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EMPLOYERS: CALIFORNIA WRONGFUL DISCHARGE CAN’T BE BASED ON ORDINANCES
Download a PDF of the article here: By the Firm’s Labor & Employment Department For California employers, one of the most significant legal RISKS is a wrongful termination lawsuit. For a sometimes bewildering variety of reasons, terminating an employee can wind up with you as a defendant, either in court or negotiating a settlement with someone from the very aggressive, skillful, and innovative plaintiff’s bar. There are a lot of situations in which letting someone go can spell real legal trouble. Fortunately, the California Supreme Court recently handed down a decision that both limits and clarifies one of them: the “violation of public policy” claim. First, a little background. It is fairly settled employment law that an employer cannot punish an employee for exercising a legal right. While California is a right-to-work state, in which employers have considerable freedom in hiring, firing, discipline, and so on, you cannot, in general, fire someone for obeying the law because you disagree, or it has consequences for you. This includes situations in which employers attempt to retaliate against employees for: Refusing to break the law; Performing a legal obligation; Exercising a legal right or privilege; or Reporting a potential violation of an important law. As an example, an employee of a medical practice who notices what she thinks is insurance fraud cannot be fired in retaliation for reporting what she’s seen to a government authority. Someone who works for a railroad cannot be fired for reporting falsified safety records. You also cannot fire or discipline someone for taking time away from work to vote, serve on a jury, and so on. There are some limitations to this. There has to be a connection between the termination and the employee’s action. If an employee of a restaurant reports suspicion of serving alcohol to minors to the state’s Department of Alcoholic Beverage Control, and is fired six years later, there isn’t a connection, and thus, there isn’t a case. Another significant limitation is the “important law” concept. Since at least 1997, California employees have a case for wrongful termination only if the legal policy at issue meets the following criteria: The policy is set forth in a statute or constitutional provision; The policy serves the interests of the public rather than that of the individual; The policy was well-established at the time of the wrongful termination; and The policy is “substantial and fundamental.” Over the past twenty-odd years, the plaintiff’s bar has successfully included a wide range of statutes, policies, laws, and regulations in these cases. A few weeks ago, however, the California Court of Appeal drew an important line in the case of Bruni v. The Edward Thomas Hospitality Corporation (May 14, 2021) ___ Cal.App.5th ___ (“Bruni”), which held employees cannot sue for wrongful termination based on the alleged violation of a local ordinance. The facts of Bruni are relatively simple. A restaurant server sued his former employer claiming, among other things, violation of a local recall ordinance; and a wrongful failure to rehire claim based on the alleged public policy expressed in the local ordinance. The key concept here is the claim that a fundamental public policy was expressed in a local ordinance. As it turns out, no, it wasn’t. The Court affirmed the trial court’s dismissal of the claim because “a municipal ordinance cannot serve as the predicate for a [wrongful termination] tort claim.” The Court went on to hold that wrongful discharge claims must be based on a fundamental public policy “expressed in a constitutional or statutory provision.” Being a California employer is nobody’s idea of easy. However, with this decision, it just became a little easier. Or at least, clearer. “Public policy” means “state law or constitutional provision,” not a local ordinance. If you have questions, contact Gregory J. Norys, head of the firm’s Labor & Employment Department, at firstname.lastname@example.org or (559) 248-4820. © Coleman & Horowitt, LLP, 2021 About the Firm: Established in 1994, Coleman & Horowitt is a state-wide law firm focused on delivering responsive and value-driven service and preventive law. The Firm represents businesses and their owners in matters involving transactions, litigation, agriculture & environmental regulation and litigation, intellectual property, real estate, estate planning and probate. The Firm has been recognized as a “Top Law Firm” (Martindale Hubbell) and a “Go-To” Law Firm (Corporate Counsel). From six offices in California, and the Firm’s membership in Primerus, a national and international society of highly rated law firms (www.primerus.com), the Firm has helped individuals and businesses solve their most difficult legal problems. For more information, see www.ch-law.com and www.Primerus.com. Disclaimer: This article is intended to provide the reader with general information regarding current legal issues. It is not to be construed as specific legal advice or as a substitute for the need to seek competent legal advice on specific legal matters. This publication is not meant to serve as a solicitation of business. To the extent that this may be considered as advertising, then it is expressly identified as such.view the article
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E-COMMERCE LIABILITY IN CALIFORNIA APPLIES TO THIRD-PARTY SELLERS
