What Are My Obligations If My Employee Gets Pregnant?

It is inevitable in virtually any workplace that at some point in time an employee will become pregnant. Employers want to support and encourage female employees going through this unique journey, while also ensuring the continued success and viability of their projects and workflow. In order to do so, one of the first things that employers must understand is their obligations toward pregnant employees under federal and state law.

What Am I Required To Provide Pregnant Employees in the Inland Empire?

Thankfully for employers, there are not as many affirmative obligations that they must take on in relation to female employees, as compared to things they should not do in order to stay in compliance with the law.

One thing that all employers are required to do is to allow pregnant employees to take pregnancy disability leave or family medical leave. By law, all pregnant employees are entitled to up to four months of pregnancy disability leave and are also entitled to be returned to their same job, or a comparable job, upon returning from disability leave.

If, during the course of that leave, a situation arises that requires an employer to consider firing that pregnant employee, the employer must be very careful to make sure that the firing is for a documented non-leave related reason. For example, if the company conducts universal layoffs in the employee’s department, it may not be a violation of the law to let the employee go. But if the firing is in any way related to the pregnancy or leave, this would be a violation of the law.

Employers must also provide employees with reasonable accommodations for their medical needs during pregnancy. For example, pregnant women may need more frequent bathroom breaks during pregnancy. Or if they are in positions that require extended periods of standing, they may need to be provided with a chair or ability to take sit breaks from standing.   

Finally, after pregnancy, employers must also provide employees returning from pregnancy disability leave with the time and location to be able to pump breast milk, should they choose to do so.

What Can’t Employers Do When An Employee is Pregnant?

The answer to this question is fairly simple – the employer cannot discriminate against the employee on the basis of her pregnancy. This means that an employer who is interviewing candidates can’t decline to hire a female candidate just because she is pregnant. Similarly, an employer can’t overlook a pregnant employee for promotion or certain accolades just because she is pregnant.

Employers must make every effort to work with the employee to ensure that the reasonable needs of the employee are met during pregnancy and that the employee is not harassed in any way as a result of pregnancy.

Finally, following maternity leave, an employer cannot terminate or demote an employee simply because she was pregnant, took maternity leave, or has ongoing medical issues related to pregnancy. All of these actions would constitute illegal discrimination.

California Attorneys Helping You Respect The Rights Of Your Employees

Pregnancy can be an exciting and challenging time for female employees, full of excitement but also anxiety about how work may go and what changes may be coming. Pregnancy can understandably be difficult for employers as well, as they do their best to work around an employee’s needs and changing schedule. It is important that employers and employees work together to navigate these challenging circumstances and make the best of the situation.

At CKB Vienna LLP, our attorneys frequently advise clients on how to remain compliant with state and federal laws regarding pregnancy and pregnancy discrimination. For more information, contact us online or at 909-980-1040.

Who Is Liable for Unpaid Wages? New Changes To California’s Laws

Wage theft is a serious problem within the construction industry, and one that lawmakers take seriously. In order to combat wage theft issues and better protect construction workers on the job, the California legislature modified the California Labor Code to provide that direct contractors may now be held liable for wage violations by their subcontractors. Direct contractors who work with a variety of subcontractors on different projects need to be aware of these new legal obligations.

What Does This New Law Mean for Construction Companies in Rancho Cucamonga?

Under the new law, AB 1701, starting in January 2018, direct contractors became liable for any unpaid wages or benefit payments that are owed by subcontractors that they work with on a job. AB 1701 applies to all direct contractors, or those contractors that contract directly with an owner, and applies to all private construction jobs.

The new law does not permit the employees themselves to bring a direct action against the direct contractor for their unpaid wages. But it does allow three different entities to bring claims on an employee’s behalf. These include:

• The Labor Commissioner, which can bring an administrative action or a civil lawsuit

• Joint labor-management cooperation committees may bring a civil action

• Third parties that are owed contributions on behalf of employees may bring civil actions

Both joint labor-management cooperation committees and third parties may also seek attorneys fees and costs if they are required to bring a lawsuit. There is a one-year statute of limitation on bringing a lawsuit under the new law.

How Can Direct Contractors Protect Themselves?

The best way for direct contractors to protect themselves from any future lawsuit is to make sure that their subcontractors are paying the wages that they’re required to pay. This can be done by adding contractual terms that require the subcontractor to disclose all pay information, including regular payroll records, during the course of a job.

Before beginning a job, direct contractors should also require information from the subcontractors regarding any and all employees or contractors who will be performing work on the job so that these records can be compared against any future payroll records received to ensure that comprehensive information is being provided.

Beyond obtaining information directly from the subcontractor, direct contractors may also want to consider requiring subcontractors to provide a bond or letter of credit to protect the direct contractor in the event that a wage claim is made. This can help to ensure that the direct contractor does not have to go through the difficulty of handling a wage lawsuit and then turn around and attempt to recover from the subcontractor after the fact.

California Attorneys Helping You Keep Track of Your Legal Obligations

In the ever-changing world of California legislation, it can be easy to lose track of new obligations that are being imposed on contractors, or obligations that may be altered by new legislation. The failure to stay on top of these developments can have severe consequences down the road. At CKB Vienna LLP, our attorneys make it their job to stay on top of these types of developments, and to make sure their clients are in compliance as well. For more information, contact us online or at 909-980-1040.

Updated OSHA Requirements for Automotive Parts and Accessories Employers

Reputable California Lawyers

For any employer working in the United States, safety of employees must be paramount. Whether an employee is working a physical job, dealing with sensitive chemicals or substances, or simply part of an office where repetitive stress injuries sometimes occur – employers must be cognizant of the health and safety of employees at all times.

Working in the automotive industry is often a particularly physical profession, with many workers engaged in manufacturing or repair jobs. Because of this, the federal government is particularly sensitive to risks that can arise within this sector of the economy. It has enacted special laws to address the health and safety issues involved, including a recent change to injury and illness reporting under OSHA.

OSHA and the Automotive Industry in Rancho Cucamonga

OSHA, the Occupational Health and Safety Administration, is charged with administering health and safety laws and regulations throughout the United States. Many of the standards and regulations set forth by OSHA are industry-specific, with particular industries – such as construction or manufacturing – being subject to closer scrutiny and regulation.

According to OSHA, in 2015 there were 91 workplace fatalities in the automotive repair and maintenance industry.  Auto parts manufacturers and suppliers have also been the target of several recent OSHA enforcement actions for willingly exposing employees to hazardous work environments. For this reason, the automotive industry is an area of concern for OSHA officials.

Because of ongoing safety concerns, the automotive parts and accessories industry is considered a “high risk” industry by OSHA, which subjects it to additional protections and regulatory requirements. One such recent requirement that has been imposed is a new electronic online illness and injury tracking system.

New Illness and Injury Tracking Requirements

Beginning in December 2017, employers in the automotive parts and services industry with twenty or more employees are required to submit data regarding reported illness and injuries that occur on the job through an electronic reporting system.

Prior to this change, employers were allowed to record and maintain this data on OSHA 300 form logs. With the new change to the rule however, this data must be submitted electronically directly to OSHA. Data from 2016 was due on December 15, 2017, while data for 2017 must be reported online by July 1, 2018.  Beginning in 2019, the data must be submitted on a yearly basis no later than March 2nd.

