Child Custody Modification in California

Child Custody Modification in California

Child custody in California is enforced by court orders, the violation of which can result in a contempt of court charge or even jail time. So what happens when circumstances change such that the existing child custody order no longer makes sense? Fortunately, the California family court system offers a process for modifying a child support order. Like many things in life, however, there is an easy way and a hard way to go about it.

The Easy Way: Mutual Agreement

The easiest way to modify a California child custody order is to reach an agreement with the other spouse. The agreement must be put into writing, both parents must sign it, and it must be submitted to the family court judge. The judge will evaluate the request based on the “best interests of the child” standard, and if he approves it, he will sign it. The agreement then becomes legally binding on both parents.

The Hard Way: Allege a Change in Circumstances

If you cannot reach an agreement with the other parent, you will need to proceed unilaterally by alleging a change in circumstances that justifies modification of the current custody arrangements. This procedure is essentially adversarial although the court may have both parents meet together with a mediator in an attempt to reach an agreement before an adversarial hearing takes place.

Examples of Changes in Circumstances

California family courts will not accept just any change in circumstances as justification for modifying a child custody order. The following are some examples of typical changes in circumstances that might motivate a court to modify a child custody order:

  • The child’s primary residence is or has become unsafe in some way (including psychologically).

  • One parent has become unable to comply with the child custody order due to being convicted of a crime.

  • The parent with primary physical custody has failed to adequately provide for the child’s needs.

  • One parent needs to change residences (due to a job offer, for example), and the new residence is some distance away from the child’s primary residence.

  • The child has grown older and wishes to change custody arrangements (the judge is not bound to accept the child’s wishes, however).

  • One parent has become unable to care for the child due to the onset of an illness.

Procedure

To modify a California child custody order without an agreement with the other parent, you will need to fill out certain forms such as Form FL-300, file the forms with the court clerk, have a third person personally notify the other parent of the proceedings, and attend a hearing. The court might require you to attend mediation before the hearing.

This is a job that must be done right.

A single error in filing for child custody modification could result in significant delay or in modifications that were different than what you expected. Your application could even be turned down. Call CKB Vienna now, or fill out our online contact form to schedule a consultation so that we can help you give it your best shot. We serve clients in Rancho Cucamonga, San Bernardino County, Los Angeles County, Orange County, and Riverside County.

Basic Features of a California Employment Contract

Basic Features of a California Employment Contract

It is never a good idea to draft an employment contract using a template that you found on the Internet. Every employment arrangement is unique, and subtle drafting mistakes could result in serious consequences that are difficult to foresee without the benefit of legal training. Nevertheless, most employment contracts have certain basic features in common. Some of these are listed below.

Employee’s Duties: This section should clearly describe the position and what is expected of the employee. If you have published an Employee Handbook that includes work rules (and you definitely should have), you can refer them to this section rather than putting them all in the contract.

Employer’s Duties: This section should include a listing of the support the employer will provide (a personal computer, work tools, etc.). You should also list the expenses for which the employer will compensate the employee (work-related travel, for instance) as well as general employer duties.

Contract Term: Employment can be at-will (until the employee is fired or quits) for a fixed term (one year, for example) or until the completion of a particular project.

Events of Termination: Which events will automatically terminate the contract? You should list certain offenses for which the employee can be immediately terminated as well as other termination events such as mutual agreement, company bankruptcy, etc.

Compensation and Benefits: List the employee’s salary, bonuses, disability benefits, death benefits, insurance, severance pay, company automobile, etc., as well as the terms and conditions that apply to these benefits (how the employee qualifies for a bonus, for example).

Confidentiality: This clause should be drafted with particular care if the employee will have access to company trade secrets. It is usually OK to define all work-related information as “confidential.”

Intellectual Property: Intellectual property might not matter much if you are hiring a cake decorator, but it will be critical if you are hiring a software engineer. Be sure to include a clause defining all employee-generated intellectual property as “works for hire” so that the employee cannot claim ownership of, say, a software source code.

Damages for Breach: Damages for breach of an employment contract are fixed by California law even in the absence of an employment contract. You could, however, include a carefully drafted liquidated damages clause, especially with respect to intellectual property infringement.  

Dispute Resolution: In the event of a dispute, must the parties attempt negotiation first? If negotiations fail, do they go to court or to arbitration? All of this should be settled in a clearly-worded dispute resolution clause.

Boilerplate: Severability, survival, merger, force majeure, and similar clauses that appear in most business contracts are almost always necessary. These sections may look like meaningless “legalese,” but they are frequently of critical importance once a dispute erupts. Don’t use a template – have a lawyer draft these clauses for you.

Do not include a non-compete clause that binds the employee’s choice of employers after the termination of employment. This is because California does not enforce non-compete clauses except under very limited circumstances. Including a non-compete clause and failing to include a severance clause could result in invalidation of the entire agreement during a dispute.

Contacting Us Now Could Save You a Lot of Trouble Later

A poorly drafted employment contract is like a time bomb waiting to go off – except that the fuse can burn for years before an explosion occurs. If you need help drafting an employment contract or resolving an employment dispute, call CKB Vienna today or fill out our online contact form to schedule a consultation. We serve clients in Rancho Cucamonga, San Bernardino County, Los Angeles County, Orange County, and Riverside County.


Questions That California Employers Cannot Ask Job Applicants

Questions That California Employers Cannot Ask Job Applicants

Not all speech is protected by the First Amendment – and rightfully so since it would not do to allow someone to shout “Fire!” in a crowded theater. California and federal law prohibits employment discrimination based on race, religion, nationality, and a dozen other human characteristics. To enforce these prohibitions, California employment law forbids employers from asking job applicants certain types of questions that could be used to evade anti-discrimination laws.

The following types of questions either cannot be asked or can only be asked under certain circumstances:

“Are you a US citizen?”:  The more appropriate question to ask is: “Do you have the legal right to work in the United States,” which is certainly relevant. Non-citizen permanent residents may work in the US, and even temporary visitors may work if they have been issued a work permit.

“Are you male or female?”: This question is forbidden unless gender is a “bona fide occupational qualification (BFOQ) reasonably necessary to the normal operation of the business or enterprise.” An airline, for example, cannot hire only female flight attendants, but the Hooters restaurant chain is entitled to hire only female servers.

Are you married? Do you have children?”: Questions about family status are generally off-limits. One exception is: “Are you related to anyone who works here?” – under limited circumstances.  

“Are you pregnant?”: You might think that asking this question would be legal since employers are typically liable for the costs of maternity leave. Nevertheless, it is forbidden along with questions such as: “Do you plan to have children” or “Do you breastfeed your child?”