Download a PDF of the article here: By the Firm’s IP and Tort Practice Groups In law, “strict liability” is an interesting concept. It provides that any company that places a consumer product in the stream of commerce (i.e., is part of the distribution process such as manufacturer, retailer or other seller) may be liable for injuries caused by the product as the result of a manufacturing or design defect, provided the product is used as intended. (Soule v. GM Corp. (1994) 8 Cal.4th 548, 560.) Broadly speaking, it means that you are responsible even though you weren’t negligent. There doesn’t have to be any evidence they did anything wrong. For years, whether a strict liability might apply to an online retailer like Amazon was not decided in California. That changed in 2020, with the decision in Bolger v. Amazon.com, LLC (2020) 53 Cal.App.5th 431, which held, in an issue of first impression, that Amazon could be potentially liable as it is “an ‘integral part of the overall producing and marketing enterprise that should be the cost of injuries resulting from defective products.’” (Id., at 453.) Once Bolger was decided by the Fourth District, it was unknown whether it would be followed by other courts. This was done recently by the Second Appellate District holding in Loomis v. Amazon.com LLC (April 26, 2021) ___ Cal.App.5th ___. There, the court found Bolger was properly decided and Amazon could be held so liable. The decision has important ramifications for anyone running a California-based e-commerce business. In Loomis v. Amazon, Kisha Loomis purchased a hoverboard for her son on Amazon. A hoverboard, by the way, is a kind of two-wheeled sideways skateboard popular with kids and balanced by gyroscopic gears. Four weeks later, the hoverboard’s battery exploded and started a fire, which spread to Loomis’ bed. She was injured putting it out and sued Amazon, claiming they sold her a dangerous product. Amazon filed a motion for summary judgment, contending that the hoverboard was sold by a third-party company based in China using Amazon’s platform, and because Amazon didn’t manufacture, sell or ship the hoverboard, they should not be held liable. They claimed the service they provided was basically logistics and an online mall, which didn’t have much to do with the actual product. In short, they were a mere service provider. The trial court agreed and granted the motion. Loomis appealed. By the time of the appeal, Bolger was decided. Loomis relied on Bolger to seek reversal. The appeals court agreed and reversed. The pivotal point in Loomis was that although, yes, Amazon didn’t manufacture the battery, they had enough to do with the transaction that liability made sense. The notion they were an online shopping mall/logistics company was rejected. As the Loomis court wrote: “Owners of malls typically do not serve as conduits for payment and communication in each transaction between a buyer and a seller. Moreover, they do not typically charge a per-item fee rather than a fixed amount to rent their storefronts. Instead, these actions – 1) interacting with the customer, 2) taking the order, 3) processing the order to the third party seller, 4) collecting the money, and 5) being paid a percentage of the sale – are consistent with a retailer or a distributor of consumer goods.” This is where it gets interesting. Amazon unquestionably was deeply involved in the transaction itself, as the Loomis court noted, but that doesn’t mean they had much to do with the problems in the hoverboard. How could they have known it was dangerous? Why should they have? Because it makes sense as a public policy. Courts take product safety very seriously. Having dangerous products bought and sold, and thereby injuring trusting consumers, is believed to be a major public issue, so as the law has evolved, the way courts think about the issue has moved away from “if you make a defective product, you’re liable” and towards a “if a consumer is injured, someone involved needs to compensate them” theory. In this case, that someone was Amazon. In a previous opinion, the court described the goals of strict product liability as “enhancing product safety, maximizing protection to the injured plaintiff, and apportioning costs among the defendants.” There are various ways to slice the legal salami of how much a defendant has to do with a dangerous product, but the bottom line is that if you were involved and can help compensate an injured plaintiff, for the second time (Bolger, Loomis), a California court will find you responsible. Loomis has real implications for anyone either selling products in California through Amazon’s third-party program, or selling someone else’s products through their own e-commerce operation. Significantly, California’s cases in this area differ from those of many other states, whose courts have held differently. Nevertheless, the bottom line is that liability in California for injured consumers who bought products online works differently here, and the operator of the e-commerce platform may share the risk. If you have questions, contact Sherrie Flynn, head of our IP Practice Group, at email@example.com or David Weiland at firstname.lastname@example.org or (559) 248-4820. © Coleman & Horowitt, LLP, 2021 About the Firm: Established in 1994, Coleman & Horowitt is a state-wide law firm focused on delivering responsive and value-driven service and preventive law. The Firm represents businesses and their owners in matters involving transactions, litigation, agriculture & environmental regulation and litigation, intellectual property, real estate, estate planning and probate. The Firm has been recognized as a “Top Law Firm” (Martindale Hubbell) and a “Go-To” Law Firm (Corporate Counsel). From six offices in California, and the Firm’s membership in Primerus, a national and international society of highly rated law firms (www.primerus.com), the Firm has helped individuals and businesses solve their most difficult legal problems. For more information, see www.ch-law.com and www.Primerus.com. Disclaimer: This article is intended to provide the reader with general information regarding current legal issues. It is not to be construed as specific legal advice or as a substitute for the need to seek competent legal advice on specific legal matters. This publication is not meant to serve as a solicitation of business. To the extent that this may be considered as advertising, then it is expressly identified as such.view the article