This new rule won’t dramatically increase the work that automotive industry employers must perform, as employers have always been required to keep this information. However, it is anticipated that OSHA will begin to publicly post this data online for other employers and consumers to see. The hope here is that the public dissemination of “poor” safety records will encourage employers to change their behaviors and improve their record.

It is also anticipated that this online data may be used to help OSHA determine where to conduct onsite inspections, and will result in an uptick in inspections for businesses that report poor safety data.

California Attorneys Helping You Comply with Changing Regulatory Environments

With all the regulations that the automotive industry is currently subjected to, it can be easy for employers to overlook or misunderstand new regulations like OSHA’s new online reporting requirements. Although these mistakes are easy to make, the consequences of them can be severe.

At CKB Vienna LLP, our attorneys constantly keep abreast of proposed changes to the laws, new regulations, and policy shifts that are likely to impact clients – and provide timely and relevant guidance on these issues. For more information, contact us online or at (909) 980-1040.

Are Wages Being Paid on Time?

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One of the biggest challenges that employers and employees grapple with on a constant basis is the payment of wages. Employees expect to get paid in a prompt and timely basis for the work that they perform. Employers must navigate the administrative complexities of making sure payroll happens in a consistent fashion. When something goes wrong, anger and frustration can arise on both sides.

California law requires employers to properly pay wages to employees and threatens them with penalties and fines if they fail to do so. For this reason, it is important for both parties to understand how California’s wage laws work.

What Are an Employer’s Requirements in Rancho Cucamonga?

In California, most employers are required to pay their employees at least twice a month. When an employee receives his or her paycheck, it must be provided in a timely fashion and must be for all work that has been performed. This means that an employer can’t forget to conduct payroll one week and simply decide to put those wages on the next paycheck.

California’s requirement that an employee be paid timely does not extend to circumstances where it is the employee’s own fault that he or she did not get paid. For example, if an employee fails to provide an address to an employer, or provides the wrong address, the employer will not face any punishment for failing to pay the employee on time.

California also has special laws that apply when an employee leaves a job and receives a final paycheck. If the employee is being fired or terminated, the employee must receive their final paycheck immediately – on their last day or at the time of termination.

If an employee quits and gives more than 72 hours notice, he or she is also entitled to a paycheck immediately, usually on the last day. If the employee quits without any advance notice, the employer must provide the paycheck within 72 hours of receiving notice that the employee has quit.

What Happens When Employers Don’t Abide by These Requirements?

If an employer fails to pay their employees according to the requirements of California law, various penalties may be imposed. For example, if an employer does not timely pay an employee their regular wages, or withholds a portion of the wages, they are immediately in violation of the California Labor Code and can be fined $100 for the first violation and an additional $200 for each subsequent violation.

In certain circumstances, the employer may also be required to pay the employee an additional 25% of the money that was withheld from the employee.

The penalties are even more severe when a final paycheck is not provided on time. For each day that a final paycheck is not provided by an employer, the employee is entitled to their average daily wage. This can continue to accrue for up to 30 days. So, for example, if an employer takes 28 days to provide an employee with their final paycheck, they will have to pay the employee for those 28 extra days in that final paycheck.

California Attorneys Helping You Comply with Wage Requirements

Providing payroll to employees in growing companies can be a complicated endeavor and when cash is tight it can be difficult to get checks out in a timely manner. Although companies may be inclined to try to get away with paying employees late, the potential penalties can quickly outweigh any benefits.

At CKB Vienna, LLP, our attorneys can work with you to develop systems and strategies to ensure timely payment for your staff, and can assist you in defending against unwarranted late wage claims. For more information, contact us online or at (909) 980-1040.

When You Disagree: How to Handle Owner Disputes

Knowledgeable California Attorneys

While disagreements can arise in all types of contexts, disputes between owners or founders of a company are particularly common when dealing with small businesses, partnerships, or closely held corporations. Partners who initially agreed on all aspects of starting a company may find that their views begin to differ, or their approaches to growing the business are entirely different.

Because of the emotional and financial investment that goes into starting a business, ownership disputes can be fraught with tension and personal affronts.

Types of Ownership Disputes That Can Arise in Rancho Cucamonga

Ownership issues can arise in all different types of contexts. A common cause is when one owner feels that another has breached some sort of contract or agreement. However, there can also be more complicated issues of corporate governance and breach of fiduciary duties involved.

Owners and shareholders can owe duties to each other and to their company to act in the best interests of the corporation that they formed. Disputes often arise when one owner feels that another is no longer operating in that best interest.

For example, one owner may allege that the other is engaging in self-dealing, or orchestrating certain contracts and projects within the company that are particularly beneficial for that owner rather than for the company as a whole. Where personal gain begins to outweigh the commitment to the business, tensions often arise.

Similarly, disputes can occur where one owner feels that the other owner is excluding him from participation in important decisions within the company, or keeping him out of loop on the company’s path moving forward. This is often known as a “freeze-out” and can be the basis for possible legal claims.

Disputes can also occur between shareholders. A similar claim can arise from a minority shareholder that he or she is being “oppressed” by the majority shareholder, and is not getting to participate fully and fairly in the decisions of the company.

Can You Prevent Owner Disputes from Proceeding to Litigation?

While disagreements and arguments between owners are one thing, actual civil litigation is a much more aggressive step. For many companies, the financial prospect of litigation can threaten the financial future of the company and hinder any progress that is being made.

For companies hoping to avoid this path, an initial step is to fully and fairly investigate the claims underlying an ownership dispute. If a company has independent officers or shareholders who can impartially conduct an investigation into what is going on – including whether issues such as self-dealing or oppression have occurred – this can allow the company to informally resolve the dispute and avoid the courtroom.

In some smaller companies where the owners are the primary employees, this may not be possible. The only way to have such an investigation would be if the parties to the dispute are willing to engage an outside investigator or mediator to evaluate the claims at issue, and make recommendations about how to move forward.

In the event that litigation is inevitable, owners may wish to consider whether their claims can best be resolved through an alternative dispute resolution process such as arbitration or mediation. This can help to keep costs down and avoid the raw emotion and “scorched earth” approaches that often arise in litigation.

California Attorneys Working to Keep Your Business on Track

If not handled swiftly and carefully, owner disputes can derail and destroy small, closely-held companies. For this reason they require careful attention and prompt resolution. At CKB Vienna, LLP, our attorneys understand the personal and emotional complexities of ownership disputes and can work with you to safely navigate these difficult waters. For more information, contact us online or at (909) 980-1040.

How to File a Mechanic’s Lien in California

Skilled California Lawyers

When you contract to provide building or construction services to an owner, property developer or contractor, you typically do not get paid for the entirety of your work up front. Instead, you may receive an initial deposit or payment to begin the work, with the remainder of the funds to be provided on completion.

While this arrangement works well in theory to keep both parties fair, the reality is that subcontractors, craftsmen, and laborers can be placed in a situation where they are not paid for the work they have performed. Mechanic’s liens exist to give these individuals some recourse for the money that is due to them.

Who Can File Mechanic’s Liens in Rancho Cucamonga?

Under California law, mechanics liens are available to persons who provide work for improvement of a property. Under the statute, this can include, but is not limited to:

• Direct contractors

• Subcontractors

• Material Suppliers

• Laborers

• Design professionals

The work at issue must be “authorized.” This means that it must be either performed at the request or agreement of the owner of the property, or it must be authorized or requested by a party such as a direct contractor who is responsible for the overall site improvement.

How Does the Mechanic’s Lien Process Work?