“What are your religious beliefs?”: This question is off limits unless it is a bona fide occupational qualification. It is acceptable, for example, to ask an applicant for pastor what his religious beliefs are and to turn down his application based purely on his religious beliefs (or lack thereof).

“How old are you?”: Questions about age are off limits unless it is a bona fide occupational qualification. As an example, many jobs cannot be legally performed by anyone under 18, and it is OK to confirm that the applicant meets legal age requirements.

“Are you disabled?”: This question is acceptable to the extent of a disability that would affect job performance or would require the employer to make special accommodations.

“Please provide a photograph of yourself”: It is illegal to require the applicant to submit a photograph prior to hiring him unless appearance is a bona fide occupational qualification – a position as a fashion model, for example.

Questions about the applicant’s gender identity: “Were you born female?”, for example, is a prohibited question because, among other reasons, it is designed to determine whether or not an applicant’s gender identity matches his biological sex.

Questions about the applicant’s race: Such questions are forbidden in all but the rarest circumstances in which an applicant’s race is a bona fide occupational qualification (a movie director is hiring an actor to play the role of a particular historical figure, for example).

The foregoing list is not exhaustive. Any question that appears designed to evade anti-discrimination laws could draw scrutiny, such as asking when an applicant graduated from college as a means of determining their age.

Contact Us for a Consultation

California does not recognize “lack of knowledge” as a justification for violating the law – notwithstanding the fact that much of California’s business law is counterintuitive. If you have any questions, or if you are involved in a dispute, call CKB Vienna now or contact us online to schedule a consultation. We serve clients in Rancho Cucamonga, San Bernardino County, Los Angeles County, Orange County, and Riverside County.

Common Errors in Drafting California Business Contracts

Common Errors in Drafting California Business Contracts

Contracts are critical business documents, because without them, strangers could not afford to trust each other enough to do business with each other. It is not the least bit of an exaggeration to say that, without enforceable contracts, the economy would collapse. On a smaller scale, a poorly drafted contract could cause your business to collapse. The following are some of the most common contract drafting errors:

  • Creating a contract through an exchange of emails. Although such a contract is potentially enforceable, imagine the results if the terms of the memos conflict, a dispute erupts, and a judge ends up determining the terms of your contract. You need a unifield, logically-consistent document that has been signed and sealed by both sides.

  • Failing to specify what constitutes a “material breach.”  A material breach is different from an ordinary breach. In an ordinary breach, for example, a debtor might make a payment two days late. The victim of the breach has no right to terminate the contract on this basis but may demand compensation for the breach.

If the breach is “material” (serious), the aggrieved party is entitled to terminate the contract and sue for damages. It is critical that you identify what conduct constitutes a material breach. Does 60 days in arrears constitute a material breach?  Also, beware of legal terms of art: “time is of the essence” in a real estate contract, for example, could mean that delaying closing by only one day could give the other party the right to cancel the entire transaction.

  • Failing to provide an exit clause.  Circumstances change, and there may come a time when one of the parties may need out of the contract. Most business deals would benefit from an escape clause – maybe even your side. Consider a clause that allows either party to unilaterally terminate the contract with proper written notice: 30 days, for example, or 90 days.

  • A “no assignment” clause. You wouldn’t want a party performing personal services for you to subcontract the performance of those services to another party without your permission. Likewise, you wouldn’t want a party paying you to perform services to assign the obligation to pay you to someone whose credit rating is untrustworthy.

  • A carefully written confidentiality clause. Most business deals involve the exchange of trade secrets that cannot be protected by patent or copyright law. Although trade secret law can protect you to some extent, a carefully drafted confidentiality clause can fill in loopholes in the law that the other party might otherwise be able to exploit.

There’s a Lot More to Drafting a Business Contract Than Meets the Eye

The foregoing represents only a few of many considerations that you might want to codify in your business contract – in fact, a full list could fill up an entire volume. A skilled lawyer can help guide you through this complex maze. At CKB Vienna LLP, we can help you identify the issues and address your particular circumstances and concerns,.

Call us at 909-980-1040 or fill out our online contact form to learn how we can assist you. We serve clients from all over the Rancho Cucamonga area.

When Is an Auto Dealership Liable for a Defect under California Products Liability Law?

When Is an Auto Dealership Liable for a Defect under California Products Liability Law?

An automobile dealership doesn’t design or manufacture automobiles, so why should it be held liable for automobile defects that it had no hand in creating? Like it or not, California products liability law allows injured parties to sue not only the manufacturer, but also the automobile dealership for injuries sustained as a result of an automobile defect – without even proving fault on the part of either the dealership or the manufacturer.

Types of Defects That Can Trigger Liability

Products liability law covers three types of defects:

  • Design defects: Design defects typically cover all automobiles of the same make and model as the one that injured the defendant, and losing a design defect case can result in the need for an expensive recall.

  • Manufacturing defects: A manufacturing defect, such as a malfunctioning brake drum, might affect only one vehicle (but it could also affect many vehicles).

  • Failure to warn: Liability for “failure to warn” occurs when the defendant failed to warn of a hazard that might not have been considered unreasonably dangerous if it had been warned of.

Prerequisites to Seller Liability

A plaintiff must prove each of the following elements on a “more likely than not” basis:  

  • The product was in defective condition and unreasonably dangerous.

  • The defendant was in the business of selling automobiles or automobile parts.

  • The defect existed at the time the automobile was sold.

  • The vehicle was used only in an intended or foreseeable manner (not as a racecar, for example, unless the car was designed for such use).

  • The vehicle reached the user without substantial damage. The user need not be the defendant since even an injured passenger can file a products liability lawsuit.

What Is “Unreasonably Dangerous”?

There is no universally applicable definition of “unreasonably dangerous” – it’s a judgment call. Some defects (such as defective upholstery) are not considered unreasonably dangerous. Other defects (such as a cruise control cutoff mechanism that is activated by a button on the steering wheel rather than by tapping the brakes) might considered unreasonably dangerous, but only if they were not warned of. Other defects are considered unreasonably dangerous no matter what.

Defective Automobiles Are “Hot Potatoes” in California

In the case Ibarra v. Todey Motor Co. (2013), a California appeals court held an automobile dealer strictly liable (liable without fault) in a products liability design defect lawsuit. The dealer’s liability arose from a “pass-through” transaction between General Motors and the buyer, from which the dealer did not even profit.  Any vehicle that passes through your hands could subject you to liability.

At CKB Vienna, we don’t let anybody push our clients around, including the California court system. We know how to handle frivolous lawsuits and opportunistic plaintiffs. If you are subject to a products liability claim or anticipate such a claim, call us at 909-980-1040 or contact us online so that we can set up a consultation to explore your options. We serve clients from all over Rancho Cucamonga, including Alta Loma and Etiwanda.

