helped financial clients with compliance with the Dodd-Frank Act, with Truth in Lending issues, and with other important legal matters related to mortgage lending.

We can provide financial entities with an important, dispassionate perspective when it comes to potential CFPB exposure. We can examine your practices and advise what changes, if any, ought to be made to strengthen your position in regulatory matters. 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.