The California mechanic’s lien process is full of important deadlines and steps which must be followed carefully or an individual can lose their rights to a mechanic’s lien.  The first step is the serving of a 20-day preliminary notice that you have the right to record a mechanic’s lien.

As the name suggests, this notice only protects you for claims that have accrued in the last twenty days before the notice was filed.  This means that contractors and other laborers must be careful to serve a notice promptly upon failure to be paid. If you wait too long you may lose your right to recover for earlier work you performed.

There are two exceptions to the 20-day notice requirement: (1) for work you contracted directly with the owner for, and (2) for wages a laborer has not been paid.

After serving the notice, the next step is to record the mechanic’s lien. A mechanics lien can only be recorded after work is completed. However, after work is completed there are also deadlines within which a mechanic’s lien must be recorded.

If there is no notice of completion recorded for the project, then a mechanic’s lien must be recorded within 90 days of completion of the work. If a notice of completion has been recorded, the deadlines vary based on the party. For example, a general contractor must record within 60 days after the notice of completion, while a subcontractor must record within 30 days.

Finally, you must file your lawsuit to recover under the mechanic’s lien within 90 days of recording your lien. If you fail to file within the 90 day period your lien becomes unenforceable.

California Attorneys Assisting You in Properly Recording and Recovering Under Your Lien

Lien procedures in California are highly specific and must be followed perfectly in order for a contractor, subcontractor, or laborer to recover under the lien statutes. Because the steps that you must take and the deadlines you must follow vary based on your own status, it is often helpful to consult with an attorney who is experienced in handling mechanics liens.

At CKB Vienna, LLP, our attorneys frequently assist clients in recording mechanics liens, as well as handling the legal issues that arise when other parties to a project file a lien. For more information, contact us online or at (909) 980-1040.

Do Securities Laws Apply to Your Company?

Experienced Attorneys Serving California Clients

For many small businesses, one of the easiest ways to get off the ground is to solicit the help of investors. They can provide some of the initial cash flow that may be needed to make beginning investments in infrastructure, equipment, and high quality employees.

While outside investment has become a reality for many small businesses and start-ups, few appreciate the unique risks and potential securities issues that come with eliciting outside help and new cash flows. Without being careful, the promises you make to investors and representations you provide can lead you into big trouble down the road.

What Are Securities Risks for Rancho Cucamonga Companies?

If you’re a small business owner who has never thought about securities laws, you’re not alone. For most individuals the idea of securities or agencies like the SEC conjure up images of hedge funds and big banks. While these big players are indeed subject to securities laws, the reality is that other smaller companies can be as well.

Anytime that you receive money in exchange for a portion of your company through stock or equity, you are potentially providing a security, which requires you to abide by federal and California securities laws. Typically, these laws require that you register the security before providing it to others. If you fail to do so, or engage in questionable conduct in relation to those securities, you could potentially be subject to civil or criminal penalties.

Thankfully, both federal and state law provides certain exemptions that can apply to small businesses who are acquiring investors and therefore offering up a piece of their company.

Common California Securities Exemptions

Some of the common exemptions that are frequently used by small businesses and startups in California include:

• Section 25012(f) for founders, friends, and family. This exemption allows individuals who start a business to secure investments from their own bank accounts as well as from friends and family without having to register these issuances of equity or having to comply with California’s securities laws. The key requirement is that you had a prior personal or business relationship with the individual.

• Section 25012(o) for employees and consultants. This exemption allows your employees to receive stock options or equity without these benefits having to be registered under California’s securities laws. As many employees are often offered stock in their initial employment offers, this is a powerful exemption. There are certain important rules that apply to this exemption so it should be reviewed carefully.

While these two exemptions cover many of the situations that arise when companies are seeking initial investments, this is not an exhaustive list. Small businesses should consult with an attorney before offering equity. Additionally, while this covers California exemptions, companies must also make sure to comply with federal laws.

California Attorneys Helping to Protect You from the Possibility of Securities Violations

The offering of securities such as stock or equity can be very complicated, and is a heavily regulated area of business. If you are considering the prospect of outside investment, you should make sure to get your ducks in a row, and have a grasp of the securities processes and requirements, before starting out.

At CKB Vienna, LLP, our attorneys can work with you to review applicable laws and restrictions, and to determine whether any special exemptions apply that will protect you from the threat of lawsuits or criminal penalties down the road. For more information, contact us online or at (909) 980-1040.

Converting from a Separation to a Divorce

Trusted California Attorneys

For many California couples, the prospect of ending a marriage through a final decision of divorce can be daunting and overwhelming. They may be reevaluating whether their marriage is in a good place, or ultimately the right thing to hold onto moving forward – but not yet ready to pull the plug entirely.

For these types of couples, legal separation can be a good alternative to divorce. It allows couples to go through the process of physical separation, and even consider dividing up assets and splitting child custody – but without finalizing these decisions too quickly.

One of the questions that often arises when considering separation is how a legal separation can be turned into a divorce, or whether separation precludes divorce entirely. The answer requires a look at California’s process for converting legal separation into divorce.

How an Initial Separation Works in Rancho Cucamonga

Before getting into how separation is converted into divorce, it is important to understand how the separation process works in California. When a couple wants to file for separation they file a petition with the courts, which is very similar to a divorce petition.

Where appropriate, when considering the petition, the court will help the couple with the division of assets such as a home, personal property, or even child support and child custody issues. Once all of the necessary details are finalized, a legal separation order can be entered.

The parties then act pursuant to that order until a point in time when they may want to change their status again. Obviously, this change would either come in the form of a complete divorce, or a continuation of their marriage.

Converting from Separation to Divorce

If at any point in the legal separation process one or both spouses decide that they would rather just get divorced, they can do so. Moving from separation to divorce does not require the agreement of both parties.

If a petition for separation has been filed but the other party has not yet answered that petition, then an amended petition can be filed. This amended petition can then be converted from a petition for separation to a petition for divorce.

If your legal separation is in process and both parties have filed with the court, then you will likely need to seek approval from the court to change the process from one for legal separation to one for divorce. Because of the significant overlap between the two processes, this is typically easy to do, but still requires judicial approval.

Unfortunately, if you have already received a final legal separation order, the process is not as simple. You cannot simply reopen the prior proceedings and have them changed to divorce proceedings, or convert the judgment. Instead you must file a new petition for divorce and go through the entire process again.

California Attorneys Helping You Weigh Your Options for Separation in Your Marriage

If you are considering separation or divorce, it is important to weigh the pros and cons of each procedure and evaluate how they are likely to work for you. It is relatively easy to convert a separation to a divorce while the process is ongoing. However, if you change your mind after the process is over, you’ll have to start all over again.

At CKB Vienna LLP, our attorneys can help you find the process that will work best for you, and assist you in preparing for petitions, hearings, and everything in between. For more information, contact us online or at (909) 980-1040.

Step By Step: The California Foreclosure Process

Knowledgeable Lawyers in California

Most California residents have heard of the concept of foreclosure and are no doubt aware of the prevalence of foreclosures during the 2008 housing crisis. But few understand how the mortgage foreclosure process actually works, or what banks and lenders must do to reclaim your home.

While many may believe that foreclosures are a judicial process that requires a lender to go before the courts in order to work out your financial issues, this is not usually the case. Most foreclosures in California are non-judicial and happen through a more administrative process.