Paternity Testing Law in California

Paternity Testing Law in California

In modern times, there is no reason to wonder long about the paternity of a child. Since the advent of DNA testing, paternity can usually be established with a high degree of certainty in the event of a dispute. Establishing paternity is critically important, because it determines not only whether any form of custody will be granted to the putative father, but it also determines child support obligations. It is important, however, to know what California law says about paternity testing.

Marriage and the Presumption of Paternity

If a child is born in wedlock, California law presumes that the mother’s husband is the biological father. If the couple divorces while the child is still a minor, the husband could be assessed with child support obligations even if he is not the child’s biological father. This might sound outrageously unfair when applied to a situation where the child is the product of an adulterous affair.

All is not lost if the mother’s husband is not the father, however. This is because the word “presumes” leaves a legal loophole whereby paternity can be attributed to the actual biological father if, and only if, the mother’s husband can prove that he is not the biological father of the child. Normally, a court-ordered paternity test is required. Until then, child support obligations will continue to be assessed against the mother’s husband.

Unmarried Parents

When an unwed mother gives birth, there is no presumption one way or the other concerning the identity of the child’s biological father. A simple way to establish paternity, however, is to execute a Voluntary Declaration of Paternity. Both the mother and the putative father must sign this document for it to be valid.

If a dispute arises concerning the identity of the father, even a paternity test by itself will not establish the identity of the father for legal purposes – a court order is required. A court can order a paternity test to be carried out by a laboratory that is recognized as reputable by the court, and the result can be sealed so that any tampering can be easily detected.

The Role of the Local Child Support Agency (LCSA)

Your local LCSA can open a paternity case on behalf of the child, and either the mother or the putative father can initiate such an action. If you request Cal-Works or Medi-Cal on behalf of your child, the LCSA will automatically commence an action on its own initiative. LCSA lawyers do not represent either the mother or the putative father, and you will be able to retain your own lawyer even after the LCSA initiates a paternity action.

The Stakes Are Too High for You to Hesitate

Mistaken paternity determinations can have far-reaching effects, not only on the putative father but on the biological father and the child as well. This is something you have got to get right. At CKB Vienna LLP, we know how to work with the system to maximize your chances of a fair determination.

Pick up the phone today and call us at 909-980-1040, orfill out our online contact form to schedule a consultation with us. We serve clients from Rancho Cucamonga as well as elsewhere in California.

Common Mistakes in California Prenuptial Agreements

Common Mistakes in California Prenuptial Agreements

A prenuptial agreement (lawyers like to call them “antenuptial agreements”) is an agreement between a couple who plans to marry. It operates in the event of an eventual divorce to distribute the couple’s assets in a manner that is inconsistent with the distribution that would occur under California’ community property law. They generally work to the advantage of the richer of the two spouses.

Since the validity of prenuptial agreements is specifically regulated by California statutory law in a manner that most contractual relationships are not, they must be drafted with great care to avoid a nasty surprise years or even decades down the road. The following are some of the most common errors committed by aspiring spouses when creating prenuptial agreements.

Failing to Put the Agreement into Writing

A kiss does not establish the validity of a prenuptial agreement – at least not in the eyes of the law. Although some types of verbal contracts can be enforced (if their terms can be proven, which can be difficult when the terms are not reduced to writing), in California, a prenuptial agreement must be in writing and signed by both parties in order to be enforceable.

Failing to Arrange for Independent Representation for Each Spouse

Each spouse should be represented by their own lawyer; otherwise, you are asking for trouble down the road. Although independent representation is not an absolute requirement that applies under every circumstance, in many cases, it can provide the party seeking to undermine the agreement with a loophole that can be easily exploited.

Coercion

Your spouse’s signature on the agreement must not be coerced in any way. Obviously, securing a signature at gunpoint is coercion, but what about waiting until the last minute to seek your spouse’s signature? After all, if he or she doesn’t sign, you’ll have to cancel the wedding at the last minute. That, too, can be considered a form of coercion. Without more, however, making the signing of a prenuptial agreement a condition of agreeing to marry does not constitute coercion.

Failing to Disclose Your Assets and Liabilities

Failing to disclose the full extent of your assets and liabilities is one of the best ways to ensure that your prenuptial agreement will be invalidated. Insist on full disclosure in writing and attach it to the agreement.

Careless Wording

The best way to draft a prenuptial agreement is to imagine that there is a little gremlin sitting on your shoulder who is constantly trying to twist your words around to make them mean something that you didn’t intend. Draft the agreement in a manner that silences your gremlin. The end product should be a well-drafted prenuptial agreement that will minimize your chances of conflict and maximize your chances of victory if conflict does erupt.

Contact Us Today

At CKB Vienna LLP, we can help you draft a prenuptial agreement that will maximize your chances of fulfilling your original intentions in the unfortunate event that such a document is needed to protect your interests. If it is already too late for that, we can help you protect your interests at the negotiating table or, if necessary, in court.

Call us at 909-980-1040 or fill out our online form to schedule a consultation with us. We serve clients from Rancho Cucamonga as well as elsewhere in California.

Shareholders’ Personal Liability for Unpaid Wages in California

Shareholders’ Personal Liability for Unpaid Wages in California

It’s a nightmare scenario that becomes all too real for many shareholders in closely-held corporations. Your company goes bankrupt owing hundreds of thousands of dollars in unpaid wages, the employees demand back pay, and a court holds you personally liable for the entire amount. Here is some of what you need to know to prevent that nightmare from coming true.

Limited Liability Entities

California law provides for a wide variety of possible business entities to choose from. The most common limited liability entities are the corporation and the Limited Liability Company (LLC). Under the theory of limited liability, your liability is limited to the amount you chose to invest into the company in the first place and your personal assets outside of this investment are not at risk, even if the company goes bankrupt owing large sums of money. There are exceptions, however.

The Alter Ego Doctrine

Under the “alter ego” doctrine, a company shareholder is supposed to treat the company as a separate entity – almost as if it were a separate person. If, instead, the shareholder treats the company as his own private piggy bank, a court might consider the company to be his “alter ego” and hold the shareholder personally liable for company debts. This risk is particularly acute in California employment disputes, because California law is notoriously employee-friendly.

Factors

There is no bright-line rule that will tell you under exactly what circumstances a court will hold you personally liable for unpaid wages in the event of company dissolution. Although courts look at such claims on a case by case basis, they will balance the following factors (among many others) to reach a conclusion:

  • Whether personal and company funds were co-mingled;

  • Whether company funds were used to pay personal expenses;

  • Whether the shareholder exercised dominion over company assets;

  • In a corporation, whether the shareholder failed to observe corporate formalities such as obtaining a board resolution before issuing new shares;

  • Insufficient capitalization to meet reasonably anticipated company liabilities; and

  • Failure to file company tax returns.