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DYNAMEX RETROACTIVE? YES, BUT …
Download a PDF of the article here On April 30, 2018, the California Supreme Court handed down a key decision in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903. This ruling, a landmark in the state’s labor law, set out the requirements for companies to classify workers as independent contractors. It was later made into law in 2019 by AB 5. Nearly three years later, in January of 2021, the Supreme Court in Vasquez v. Jan-Pro Franchising International, Inc. (2021) ___ Cal.5th ___, went even further, confirming in a unanimous ruling that the Dynamex holding applies retroactively. This has significant implications for all companies doing business in California. Essentially, the decision and the follow-up legislation are backed by organized labor, have their eye on the so-called “gig economy” and make it much, much harder for workers to be classified as independent contractors rather than employees. A little background. In 2018, the Dynamex holding replaced the so-called Borello standard, which established a multi-factor test for determining whether a worker was an employee or an independent contractor, largely based on the company’s control over the worker. Dynamex adopted a new “ABC test” which, rather than requiring a worker to prove they’re an employee, assumes they are unless the employer can demonstrate that the worker is: (A) not under the company’s control; (B) doing work that’s outside the company’s usual course of business; and (C) is customarily engaged in an independently established trade, occupation or business. Following this decision, and the enactment of AB5, a key question remained unanswered – would the new ruling and test be applicable retroactively? In other words, could the test be applied (and lawsuits be filed) against companies for activities prior to the issuance of the Dynamex decision in 2018? In Vasquez, the court responded with a firm “Yes”. Actually, however, it’s more of a “Yes, but …” Dynamex will now apply to cases that were filed, but not decided, in April 2018 as well as claims involving events prior to April. There are, however, a number of factors that limit its impact. First, under Proposition 22, which voters approved in November of last year, app-based drivers (Uber, Lyft, etc.) are exempt. Second, for a variety of reasons, whether Dynamex and Vasquez apply to a given work or workers is very fact-based – many jobs are not affected, depending on the job that’s being done and the nature of the case. And finally there’s the limitations period. In California, the statute of limitations for labor-related lawsuits is, in general, three years. So, even if Dynamex is applicable, because the decision was handed down on the last day of April, 2018, the retroactive window is getting closer and closer to being fully closed, and at the end of April, 2021, it will close for good. There may or may not be a flurry of last-minute filings prior to the end of April, but as always, if you suspect the employee/independent contractor issue may be a live one for you, consult with counsel. In fact, before deciding to categorize someone working for your organization, you should consult with counsel to make sure the person qualifies as an independent contractor either under the ABC test or an exception to the rule. If you have questions, contact the head of our labor and employment practices group, Gregory J. Norys, at (559) 248-4820 or email@example.com the article
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Collecting Money in the Time of Covid
In this webinar, Darryl Horowitt and Sheryl Noel discuss steps your business can take to reduce your exposure to businesses who do not pay. They also discuss remedies you have once a customer defaults, including remedies in bankruptcy court. We have provided two articles below for further reading and information. Watch it Here: https://youtu.be/0ODomvMi-VU Jump to various sections in the presentation. Times for the beginning of each section are below: How to Avoid a Collections Problem – 3:39 Identifying a Collections Problem – Don’t Let it Get Started – 11:29 Steps to Take if a Collection Problem Arises – 14:51 Legal Remedies – 22:55 Alternatives to Litigation – You Mean I Don’t Have to Sue? – 50:30 Bankruptcy Issues – Yes, You Can Do Something in Bankruptcy – 53:49 Presentation Slides are Available Here: https://ch-law.com/wp-content/uploads/2021/03/Collections-in-the-Time-of-Covid-.pdf Articles: PREVENTATIVE COLLECTION DOCUMENTING YOUR CREDIT TRANSACTION EFFECTIVE COMMERCIAL COLLECTION TECHNIQUESview the article
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OPERATING AGRICULTURAL IMPLEMENT OF HUSBANDRY VEHICLES WITHOUT A SLOW- MOVING VEHICLE EMBLEM CAN GET FARMERS IN TROUBLE, FAST
Download a PDF of the article here Over my last 25 years, as a lawyer practicing in the Central Valley of California, I have defended many farming operations and their employees, for accidents which involved tractors, trailers, or other moveable equipment referred to in Vehicle Code section 36000 as an “implement of husbandry.” These vehicles and equipment are typically designed and maintained to be operated at speeds of 25 miles per hour or less, and because of this fact, they have to be equipped with a “slow-moving vehicle emblem”, which is often referred to as a “reflective triangle.” In past cases, liability against my clients sometimes hinged on the proper installation and display of a slow- moving vehicle emblem. Keep reading the article here: https://ch-law.com/wp-content/uploads/2021/04/Slow-Move-AG-Article-Updated.pdfview the article