Foreclosures in Rancho Cucamonga

The foreclosure process in California begins with the owner of the property, when he or she misses the first payment on a mortgage loan. This could be for any number of reasons – perhaps a family member loses their job, or an urgent medical crisis arises. Regardless of the circumstances, the failure to make a timely payment puts the bank on notice that the owner may have a problem.

Missing a payment by a few days usually is not a problem, as long as a homeowner quickly rectifies the issue and makes the payment as soon as possible. Rather, real issues begin to arise when the homeowner goes into default. Default typically occurs when the homeowner is behind on payments for 90 days.

A notice of default is the second step in the foreclosure process. This will happen after the homeowner enters default. The mortgage lender will typically file a notice of default with the court, and must then provide the owner with a copy within ten days. The owner’s copy will explain why the owner is in default and the options for getting out of default.

Depending on the bank or mortgage lender, an owner may be able to create a payment plan that will help to get out of default, and pay off all outstanding loan payments, interest, and fees.

When The Bank Or Lender Is Not Getting Paid

After an owner receives a notice of default, most lenders will give them three months to bring the loan current and make all outstanding payments. At the 180 day mark (90 days after default), the lender may begin official foreclosure on the home if the owner is still unable to pay.

Foreclosure means that the bank can attempt to auction off the home to recover the money that it has lended that the owner is no longer able to repay. This is usually done through what is known as a trustee sale. When the bank decides to go this route, it will notify the owner by providing a notice of trustee sale that sets the date for the auction of the home.

The bank must give the owner up to 20 days after the service of a notice of trustee sale to actually hold the auction to sell the home to the highest bidder. This may give the owner some last ditch opportunities to attempt to recover the home, either through negotiation or through the courts.

If the house does sell, the owner will be relieved of your financial obligations to the lender, even if the house sells for less than the amount that is currently owed on the loan. At the time of sale the owner loses both access to the home and responsibility for the debt incurred.

California Attorneys Helping All Parties through the Foreclosure Process

The foreclosure process can be difficult for all parties involved, including lenders, banks, and the debtor who owns the mortgage. Having a clear understanding of the process involved can go a long way toward avoiding disputes or difficulties in the process. At CKB Vienna LLP our attorneys have assisted clients on both side of the transaction through the foreclosure process and are equipped to handle simple foreclosures or complicated transactions. For more information, contact us online or at 909-980-1040.

What Does the Potential NAFTA Renegotiation Mean for the Automobile Industry?

Dedicated Attorneys Serving California

As many in the auto industry are no doubt aware, President Trump ran on renegotiation of the North American Free Trade Agreement as part of his winning platform. In recent months, the Trump Administration has proposed specific changes to NAFTA that directly impact the automobile industry.

What NAFTA Changes Might Affect Rancho Cucamonga?

First, the Trump Administration has proposed adding steel, aluminum, textiles, and many other materials currently used by auto makers to the tracing list under NAFTA. This means that proof would be required to show the origin of these materials and determine whether they have come from NAFTA countries or outside the region.

Second, the Trump Administration has proposed a significant increase in the auto rules of origin. The auto rules of origin dictate how much of a car must be sourced from within NAFTA to receive NAFTA benefits. Currently, 62.5 percent of cars must come from within NAFTA. The Trump Administration proposes increasing this percentage to 85 percent.

Additionally, the Trump Administration has also proposed adding a requirement that 50 percent of cars come from the United States, which would effectively require car manufacturers to build all vehicles within the United States, rather than other NAFTA countries.

These issues have become a significant source of contention for those in the automotive industry. Over the past two decades, many automakers have developed a complicated network of assembly plants that are used in their car production, many of which are located in Mexico. Changing the rules of origin, and adding a requirement that cars be produced in the United States would significantly change these networks.

Indeed, experts are concerned that the possible changes to NAFTA could greatly destabilize North America’s significant presence in the global auto industry. Adding these new requirements makes the production of vehicles more complex. Unsurprisingly, industry representatives in Mexico and Canada are also concerned how the proposed changes will affect their automotive industry.

NAFTA Moving Forward

Negotiations over the proposed changes to NAFTA remain ongoing, and most analysts expect that the Trump Administration will have to lower its rule of origin expectations if a deal is to be reached.

However, others have expressed concern that even if the Trump Administration is successful in increasing the percentage of cars that have to be made within NAFTA countries, and within the United States, the outcome will not ultimately be beneficial for the United States.

Currently, automakers must pay a 2.5 percent tariff to import cars from outside of the United States. For many U.S. automakers, this tariff may be substantially less expensive than the cost of reorganizing and reordering production in order to meet new rule of origin requirements.

Accordingly, some predict that the renegotiation of NAFTA may actually lead to more automakers moving production of vehicles out of the country and simply choosing to import finished vehicles from abroad.  

California Attorneys Keeping an Eye on Industry Movement

Dealing with national and international regulations is often a constant headache for United States automakers. The threat of substantial changes to governing rules, like NAFTA can create anxiety and consternation. At CKB Vienna LLP, our attorneys work hard to maintain contacts throughout the government and industry that help them to keep abreast of possible changes and upcoming developments. If you’re concerned about how these proposed changes could impact you, contact us online or at 909-980-1040.

Protect Your Brand: Register Your Trademark

Experienced California Attorneys

If you own a small business, you have likely worked hard to cultivate a certain image and reputation within your community, and perhaps even across the country. Often, your logo may be an important part of that image, conveying to potential customers the type of company you are and the type of product you offer.

While logos are great, they can easily be copied or ripped off by other less scrupulous business people if you do not have the proper registrations and protections. Logos are not inherently protected, but require specific registration as part of the federal trademark process.

How Do Trademarks Work in Rancho Cucamonga?

Trademarks can be registered or unregistered. Registered trademarks are registered with the U.S. Patent and Trademark Office, which is operated by the federal government. Once a trademark is registered with the office, it has special protections and the owner of the trademark is entitled to certain legal rights.

Unregistered trademarks may still be entitled to certain regional protections, but are not able to assert the broader rights that come with a registered trademarks. As a result, unregistered trademarks are more likely to be subject to infringement, or copying of the trademark by another.

Registering your trademark is a relatively straightforward process. You must file an application with the USPTO. You must show that you currently have a business that is using the trademark so that it is “in Commerce.” Alternatively, you may also file an intent to use the trademark, and then update your registration once the trademark is being actively used.

In order for your registration to be successful, your proposed trademark, or a similar mark, must not already be in use by a different company operating in a similar type of good or service as you. For example, if you make pasta, your trademark cannot be identical or similar to an existing trademark for another food company. However, it is likely okay if your trademark is similar to that of a washing machine company.

What Registering Your Trademark Protects

Going through the process of trademark registration may at first seem like a lot of work for little reward, but the reality is that trademark registration entitles you to very important protections.

After you register a trademark, if a competing company in a similar market tries to use a brand name or logo identical or similar to yours, you can file a lawsuit to protect your mark in federal court. If the court finds the competitor is infringing on your mark, your competitor will be ordered to stop using its name or logo. Additionally you can also seek monetary damages against the infringer, including damages your business suffered as a result of the competitor using a similar mark.

California Attorneys Helping You Protect Your Brand Image

If you’ve taken the time to create and perfect a name or image for your company that your customers recognize and respect, it is also worth the time and effort to protect your creation against being copied or misused by others.  At CKB Vienna LLP, our attorneys have guided countless clients through the trademark process and are available to answer any questions you may have about trademarking. For more information, contact us online or at 909-980-1040.