All of these factors need not be present for personal liability to be assessed.

Joint and Several Liability

When a California court finds that a limited liability entity is the alter ego of the shareholders and that personal liability should be imposed, it may find each of the shareholders jointly and severally liable for corporate debts. Facing joint and several liability is not an enviable position to be in.

Suppose, for example, that 10 shareholders each own 10 percent of company shares. A court could allow aggrieved employees to sue any one of these 10 shareholders for 100 percent of their claim. It would then be up to that shareholder to seek proportionate contribution from the other shareholders. However, this might not be possible if, for example, the other nine shareholders are insolvent or bankrupt.

Take Decisive Action Today

The potential personal liability of a shareholder in a closely held company is much greater than most people realize, especially in employee-friendly California. At CKB Vienna LLP, our first concern is to help you prevent a claim being lodged against you in the first place. Should a claim arise, however, we are more than ready to fight for you and win – whether at the negotiating table or in court.

Telephone us at 909-980-1040, or contact us online to schedule a consultation with us. We serve clients from Rancho Cucamonga as well as elsewhere in California.

GPS Tracking of Employee Locations: The Legal Implications in California

GPS Tracking of Employee Locations: The Legal Implications in California

New technology means it is easier than ever to use GPS tracking to keep track of the locations of your employees. This could be critical to productivity in positions where employees often work off-site and must be trusted to make productive use of their time. GPS tracking, however, raises privacy concerns under the California constitution, and it requires employers to observe certain limitations.

Legal Precedent: Moreno v. S.F. Bay Area Rapid Transit District

The Moreno v. S.F. Bay Area Rapid Transit District case is an important legal precedent that provides two of the primary legal principles applicable to determining the legality of GPS tracking:

  • A link to a privacy policy that appears when an app with a GPS tracking function is being installed is not enough to impute consent to tracking to an employee who uses the app.

  • Tracking a user through an ID number does not raise the same privacy concerns that tracking a user through his personal information does.  

Chip Implants

Chip implants, permanent implants that are inserted under the skin, raise acute privacy concerns because they are invasive and can be used to track employees 24/7. They might also raise religious freedom concerns since some conservative Christians are already identifying chip implants as the “mark of the beast” described in the Bible. Penalizing an employee who refuses to use an implant for religious reasons might raise First Amendment concerns.

Company-Owned Devices

You enjoy much greater freedom to track the location of company-owned devices such as a cell phone. If all you are tracking is the location of the device itself, then it is generally permissible to track it even when the employee is off-duty. After all, tracking tells you only the location of the device, not necessarily the employee. Two caveats: (i) the same might not apply to tracking the location of a chip implant, and (ii) employees should still consent to tracking.   

How Employers Can Protect Themselves against Liability

Observing the following guidelines should greatly reduce your legal risk:

  • Employees should be tracked by ID number, not by name or personal data.

  • Employees should be specifically notified that their location will be tracked, and their specific consent to tracking should be obtained.

  • Track employees only during working hours – even lunch breaks are off limits.

  • Take reasonable measures to prevent interception by third-party eavesdroppers.

  • Do not use chip implants.

Act Decisively to Mitigate Your Legal Risk

Privacy is a big deal in California, and state courts tend to show bias in favor of employees in the event of a dispute. Put these two concerns together and you could end up with the proverbial “perfect storm.” At CKB Vienna LLP, however, we can help you prepare and implement policies that can help you minimize the risk that a dispute will erupt in the first place and maximize your chances of victory should you be dragged into a dispute by an employee or a third party.

Call us at 909-980-1040 or fill out our online contact form to schedule an appointment to discuss your concerns. We serve clients from Rancho Cucamonga as well as elsewhere in California.

How the Business Judgment Rule Protects Rancho Cucamonga Corporate Directors

How the Business Judgment Rule Protects Rancho Cucamonga Corporate Directors

Corporate directors are responsible for making decisions that can cost shareholders a lot of money. These costs can be imposed by bad decisions, of course, but they can also be imposed by good decisions that don’t satisfy everyone. If a director could be sued in his personal capacity by any shareholder who disagreed with his decisions, few people would dare to act as a corporate director. The business judgment rule limits the personal liability of directors.

The Duties and Liabilities of Corporate Directors

Two broad principles govern the decision making of California corporate directors:

  • The fiduciary duty of loyalty: A director must act with loyalty to the corporation, not his personal financial interests. A director is not allowed to use corporate resources for his own benefit (beyond his salary) even if the corporation is not thereby harmed.

  • The fiduciary duty of care: A director must exercise diligence, competency, and “good faith” (laudable motivations) when making corporate decisions.  

Breach of either of these duties can subject a director to personal liability.

The California Business Judgment Rule

The business judgment rule is designed to prevent shareholders and courts from second-guessing the decisions of corporate directors. It serves as a counterweight to, and to an extent a restatement of, the potential liability that directors face for breach of their fiduciary duties. Under the California business judgment rule, a director cannot be held personally liable if the following conditions are met:

  • The director acted on an informed basis;

  • The director acted in good will; and

  • The director honestly believed that the decision at issue was in the corporation’s best interests (regardless of whether it actually was or not).

If a director is sued by a shareholder, the director can assert that he complied with the business judgment rule and ask the court to dismiss the lawsuit. This is without ever reaching the question of whether the director’s decision was right or wrong under the circumstances.

Loopholes

Although the business judgment rule can be overcome, in a civil lawsuit it, is the party asserting director liability who has the burden of proving, under a “more likely than not” standard, that the business judgment rule does not apply to the dispute. Some examples of loopholes through which liability has been successfully asserted include:

  • Establishing that the director violated his fiduciary duty of loyalty or care. A major red flag occurs if the director personally benefited from a decision he made (he gave himself a raise, for example).

  • Establishing that the director’s decision wasted corporate resources, even if no violation of the duties of care and loyalty occurred.

Once a plaintiff has submitted evidence that the business judgment rule does not apply to his claim, the director can still put forth evidence that his decision was right (because it was reasonable and fair, for example). This time, however, the burden of proof will be on the director, not the shareholder.


Here at CKB Vienna, we understand the difference between the “lawyer’s solution” to a business problem and a more effective business solution that takes into account surrounding circumstances and business realities. We stand ready to help you craft a tailor-made solution to your problem. Call us at 909-980-1040 or contact us online to schedule a consultation in our Rancho Cucamonga Office. We serve clients all over town including Alta Loma and Etiwanda.

What Are the Qualifications for a Trade Secret?

What Are the Qualifications for a Trade Secret?