How Does California’s Homestead Real Estate Law Work?

Trusted California Lawyers

As homeowners who lived through the 2008 recession know, tough times and unfortunate circumstances can bring the threat of foreclosure on a personal home. Foreclosure can be a terrifying prospect for any family, and is a process that is not easy to resolve.

Thankfully, California has a homestead real estate law which helps to protect homeowners in difficult times. Under this law, homeowners who face threats of outstanding debts or judgment liens can protect their home from being seized as an asset by their creditors, and prevent a situation where they may end up out on the street.

How Does the Homestead Real Estate Law Work in Rancho Cucamonga?

California’s homestead real estate law provides protection to an individual’s primary residence in the event that a creditor seeks to foreclose on the residence in order to recover on a debt. Under the law, a homeowner can declare a property as a homestead, in order to insulate it from the reach of creditors.

However, depending on the age of the homeowner, the homestead may be protected only up to a certain value. For example, for those over the age of 65, $175,000 of the home is protected under the homestead law. For those under 65, the maximum amount that can typically be protected is $75,000.  So for those with large and extravagant homes, it may be difficult to actually entirely protect the home from a forced sale.

You may be wondering how only a certain value of the home can be protected from a creditor or foreclosure. In practice this means that if there is no value in the home, after any existing liens and the homestead exemption are applied, the creditor cannot force the sale of the home.

For example, say you have a home worth $250,000 but you have a creditor whom you owe $75,000. The creditor wants to force the sale of your home for his judgment. You have an outstanding mortgage on the home of $175,000. To determine whether the creditor can force a sale, the calculation looks like this:

$250,000 minus 170,000 minus 75,000 equals 0

Because the value of your home is tied up in existing liens and your homestead exemption, the creditor cannot force the sale of your home.  

Voluntary and Involuntary Liens

One important caveat to the protections provided by the homestead real estate law is that these protections only apply to involuntary liens. These are liens that you did not take on yourself, but that were brought against you, often by virtue of a judgment that someone obtained against you.

For example, when you purchase a house and take on a mortgage, this is a voluntary lien. Car loans are also voluntary liens, as are liens you owe for federal taxes, or for child support. So you cannot fail to pay your mortgage for your house and then claim a homestead exemption to retain part of the value of your house when the bank forecloses on your mortgage. Homestead protections don’t apply in that circumstance.

California Attorneys Advising You on How to Maximize Protection of Your Home

No one wants to lose their home as a result of a bankruptcy or an outstanding judgment lien. In order to protect yourself, you should consider how the homestead exemption may apply to your circumstances. If you are facing debt or foreclosure issues, the attorneys at  CKB Vienna LLP can work with you to evaluate your assets and liabilities and determine how to best protect your home. For more information, contact us online or at 909-980-1040.

Is Your Non-Disclosure Agreement Enforceable?

Attorneys Serving California Clients

For some employers, a necessary part of any employment relationship is the assurance that your employee will not be able to share confidential information or trade secrets learned during the course of employment.

For those dealing in highly competitive fields it can be crucial to ensure that your employees will be legally prohibited from passing such information on to others. This is one of the primary reasons for non-disclosure agreements.

In California, non-disclosure agreements are generally legal, but they must be properly drafted or they can be deemed unenforceable. In order to avoid bigger problems down the road, employers should take the time to ensure that their current agreements are enforceable as written.

What Can Non-Disclosure Agreements Legally Prohibit Rancho Cucamonga Residents from Sharing?

Properly drafted non-disclosure agreements can prohibit employees from sharing a broad range of confidential business information. For example, they can protect:

• Proprietary information

• Trade Secrets

• Prototypes or other technology not yet patented

• Customer lists and contact information

In California, trade secrets must meet a very specific definition. A trade secret must be a specific  formula, pattern, device, etc., that is valuable precisely because it is not known to the general public. Also, there must be reasonable efforts undertaken to protect its secrecy. Non-disclosure agreements cannot simply claim to prohibit sharing information regarding trade secrets without showing that a trade secret actually exists.

Non-disclosure agreements also cannot prevent an employee from discussing absolutely anything related to an employer or a business, with no limitations in scope whatsoever. This type of non-disclosure would be considered overly broad and unduly restrictive, since it would be almost impossible to abide by.

What Does an Enforceable Non-disclosure Agreement Require?

Legally enforceable non-disclosure agreements should include certain key provisions. First, they should clearly identify the parties to the agreement, including the employer, the employee and any other relevant parties or individuals. Second, the agreement should set forth exactly how long it is enforceable. The time limit for an agreement must be reasonable, and courts typically will not uphold an overly long period such as 50 years or more.

Next, the agreement should set forth precisely what the scope of the confidential information is, with sufficient clarity for the employee to understand what cannot be discussed. For example, if there are certain proprietary procedures that are protected under the agreement, these should be clearly identified.

Additionally, the agreement should also clearly explain what the employee’s obligations are as far as keeping the information confidential. And these obligations must be reasonable. For example, an employee whose information is stolen without his knowledge normally would not be held to have violated a non-disclosure agreement – unless he failed to abide by certain security obligations in the agreement.

Finally, the agreement should set forth information and terms for what is excluded from the non-disclosure agreement. For instance, if a certain recipe is deemed confidential, the agreement should make clear whether the details of the recipe are protected from disclosure, or if even reference to the recipe altogether is prohibited.  

California Lawyers Helping You Draft a Strong Non-Disclosure Agreement

The best way to protect your company’s secrets from disclosure is to ensure that your non-disclosure agreement is as legally enforceable as possible. This requires continuous review of your policies, procedures, and draft documents to ensure that they are up-to-date with California laws.

At CKB Vienna LLP, our attorneys can help you review whether your nondisclosure agreement contains all the necessary terms and provisions, and has a scope that is not overly broad. For more information, contact us online or at 909-980-1040.

What to Do When You Get That Litigation Hold Letter

Lawyers Serving California

Whether you are a business executive or low level employee, you’ve likely received a warning at some point in your career to preserve your emails due to a pending dispute or litigation. When the possibility of a lawsuit becomes real, many parties will send out “litigation hold” letters requiring a company to hold onto any documents or communications that may be relevant to the dispute.

Litigation hold letters must be treated very seriously, and the knowing failure to abide by one can lead to accusations of intentional destruction of evidence and even the possibility of sanctions. For this reason, all general counsel and corporate executives should have policies and procedures in place to ensure an efficient and effective response to a litigation hold request.

Pay Attention to What Is Required in Rancho Cucamonga

Litigation hold notices do not require a business to preserve every record or email it has ever created. Particularly for large corporations, this would be impossible. Instead, they typically relate to a certain matter or dispute that is the subject of possible litigation and require the recipient to locate and hold onto any records related to that matter.

For this reason, the first step in responding to a litigation hold is to carefully review what is being asked of you. Consider the matter at issue and the individuals likely to have relevant information or records about that issue. Then consider how the matter can be described in a comprehensive, but clearly defined way that will allow your employees to quickly locate potentially responsive records.  

Making the prospect of locating and holding onto records more time-intensive or arduous than necessary will only discourage employees from putting in the effort necessary to ensure compliance with your legal obligations.

Disseminate Notice of the Hold Broadly

After considering the requests made in the litigation hold letter and the matter at issue, you likely will identify certain top executives or key players who will be in possession of relevant records. While it is important to inform them and any key custodians of the litigation hold request, the obligation does not end there.