Trade secrets are considered a form of intellectual property; nevertheless, they lack the protection that other forms of intellectual property enjoy. So why would a business settle for trade secret protection of proprietary information rather than protection under patent, copyright, or trademark law? There are two main reasons:

  • Certain forms of proprietary information fall between the cracks in intellectual property law and are not eligible for protection under either patent, copyright, or trademark law; and

  • A company may wish to retain exclusive access to its secrets for longer than the term of protection for the intellectual property protection for which it is eligible. Imagine, for example, if Coca-Cola applied for patent protection of its formula. They would have to publicly reveal it, and anyone could use it legally after the 20-year duration of patent protection expired.

The Uniform Trade Secrets Act

California trade secret law is based on the Uniform Trade Secret Act. A uniform act is an act that is drafted at the national level and then sent to each state as suggested legislation in the hopes that all states will enact it, thereby harmonizing the law among the various states. States are not required to enact such legislation, and indeed some don’t, while other states enact it in modified form (in other words, the trade secret law of most states is similar but with state-specific idiosyncrasies).

What Counts as a Trade Secret?

A  trade secret can be any secret information legally possessed by a company that provides it with a competitive advantage, including (but not limited to):

  • Customer lists

  • Marketing information

  • Unpatented inventions

  • Computer software

  • Formulas

  • Recipes (KFC’s “17 different herbs and spices”, for example)

  • Techniques

  • Processes

  • Other information

Trade Secret Qualifications

To qualify as a trade secret:

  • The information must be commercially valuable.

  • The information must be difficult for others to legitimately acquire or independently produce.

  • The information must be unknown outside the company (including its employees and others involved in the business).

  • The company must have taken reasonable measures to keep the information secret. Typically, this is accomplished through the use of nondisclosure agreements with company employees.

What Is Trade Secret Misappropriation?

Under California law, there are two forms of trade secret misappropriation:

  • Using dishonest means to acquire trade secrets; and

  • Inappropriate disclosure or use of trade secrets (by a former employee who establishes a competitive company, for example).

A party who independently invents the same information that another company already claims as a trade secret does not thereby misappropriate it.  

Liability

A company commits misappropriation of a trade secret of another party, even if it did not know that it was someone else’s trade secret, as long as it “had reason to know” of the information’s status as someone else’s trade secret. Misappropriation liability can include court-ordered injunctions, damages, and criminal liability.


At CKB Vienna, our lawyers are knowledgeable, committed, and absolutely relentless in their pursuit of their clients’ best interests. If you possess trade secrets that need protection, or if you are concerned about liability for trade secret misappropriation, call us at 909-980-1040 or contact us online. We serve clients in Rancho Cucamonga, including Alta Loma and Etiwanda, as well as other nearby areas.

Paternity Fraud in Rancho Cucamonga

Paternity Fraud in Rancho Cucamonga

A biological father can properly be held financially responsible for the care of his minor children. By contrast, imagine that you are being assessed hefty child support payments to support a child who belongs to someone else. Further imagine that the child’s mother intentionally identified you as the father while knowing that you were not. This is the nightmare of paternity fraud.

Marriage and the Presumption of Fatherhood

California law presumes that a child born in wedlock is the biological child of both parents. Don’t get tripped up by the word “presume,” however. All it means is that, if your wife gives birth to a child while you are married to her, the law will treat you as the biological father until you prove otherwise.

Mistaken Admissions of Paternity

California issues a form, called a Voluntary Declaration of Paternity, that allows you to formally acknowledge that you are the father of the child. It is particularly useful where the child was born out of wedlock. Never sign this form unless you are certain that you are the child’s biological father, because it can become a significant legal obstacle if you find out later that you aren’t.

Court Orders of Paternity

The child’s biological mother may seeks a court order of paternity against you, which paves the way for child support payments to be assessed. Although you have the right to appear at the hearing and defend yourself, if you fail to appear, then a default judgment will be ordered against you.

DNA Testing

A DNA test must be court-ordered to serve as valid evidence, and the court can only order a DNA test within two years of the birth of the child. Past the child’s second birthday, the statute of limitations deadline expires and the court lacks the power to order a DNA test. This limitation has the potential to work great injustice, but it gives you all the more reason to seek legal counsel if you believe you have become a victim of paternity fraud.

The Paternity Disestablishment Bill of 2004

In 2004, the California legislature enacted the Paternity Disestablishment Bill, which makes it easier for the victim of paternity fraud to fight back. Among other features, the law provides the following:

  • A putative father can file a motion to withdraw a mistaken Voluntary Declaration of Paternity at any time before the child’s second birthday.

  • A putative father can file a motion to set aside a default judgment that led to a court order declaring him the child’s father. This must be within two years of the date that he knew or should have known of the judgment. He can then re-litigate the court order declaring him the father.

  • A putative father can file a motion to set aside a judgment of paternity that he participated in (in other words, that did not default on) if he was declared the father in the absence of DNA testing. He can then re-litigate the court order declaring him the father.  


If you believe that you may have been a victim of paternity fraud, contact CKB Vienna immediately by calling 909-980-1040 or contacting us online to set up an appointment at our office in Rancho Cucamonga.We serve clients from all over town, including Alta Loma and Etiwanda.

How Marital Infidelity Affects a California Divorce

How Marital Infidelity Affects a California Divorce

The infidelity of a spouse is, for many people, one of the most painful experiences in life, and it is the reason why a great many divorces are initiated. Emotionally, it is difficult to imagine that the infidelity of one partner would not be considered relevant to a divorce proceeding that was initiated for that very reason. The reality, however, is more complex.

The “No-Fault” Divorce Revolution

Put simply, adultery is not a formal grounds for divorce in California. That reality is not as harsh as it sounds, however; because, since 1970, California has offered “no-fault” divorce. The only two real “grounds” for a California divorce are “irreconcilable differences” and “incurable insanity.”

Nearly anyone can get a divorce in California by alleging irreconcilable differences, even over the objections of their spouse. Although adultery doesn’t apply directly to a California divorce, related issues such as property division and child support can be affected under certain circumstances.

Depletion of Marital Assets

Suppose that a husband (for example) maintained a long-term adulterous affair with a mistress for whom he bought expensive gifts and rented an apartment for trysts. During property division, a court is empowered to consider these “mistress expenses” a unilateral depletion of assets that belonged to both spouses and to proportionately adjust the division of property in the wife’s favor.  The same principle would apply against a faithful spouse who simply gambled the money away.

Harm to the Children

The most important principle in child support and child custody matters is the “best interests” of the child. In theory, these interests take precedence over the interests of either parent. Although a sexually unfaithful parent is not necessarily considered thereby “unfit” to raise children, sexual promiscuity might be seen as a part of an overall lifestyle that might harm the children unless custody were vested in the other parent.  