It is important that all potentially relevant employees be notified, in writing, as to the specific records and documents being requested. They must be directly asked to review their files, both electronic and paper, for anything that might be relevant. Employees should also be encouraged to ask questions or seek clarification if they are unsure if documents are responsive, rather than erroneously exclude certain materials from their search.

A litigation hold notice to employees should also make clear that records can come in many forms. While we often think of memos and emails, records can include calendar entries, day planners, text messages, voicemails, and even social media. Your employees should be taking care to ensure that all of these potential sources of information are being reviewed.

Make Sure Your Efforts Are Documented

Mistakes happen and important documents do occasionally get deleted.  Despite your best efforts, responsive materials can occasionally slip through the cracks. The best way to prevent this from having an impact on your litigation position down the road – and preventing the possibility of sanctions – is to clearly document your efforts.

This documentation should be done externally and internally.  Within your organization, make sure that instructions for searching and preservation are kept in writing and saved for future reference. Encourage employees to keep records of the searches they conduct and to provide written reports of their preservation efforts and the results.

Similarly, any response to a litigation hold letter should carefully detail the steps that have been taken to comply, including notices sent out and documents reviewed. To the extent that you have deemed certain categories responsive or unresponsive it is also helpful to detail these decisions in a response, thereby placing the burden on the opposing party to object to your approach.

California Attorneys Helping You Anticipate Litigation

A good strategy for dealing with litigation hold letters can go a long way towards helping your company anticipate and prepare for litigation more broadly. Getting an early understanding of the documents relevant to a legal matter can give your team a better sense of your strengths and weaknesses, and let you know when it may be time to bargain.

At CKB Vienna LLP, our attorneys can help you create and manage a litigation hold response, or review your existing policies and procedures. For more information, contact us online or at 909-980-1040.

Doing Your Due Diligence Before A Merger: What Do You Need to Know

Skilled Lawyers Serving California Businesses

As your company continues to grow and prosper, there will undoubtedly be many opportunities for you to sell to other corporate entities. Likewise, you may also find yourself thinking of acquiring smaller competitors or start-ups new to your commercial space.

These types of sales – often known as mergers and acquisitions – can be excellent opportunities for you to:

• expand your brand name,

• enter into new markets,

• acquire capital,

• acquire talent,

• all of which are necessary to continue to move forward as a company.

Mergers and acquisitions also require significant research and due diligence. Obviously, it is important to avoid acquiring a company that is ultimately a bad investment, and to eliminate the possibility of being taken over by another entity’s disorganized and inexperienced leadership team. When beginning due diligence, there are several important steps to consider.

The Goals of Due Diligence for Buyers and Sellers in Rancho Cucamonga

Buyers and sellers entering into a merger or acquisition will have very different goals and objectives that they want to achieve during the M&A process.

Sellers will typically want to complete the acquisition as quickly as possible in order to avoid the potential for any unexpected events, such as a key employee departure or lawsuit, to arise. Sellers will be more focused on simply ensuring an acceptable change of control, and minimizing the possibility of a buyer backtracking on a purchase.  

Buyers, by contrast, will want to take the process more slowly. The value of their purchase comes from ensuring that the entity they are buying is exactly what it says it is, and has the possibility to enhance their existing economic value. This means a careful review of the seller’s existing business structure, prior performance, and anticipated future performance.

Necessary Parts of Any Good Due Diligence

Whether buyer or seller, there are several important categories of information that you will want to include in your due diligence checklist. Reviewing this type of information will help you go into a transaction fully prepared and aware of all possible outcomes and contingencies.

• Corporate Structure documents, including articles of incorporation, bylaws, minutes from board meetings, and stockholder agreements. These documents will give you insight into how the company is structured and who has a vested interest in the company’s success.

• Taxes. Tax documents will shed light on any existing or prior tax liabilities, and also provide additional information about a company’s revenue sources and outstanding debts.

• Documentation of existing assets of the company.

• Existing contracts, which show a company’s ongoing consumers, but also make clear the responsibilities that the buyer will have to assume upon completion of the deal.

• If in a technological field, any documents concerning intellectual property that the company currently holds.

• Documents concerning any pending litigation involving either party.

While these are many of the big areas of concern that any due diligence approach should cover, they are not the only documents you may need to review. Depending on your industry or the circumstances of your merger or acquisition, there may be many other areas of necessary review.

California Attorneys Providing a Comprehensive Due Diligence Approach

While it is possible to go it alone in the due diligence process, and handle a merger or sale on your own, it is not recommended. Due diligence is an extensive, exhausting process that can require significant time and energy, as well as detailed knowledge about the documents being reviewed.  Hiring an attorney to assist you can make the process much smoother and ultimately, more successful.

At CKB Vienna LLP, our attorneys have handled mergers and acquisitions, and the due diligence process, for hundreds of clients throughout Rancho Cucamonga and the surrounding areas. For more information, contact us online or at 909-980-1040.

Understand the Limits on E-signatures in California

Savvy Lawyers Serving California Clients

E-signatures are an increasingly common part of business practices throughout the United States. Rather than requiring a customer to be physically present in an office in order to sign a paper contract, e-signatures allow consumers to review and sign contracts from the comfort of their own home, without the pressure of a sales person sitting in front of them.

E-signatures have generally been viewed as a step toward giving consumers greater ownership over their purchases. People also see them as improving efficiency and increasing the rate of successful contracts completed for sellers. However, they are not without controversy and limitation.  

If you are an automotive company or dealership operating in California, for instance, it is important to know that e-signatures are not allowed for new or used car sales. This is likely different from many of the other states you may operate in. Using e-signatures in California may result in lawsuits or an investigation against your company.

The Legality of E-Signatures Throughout the United States and In Rancho Cucamonga

In the early 2000s, the United States passed a law permitting electronic signatures on contracts, known as the Electronic Signatures in Global and National Commerce Act. Under the law, businesses and retailers may sell products to consumers – including  products with loans, such as cars – as long as the electronic contracts continue to abide by Truth in Lending Act requirements, including a full disclosure of necessary terms.

California, likewise, has their own state law governing electronic transactions known as the California Uniform Electronic Transactions Act (UETA). Currently, the CUETA allows e-signatures contracts, but carves out several important exceptions meant to protect consumers.

For the auto industry, one of those exceptions is very important: electronic signatures may not be used on new or used auto sales or lease contracts. California is the only state in the nation that prohibits e-signatures on auto contracts, which means that dealerships and car companies must be wary of using standard forms and practices in California.

The Concern for E-signatures in California

While California does not dispute that e-signatures improve efficiency for consumers and for retailers, the state, and consumer groups, have been concerned that the use of e-signatures increases the potential for abuse. The thought here is that e-signatures makes it easier for consumers to overlook the finer details of their contract. This, of course, leads to buyers finding out later that they have agreed to terms they were never previously informed of.

While auto industry representatives counter that these fears are not born out in reality, and that electronic contracts are as easy to read and understand as paper contracts, they have not yet had success in eliminating this exception.

Earlier this year a bill, AB 380, was introduced into the California legislature which attempted to remove the auto sales exception from the UETA – and give auto dealerships the option to offer e-signatures to consumers if they preferred. While the bill initially had strong legislative support, it was eventually abandoned after significant push back from consumer advocates and consumer groups.

California Attorneys Advising You On Technological Advances and Limitations

The e-commerce and e-signature arena is an area of constant evolution. New technologies continually seek to make the retail sales space more efficient for sellers and consumers, and safer for all parties involved.

With these changes come constant updates to regulations and legal protections for consumers, which require a watchful eye and continual review in order to ensure compliance. At CKB Vienna LLP, our attorneys consistently review new legislation and federal rules applicable to automotive companies, and work with industry representatives to stay on top of new trends and lingering concerns. For more information, contact us online or at 909-980-1040.

Adverse Possession: When Do You Face the Risk?

Decisive California Attorneys

Most of us understand that when we purchase a home or a piece of property, we own that real estate until we choose to sell it, loose it to foreclosure, or pass away. What many property owners do not realize is that in certain situations, the land you own, or portions of it, can be acquired by others through an obscure process called adverse possession.

Adverse possession is a process whereby a third party who regularly uses your land without your permission, can acquire your land over a period of time. While acquisition through adverse possession is a long and difficult road, it is one that every property owner should be aware of in order to minimize the risks of unexpected property loss.

What Does Adverse Possession in Rancho Cucamonga Require?

Under California law, in order for an individual to claim title to land by adverse possession, he or she must establish certain requirements:

• The possession must be hostile which means without permission and adverse to the current owner

• The adverse possessor must be exclusively using the property or a portion of property

• The possession must be open and notorious

• The adverse possessor must use the property for at least five continuous years.

• The adverse possessor must pay all applicable taxes on the land or portion of land for the five year period

The individual seeking to prove ownership by adverse possession (often referred to as the trespasser) has the burden of proving all of these elements.  Only after the trespasser makes an initial showing that all of five elements are met does the original owner bear the burden if disproving one or more of the elements.

How to Prevent Adverse Possession from Occuring

The easiest way to prevent a claim for adverse possession is to keep a close and watchful eye on your land. If you notice that a neighbor is frequently using your land to get from his home to a nearby lake, for instance, or has built a shed on your property, you have two options.

First, if the neighbor’s actions are not actually bothersome to you, but you want to prevent any issues down the road, grant the neighbor written permission to use your property in this fashion. Written permission negates the very first element of an adverse possession claim, as the use is no longer hostile or adverse. Use with permission can go on for any number of years without rising to an adverse possession claim.

Second, if you do disagree with your neighbor’s actions, but cannot bring him or her to stop what is happening, consider a claim for quiet title. A quiet title action essentially asks a court to declare the rights that individuals have, if any, to a piece of land. If your neighbor has no right to build a shed on your property, the court will tell him so and order him to cease building. This also prevents any later claims from arising.

California Lawyers Protecting Your Real Estate Investment From Threat

The property you own is often the most important investment you will ever make. Over the course of your lifetime you will undoubtedly pour your time, money, and hard earned effort into protecting and managing your land, which makes the threat of an outsider acquiring your property, or a portion thereof, even harder to swallow.

If you are concerned about acquaintances or unknown third parties who may be regularly using your land without your permission, the attorneys at CKB Vienna LLP can help you evaluate your situation and make a plan for protecting your property rights. For more information, contact us online or at 909-980-1040.

Does Your Arbitration Agreement Include A Class Action Waiver?

Skilled California Lawyers for Business Compliance

Arbitration agreements are a fairly common practice across the financial and banking industries. When consumers have a dispute with a credit card or banking provider, or contend that their financial servicer violated the law, arbitration agreements require the consumer to pursue the disagreement through arbitration rather than litigation.

Arbitration allows disputes to be handled in a more cost effective and efficient manner, often in a shorter period of time than a lawsuit. It also means that disputes are heard by a panel of arbitrators rather than a jury, and that the results of the arbitration can be kept fairly private.

All of these advantages makes arbitration preferable for banks and financiers, and courts generally allow companies to require their customers to go to arbitration through arbitration agreements. However, new rules have made clear that these agreements may not require consumers to waive their right to class action litigation.

The Right to Class Action Litigation in Rancho Cucamonga

In many instances, consumers who have disputes with a company will bring their claims through individual litigation, where they assert that the particular actions or decisions of a company have caused them damage.

In certain situations, however, a group of consumers may all claim that the same decision or action by a company has caused them harm. For instance, this often happens in medical cases where large numbers of patients are harmed by the same procedure or drug. It can also happen when consumers are deprived of certain financial benefits or opportunities.

These are known as class action cases, and they are a special type of litigation that allows large numbers of plaintiffs to resolve their claims all at once. All individuals have the right to participate in class action litigation if they have relevant claims.

Arbitration Agreements and Class Actions

As stated previously, California courts allow companies to require consumers to handle their individual lawsuits through arbitration by signing an arbitration agreement. However, some companies have tried to use this language to also prevent consumers from participating in larger class action litigation.

Recently, the Consumer Financial Protection Bureau (CFPB), instituted new rules clarifying that companies may not use arbitration agreements in this manner. Under these rules, the language in arbitration agreements may not bar plaintiffs from joining in class action litigation, where it is relevant to their claims.

The practical effect of these new rules means that:

• consumers will have more options for pursuing claims against financial and banking companies, but

• companies will run the risk of increased uncertainty when dealing with potential disputes and higher litigation budgets in the event that class action is pursued.

California Attorneys Monitoring Your Compliance With CFPB Rules

If  you are currently working in the consumer finance and banking arenas and have an existing arbitration agreement that you use with consumers, there is a good chance that you will need to review the language of your agreement and update it to comply with the CFPB’s rule changes. Failure to do so could lead to problems down the road.

At CKB Vienna LLP, our attorneys can advise you on the necessary changes to keep your arbitration agreements compliant with current rules and restrictions, and keep you advised of further changes that may occur. For more information, contact us online or at 909-980-1040.

Registering Your Cannabis Trademark

Experienced Lawyers for California Clients

In the highly competitive world of cannabis sales, having a recognizable name and brand is an increasingly important part of running a successful business. Consumers can often find it hard to differentiate between the many products available in the retail space, and will turn to brands they recognize, or that their friends recommend, as a safe option for purchasing.

While developing a strong brand reputation is vitally important, it is equally important for cannabis businesses to take the necessary steps to protect that brand name. If not, they may find that competitors are soon attempting to use that brand for their own benefit, or creating knock-offs to confuse consumers. One of the best ways to protect your brand is through the registration of your trademark.

How Do Rancho Cucamonga Cannabis Businesses Register Their Trademark?

Trademark registration is the process of having the federal government acknowledge your particular brand “mark” and determining that you are the official and exclusive owner of that mark for your particular industry. If another company then attempts to use your mark, or a similar mark, to market a product that is in the same commercial space as yours, you have legal recourse to stop them from doing so.

Trademark registration happens at the federal level through the United States Trademark and Patent Office, and as of January 1st, will happen with the California Secretary of State’s Office as well. Beginning in 2018, cannabis businesses may register their cannabis-related trademarks with the Secretary of State as long as they meet two important requirements:

• First, the company must be lawfully using the mark in the commercial industry in California.

• Second, the product a company is seeking to trademark falls within the current classification of good and services adopted by the USPTO.

Before rushing to get your application for registration filed with the California Secretary of State, it is important to understand exactly what these two requirements mean.

Are you Lawfully Using Your Trademark?

At the federal level, companies that develop a trademark for a product that they hope to start producing can file trademark registration applications called “intent to use.” This means that the company is seeking to register and protect a trademark that it plans to use in the future.