Cohabitation before the Divorce Is Finalized

It is not at all uncommon for a spouse, who is separated pending divorce (whether or not “legally separated”), to take up residence with a new boyfriend or girlfriend before a divorce is finalized. Indeed, some people would not even consider this to be an example of genuine adultery at all.  

It could affect spousal support, however, if the receiving spouse is the one living with a new partner and the arrangement affects the new spouse’s need for spousal support. For example:

  • The new partner might be voluntarily providing support to the receiving spouse; or

  • The couple might be saving money by combining expenses – an apartment for two might cost less than twice the amount of an apartment for one, for example, thereby reducing the expenses of the receiving spouse.

In all cases, the moral issue of adultery itself is utterly ignored by California courts. It is only when incidental issues arise that a divorce is affected.  

Here at CKB Vienna, we understand that a divorce is far more than just a change in legal and financial status. It is a deeply emotional issue that can explode into a firestorm if not appropriately managed. We are committed to helping you navigate the process while, at the same time, demanding fairness.


Our office is located in Rancho Cucamonga and we serve clients from all over town, including Alta Loma and Etiwanda. Call us at 909-980-1040 or contact us online so that we can begin exploring your options today.

Employment Arbitration Agreements in Rancho Cucamonga

Employment Arbitration Agreements in Rancho Cucamonga

The term “arbitration” is often (and more clearly) referred to as “rent-a-judge.” It is a process by which a private party resolves a dispute between two or more parties. It differs from mediation in that a mediator cannot impose a resolution on the parties (he can only seek their consensus), while an arbitrator is empowered to impose a resolution on one or both parties.

Employment arbitration typically refers to arbitration of a dispute between an employee and an employer. Such arbitration is typically agreed to by both parties before a dispute arises (in an employment contract, for example). An arbitration clause in an employment agreement, or a stand-alone arbitration agreement, typically prevents either party from bringing the dispute to court or appealing the initial arbitration decision.

“Adhesion” Employment Arbitration Agreements

Employers typically like arbitration for reasons that are obvious when you think about it. Even a small company with only 100 employees faces 100 possible lawsuits from its employees. Courtroom litigation costs a lot more than arbitration does, and just a few lawsuits could bankrupt a company from legal fees even if it won every lawsuit.

An adhesion employment arbitration agreement is an arbitration agreement that a prospective employee must sign in order to be hired, or that a current employee must sign in order to keep his job. California courts sometimes strike down adhesion arbitration agreements on the reasoning that the employee had no real choice but to sign it.

The following should be included in any employment arbitration agreement in order to minimize the chances that your arbitration agreement will be struck down by a court:

  • The employer, not the employee, should bear the cost of arbitration.

  • Claims for workers' compensation benefits, unemployment insurance benefits, and the collection of allegedly due and unpaid wages should be excluded from the scope of arbitration.

  • Both parties (not only the employee) should be barred from submitting a dispute to a court for resolution.

  • A mechanism should be provided for the appointment of a truly neutral arbitrator.

  • Reasonable access to documents and witnesses should be guaranteed for both parties.

  • The arbitrator should be required to issue a written decision that includes essential findings and conclusions.

  • The arbitrator should be allowed to award just as much in damages as a court could award, including punitive damages.

Martinez v. Scott Specialty Gases Provides Employers with Leverage

The 2000 California case, Martinez v. Scott, allows courts to dismiss all employment claims by an employee who files a lawsuit in defiance of a valid arbitration agreement that prohibits such lawsuits. The reasoning is that, since the employee waived his only valid means of resolving his dispute (arbitration) by filing a lawsuit, there remains no valid forum with the jurisdiction to hear his complaints.

At CKB Vienna, we understand the difference between the business solution to a dispute and a “lawyer’s solution” that looks good on paper but fails to take into account business realities. Telephone us at 909-980-1040 or contact us online to schedule a consultation. Our office is located in Rancho Cucamonga and we serve clients from Alta Loma, Etiwanda, and elsewhere in town.

California Equal Pay Laws

California Equal Pay Laws

“Equal pay for equal work” is more than just a slogan in California, because the California legislature has enacted a comprehensive set of equal pay laws. These laws have teeth; violate one of them and your company could end up in big trouble – perhaps even bankrupt. A general familiarity with the legislation in this area can help your company avoid this fate.

The California Equal Pay Act of 1949

The California Equal Pay Act of 1949 states:

"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."

Any lawyer reading the wording of this provision will immediately notice how narrow the coverage is and how vague the wording is. Vague wording means potential loopholes. As time passed, the loopholes multiplied and the grumbling grew louder. In 2015 the California legislature responded by supplementing this legislation with new, stricter legislation.

The California Fair Pay Act

The California Fair Pay Act modified the California Equal Pay Act of 1949 to render it probably the most employee-friendly equal pay legislation in the United States. Three features of this law deserve special mention:

  • The salary history provision: With limited exceptions, a company cannot ask a job applicant how much they were making at a previous position and they cannot base an employee’s salary on his or her previous salary. The law also requires the company to provide an applicant with a written pay scale upon request.

  • The “substantially similar” work provision: An company cannot pay employees of different genders, races, or ethnic backgrounds differently for “substantially similar” work. “Substantially similar” work means similar effort, skill, responsibility, and working conditions.

  • The “bona fide factor other than sex, race, or ethnicity”: An employer can justify paying two employees differently on the basis of a “bona fide factor other than sex, race, or gender.” The factor must be applied in a reasonable manner, it must account for 100 percent of the difference in pay, and the employer bears the burden of proving this justification.

Complaint Mechanism

An employee who believes he or she has a claim for unequal pay has three practical avenues for pursuing a remedy:

  • File a complaint with the California Labor Commissioner (CLC);

  • File a civil lawsuit; or

  • Seek a private settlement with the employer.


A common means of resolving an equal pay complaint is to start off by filing a lawsuit, and then use the lawsuit as leverage to open private settlement negotiations with the employer. In most cases, the employee has two years after the violation to file a lawsuit.

Contact Us for Immediate Assistance

The foregoing information barely scratches the surface of what you need to know to avoid falling afoul of California equal pay legislation. At CKB Vienna LLP, we can guide you through its byzantine corridors so that your compliance cannot easily be questioned. We can also represent you with aggressive advocacy if a claim is made against you or if a lawsuit is filed against you.


Contact us by calling 909-980-1040, orsimply complete our online contact form to schedule an appointment with us. We serve clients from Rancho Cucamonga as well as elsewhere in California.

Collecting Real Estate Deficiency Judgments in Rancho Cucamonga, California

Collecting Real Estate Deficiency Judgments in Rancho Cucamonga, California

Suppose a debtor defaults on a mortgage while owing $110,000 on the loan. The sale of the property nets only $90,000, excluding costs and fees, leaving you with a deficiency of $20,000. A deficiency judgment is your way of collecting this $20,000. You must sue the debtor. And if you win, the money can be taken from the debtor’s personal assets – through wage garnishment or seizure of bank account assets, for example.

Unfortunately for lenders, California law strongly favors borrowers in this situation. Unlike many other states, it strictly limits the ability of a lender to collect a deficiency judgment. The following are some examples of the limits on a mortgage lender’s freedom of action in this situation.

Judicial vs. Non-judicial Foreclosures

Two options exist for foreclosure under California law: non-judicial foreclosures and judicial foreclosures:

  • Most residential foreclosures are non-judicial in nature (the same cannot be said of foreclosures on commercial properties). Non-judicial foreclosures are carried out by the lender, not the court, and are subject to California’s anti-deficiency statute. This means that, as a lender, you are stuck with any deficiency – you have no recourse to the borrower’s personal assets.

  • Some residential foreclosures and most commercial property foreclosures are carried out by the court. Although deficiency judgments are allowed in principle, several exceptions exist, including:

  1. Deficiency judgments are not allowed for purchase money loans.

  2. Deficiency judgments are not allowed for seller-financed (“seller carry-back”) loans

  3. Deficiency judgments are not allowed for refinanced purchase money loans executed on or after January 1, 2013, except under certain circumstances.

If a deficiency judgment is allowed, the amount of the deficiency will be the lesser of:

  • The amount owed on the mortgage minus the fair value of the property as determined by the court; or

  • The amount owed on the mortgage minus the proceeds of the judicial sale.

For this reason, the lender is not guaranteed to receive the full amount of the outstanding balance – the fair value of the property may exceed the proceeds of the judicial sale (which is a very common occurrence).

The One Action Rule

Under California’s “one action rule,” a lender can only pursue one action to recover a mortgage or a debt. He can:

  • Conduct a judicial foreclosure;

  • Conduct a non-judicial foreclosure; or

  • Sue directly on the promissory note.

The lender, however, is subject to a significant disadvantage: he cannot sue on the promissory note as an alternative to foreclosure. If the debt is secured, he must pursue the security first.

At CKB Vienna LLP, we advise you on the best way to collect on any deficiency that may be owed to you and we can help you collect this deficiency. We can also help you structure transactions in a manner that will help you avoid this situation in the first place.

Call us at 909-980-1040 or fill out our online contact form to schedule a consultation with us. We serve clients from Rancho Cucamonga as well as elsewhere in California.

Trade Secrets under California Law

Trade Secrets under California Law

A trade secret is confidential information that is used in business that confers a competitive advantage over other companies or individuals that do not know of or use it. It can be technology, compilations such as lists of customers, business methods, devices, techniques or processes, among other items.

Although many trade secrets cannot be protected under patent law, some trade secrets can be protected in this manner. But the business that holds them does not wish to be subject to the time limitations on their validity. The formula for Kentucky Fried Chicken is a good example: Yum! Brands, the company that owns KFC, doesn’t want its formula patented because patent protection only lasts for 20 years.

Legitimate and Illegitimate Access

One of the disadvantages of holding a trade secret is that, if someone manages to obtain the information through legitimate means, they can use it as they please and there is very little you can do about it. On the other hand, if your employee or a competitor hacks into your computer database, discovers a trade secret, and uses it to start his own company, you definitely do have legal recourse – including criminal sanctions, in some cases.

The Defend Trade Secrets Act of 2016

The World Trade Organization (of which the United States is a member) obligates its signatories to take legal steps to protect trade secrets held by both domestic and foreign entities and individuals. The Defend Trade Secrets Act of 2016 (DTSA) is the U.S. federal government’s response to bring it into compliance with WTO standards (state law remedies for trade secret violations have been available for quite some time, however).

The DTSA allows you to sue in federal court for trade secret violations, thereby eliminating (theoretically) the possibility of local bias when an out-of-state plaintiff sues in another state’s court. Although minor discrepancies exist among state trade secret laws, they are mostly harmonized because almost every state has adopted the Uniform Trade Secrets Act.

The Pros and Cons of Trade Secret Protection

The primary advantages of trade secret protection are:

  • Trade secret protection can potentially endure forever. Think about how long the formula for Coca-Cola has been protected, for example.

  • There is no need to publicize the details of a trade secret. Patent protection, by contrast, requires complete disclosure before a patent is even granted.

The primary disadvantages of trade secret protection are:

  • Trade secret law does not protect against independent discovery. If someone else comes up with the same idea on their own, you have no recourse against them.

  • Trade secret law does not protect against reverse engineering. Of course, reverse engineering can be difficult or impossible, depending on the nature of the secret.

  • To qualify for trade secret protection, you must make an effort to keep the information secret. There is no need for such an effort for patent protection since the information has already been disclosed to the public.

An Ounce of Prevention Is Worth a Pound of Cure

At CKB Vienna LLP, we can help you create a trade secret protection policy that can protect your business interests for years or even decades to come. And if you are already involved in a  trade secret dispute, we are adept at applying the pleasure/pain principle to stop the leakage of your confidential information in a forthright manner – and win you financial compensation in the process.

Call us at 909-980-1040 or fill out our online contact form to learn how we can best assist you. We serve clients from all over the Rancho Cucamonga area, including Alta Loma, Etiwanda, Upland, Fontana, Ontario, Chino Hills, and Claremont.

Adopting a Child in California

Adopting a Child in California

Adoption is a serious matter. Considering the fact that adoption involves transferring parental rights from birth parents to adoptive parents and the fact that the birth parents may never see their child again, how could it not be a serious matter? Obviously, adoption laws exist for very good reasons. If you are considering adopting a child in California, it is important that you understand how the process works.

Obtaining Consent for an Adoption

In nearly every case, consent is required for the adoption process to get started. This consent must be given by:

  • Both of the child’s parents if they are married

  • Both of the child’s parents, even if they are not married, as long as the father’s name appears on the birth certificate

  • The child’s custodial parent only if the other parent has failed to communicate with or support the child for to least one year

  • The child’s custodial parent only if the other parent fails to respond to a court-issued notice of adoption proceedings that has been delivered to him or her

  • The adoptive parent’s spouse

  • The child being adopted as long as he/she is at least 12 years old

The foregoing is an abbreviated summary of consent requirements under California law. As with just about every legal issue, the details are far more complicated.

The Home Study

The home study is the process by which California adoption officials evaluate whether the child’s living environment would suit his best interests under your care. It involves:

  • Submitting your fingerprints;

  • Submitting to a medical examination;

  • Attending adoption classes;

  • Being interviewed by a social worker on several occasions; and

  • Submitting to a visit from a social worker in your home as well as an investigation of the child’s living conditions.