However, under California’s new law, companies may not seek “intent to use” registrations. Instead, the company must already lawfully be using the trademark in their commercial operations. This requires two things.

First, the cannabis company looking to register their trademark with the Secretary of State’s office must have already sold the goods or services that it wishes to trademark in California at the time of registration. Not only must the product be in existence, but the company must be actively marketing and selling it for a registration to be approved.

Second, the company must be doing so lawfully. Selling your product on black markets, under the radar, or out of your garage will not make the cut for trademark registration purposes. Instead, you must be able to prove that your business has acquired all relevant licenses and is fully in compliance with California regulations while selling the product for which you wish to register a trademark.

If you cannot meet either of these two requirements then the first step toward California trademark registration is:

• to get your business up to speed in operating lawfully, and

• get the product you are interested in protecting out into the market.

Do You Fall Within the USPTO’s Current Classifications for Goods and Services?

The second part of California’s trademark registration process requires that the product that a cannabis company is seeking to trademark falls within an existing USPTO classification.

When you register a federal trademark with the USPTO, you must identify the goods and/or services for which you are seeking a trademark. This is because your potential trademark must be compared to others within a similar industry to make sure that no duplication or overlap is occurring.

When trademark registrations are approved, they are approved for a provision of a certain category of goods and services. Their purpose is not to universally exclude anyone from ever using a similar context in any industry, anywhere in the world. This is why a trademark registration application must identify the goods and services for which the trademark will apply.

For instance, when Ben & Jerry’s registered their trademark, they likely described their goods and services as being related to ice cream and food sales. If another food company comes along and tries to use that name or a similar name for another food-related product, their trademark will likely be denied. However, if they tried to register Ben & Jerry’s to provide construction services, the trademark application may be approved.

The USPTO sets forth acceptable goods and services identifications in a manual that it updates on a yearly basis. Cannabis companies applying for California registration must be able to show which goods and services categories they fall within. While this will be easy for those companies providing more traditional services, like a retail store – it may be more difficult for those selling novel cannabis goods. A lawyer can help you review what classifications might apply to your product.

If you cannot identify an acceptable existing classification, it may be difficult to get a California trademark registration. The next few months will shed light on how California treats trademark registrations for those items that do not yet easily fit within existing USPTO classifications.

California Attorneys Assisting You With Trademark Registration

If you have a brand that has recently gained popularity, or which your consumers now regularly recognize or identify with, you should be considering trademark registration. With the opening of registration in California in 2018, now is the perfect time to consider your trademark options.

At CKB Vienna LLP, our attorneys can help you assess your options for trademark registration and whether you will be able to meet California’s new requirements. For more information, contact us online or at 909-980-1040.

How To Value A Cannabis Business

California's Trusted Lawyers for Cannabis Business Valuation

Whether you are considering starting your own cannabis business and are wondering about the long-term value of your investment, or you are evaluating the possible purchase of another company, it is important to understand how valuation works in the cannabis market.

Because the cannabis industry is still a new industry, with a significant amount of legal risk and potential fluctuation – valuing a company that you have started, or that you hope to purchase, can be challenging. As the industry continues to grow, certain markers have developed for evaluating value and growth potential, and making an educated decision about good business opportunities.

Analyzing Business Valuation in Rancho Cucamonga

Any successful purchase or sale of a cannabis business requires that the seller and buyer agree on a fair value for the business. For obvious reasons, a buyer will naturally want a lower price in order to increase potential profitability, while a seller will want to sell for the highest price possible. In order to make sure that both parties are satisfied, it is often necessary to conduct an independent valuation.

There are two primary means of valuing cannabis businesses. But due to the newness of the industry and the lack of publicly available data, both are still somewhat speculative. These two approaches are:

• Asset-based valuation

• Earnings-based valuation

Asset-based valuation looks primarily at the assets that the company has in its possession. This can include tangible assets such as equipment, plants, and staff. However, it also includes intangible benefits like brand name recognition, a loyal customer base, and relationships with government regulators and administrators.

In the cannabis world, a license to operate a cannabis business can also be of significant value, particularly where such licenses are difficult to come by. In Washington for instance, the restriction on the number of licenses to be issued has meant that ownership of a license itself is valued at upwards of $500,000.

What asset-based valuation does not take into account is the unique opportunities for potentially explosive growth in the cannabis industry, and what this might mean for potential earnings. Some buyers may appreciate the more conservative asset-based approach because it acknowledges the inherent risk in the industry and that growth is not guaranteed.

Others, however, may prefer to take an earnings-based valuation approach, which does consider the possibility of significant future earnings returns. Under an earnings-based approach, a base multiplier amount, such as two or five, is applied to the current net revenue of the company to be sold. For instance, a company with $200,000 in revenue would be worth one million dollars with a multiplier of five.

The difficult aspect of the earnings-based approach in the marijuana industry is that no set base multiplier has yet been established. In more developed industries, such as retail, with far less potential for risk, valuation experts have generally agreed on the appropriate multipliers that should be applied during a sale.

In the cannabis industry, the sale of a business is still new, and a great deal of risk and uncertainty remains within the industry. Therefore, disputes continue over the appropriate multiplier that should be applied, and one can anticipate that a seller will always want a higher multiplier than a buyer in an earnings-based valuation.

Do Your Due Diligence

No matter which valuation approach you decided to use, there are certain fundamental due diligence steps that every potential buyer should take when considering a cannabis business purchase.

First, ensure that you have received all of the necessary and important documentation related to your potential purchase. For an earnings-based valuation this should include detailed documentation to support all earnings figures for the years that the company has been in business, as well as any outstanding debts and liabilities. For an asset-based valuation, this should include documentation to verify ownership and value of all purported assets.

Second, you will need to obtain verification from the seller that the business is in compliance with all applicable California regulations and restrictions and has all necessary approvals and licensing. Given the strict controls on the cannabis industry, the last thing a buyer wants is to purchase a company acting illegally.

Third, the cannabis industry faces unique challenges that make particular aspects of a business, or assets, very important. For example, the cannabis industry faces unique challenges in acquiring adequate storefront and warehouse space, with location and potential industrial space quickly requiring payment of a significant premium. For this reason, verifying the details of any deeds or leases for the company you want to acquire can be very important.

Likewise, with the rapid expansion and growth in the cannabis industry, and so many new businesses entering the arena, the protection of brands and trademarks is also particularly important for continued growth. Any potential buyers should make sure that the business they are acquiring has properly registered all applicable trademarks and is not facing any pending trademark disputes.

While hiring a lawyer and/or valuation expert to help you navigate the purchase or sale of a cannabis business is not mandated, it is highly recommended.  Given the inherent risk in the industry – as well as the highly specific factors mentioned above – handling a cannabis business acquisition comes with significant challenges.

California Attorneys Guiding You Through the Cannabis Valuation Process

While business purchases always involve a degree of risk, and require meticulous attention to detail, this is particularly true when dealing with a cannabis business. Because the industry is a new and growing one, with significant potential and also heavy regulation – properly valuing a company for sale requires the input of experts familiar with the unique needs of the industry.

At CKB Vienna LLP, our attorneys are at the forefront of industry trends in California and can help you develop an honest assessment of the value of your company, or a company you are considering purchasing.  We will work with local valuation experts, industry professionals, and your staff to help you make the best possible purchase. For more information, contact us online or at 909-980-1040.