Your adoption application might be refused if you have ever been convicted of a crime involving child endangerment or child pornogrpahy. Other criminal offenses, such as violent crimes or alcohol- and drug-related crimes, might disqualify you if they occurred within five years previously. The same rules apply to any adult living in your home.

Finalizing the Adoption

If you successfully complete the home study, your adoption can be finalized in as little as six more months. You will need to undergo several more interviews with a social worker, including at least one interview with your child present.  

International Adoptions

International adoptions are growing increasingly popular, especially from China. If your adoption was finalized under, say, Chinese law, it would still be to your child’s advantage for you to re-adopt your child under California law. This would allow him or her to have an English language U.S. birth certificate. As long as your adoption was finalized overseas, however, re-adoption is not a legal requirement.

At CKB Vienna LLP, we can help you navigate the maze of California adoption law, whether you seek a domestic adoption or you seek to finalize an adoption commenced overseas. If you seek assistance with an adoption, feel free to telephone us at 909-980-1040 or simply fill out our online form so that we can schedule a consultation.

We serve prospective adoptive parents from all over Rancho Cucamonga, including Alta Loma, Etiwanda, and Claremont, among other neighborhoods.

Child Custody Law in California: The Basics

Child Custody Law in California: The Basics

Although child custody law in California is more complex than you might imagine, it is guided by a few foundational principles. Foremost among these is “the best interests of the child” that supersedes either parent’s right to authority over or contact with the child, should these values ever conflict with each other.

“The Best Interests of the Child”

The best interests of the child does not necessarily coincide with the child’s own preferences, although these can be taken into account if the child is considered old enough and mature enough to render his preferences worthy of consideration. On the other hand, “I wanna live with Daddy because he serves me ice cream for breakfast” could have the opposite of the intended effect.

The best interests of the child breaks down into two sub-principles:

  • The health, safety, and welfare of the child takes precedence over either parent’s preferences; and

  • California law presumes that the child’s best interests are best served when the child benefits from frequent and continued contact with both parents (contrary to the popular notion that the mother is always favored).

Physical Custody vs. Legal Custody

“Custody” comes in two forms, and enjoying one form of custody does not necessarily mean enjoying the other.

  • Physical custody” means the child’s living arrangements. All other things being equal, parents share physical custody – one parent may keep the child during the week, for example, while weekends may be reserved for the other parent.

  • “Legal custody” means the authority to make life decisions for the child – where he will go to school, for example, or what his religious upbringing will be.

Factors That Can Tip the Scales

The following are a few of the circumstances that can tip the scales of justice in favor of one parent at the expense of the other:

  • The child was conceived when the father raped the mother.

  • One parent has been convicted of child abuse or domestic abuse.

  • One parent has been credibly accused of child abuse (by child protection authorities, for example), even if no conviction resulted.

  • One parent has falsely accused the other parent of child abuse or other dangerous behavior (narcotics abuse, for example) to gain advantage in a custody proceeding.

  • One parent commits other reprehensible behavior that might adversely affect the child’s well-being (encouraging the child to smoke or take drugs, for example).

If any of these factors are present, a judge may deny custody to one parent altogether or limit the offending parent’s rights to supervised visitation only. In extreme cases, procedures may be undertaken to deprive the offending parent of all parental rights, including even the right to know of the child’s whereabouts.

Consensual Custody Arrangements and Mediated Solutions

Absent unusual or dangerous circumstances, courts encourage parents to come to voluntary agreements on legal and physical custody. If such an agreement cannot be reached, mediation is required. Only when mediation fails can litigation be resorted to.

Decisive Action Can Make a Difference

At CKB Vienna LLP, we can help you reach an amicable resolution to child custody issues. If necessary, however, we can initiate litigation to resolve intractable disputes. Telephone us at 909-980-1040 or fill out our contact form to learn how we can best assist you in your child custody dispute. We serve clients from all over Rancho Cucamonga, including Alta Loma, Fontana, Chino Hills, Claremont, and elsewhere in the area.

How Does the Legalization of Recreational Marijuana Use Affect Employee Rights in California?

How Does the Legalization of Recreational Marijuana Use Affect Employee Rights in California?

Is recreational use of marijuana now legal in California? Well, yes and no. Yes, because it is now legal under state law (subject to certain restrictions, of course). No, because federal law still prohibits the use of marijuana, even for medical purposes. Since federal law trumps state law (no pun intended), the answer seems clear: marijuana use is still illegal in California – sort of.

The catch is that, for now, the federal government is refraining from enforcing its anti-marijuana laws in states that have legalized its use. So how does the federal government’s voluntary forbearance affect the relationship between employers and employees who indulge in this practice?

Not Much Has Changed – for Now

Although the law is changing rapidly in this area, at present, the following state of affairs prevails:

  • Both public and private employers have the right to insist upon a drug-free workplace. Marijuana is still classified as a “drug”, even though California has legalized it. Some employers (employers of delivery drivers, for example) are required to insist that their employees remain drug-free on the job, for obvious reasons.

  • An employer may forbid the use, consumption, possession, or display of marijuana in the workplace, even if such prohibition has no direct bearing on the mission and function of the organization. A stockbroker can still be fired for bringing a bag of marijuana to work, for example.

  • An employer can terminate an employee for off-duty use of marijuana. Since it remains illegal under federal law, an employer is not forbidding an employee from engaging in a “lawful off-duty activity,” which could, in certain circumstances, raise serious legal questions.

  • An employer may administer drug tests to prospective employees and refuse to hire those who test positive for marijuana use.

  • Employers may carve out exceptions to normal marijuana prohibitions for the benefit of employees who use marijuana for medical reasons (someone suffering from glaucoma, for example, might be hired even after a positive marijuana test), but they are not required to do so since even medical marijuana use is barred under federal law.

  • In most cases, an employer can ignore a positive marijuana test and go ahead and hire a prospective employee anyway unless there is a law expressly prohibiting it (for certain federal jobs requiring high-level security clearance, for example).

Marijuana law, as it relates to employee rights, is in a state of flux right now, and some legal scholars anticipate rapid changes in the future. Employers would do well to keep abreast of these changes, especially if (i) the federal prohibition against marijuana use is lifted, or (ii) the U.S. Attorney General begins strictly enforcing federal marijuana law even in states that permits its medical and recreational use. Either way, however, many employer rights and obligations will not change.


At CKB Vienna LLP, we can help you navigate the legal minefield that the semi-legalization of marijuana has created for employers and we can aggressively represent you if a dispute should arise over your treatment of your employees. Call us at 909-980-1040 orfill out our online contact form to learn how we can help you protect your interests. We serve clients from all over Rancho Cucamonga, including Alta Loma, Upland, Fontana, Chino Hills, and Claremont.