Monday, June 4, 2018

California Supreme Court Ruling Makes Independent Contractor Classification More Difficult

The California Supreme Court has made an important change to employment classification law for California employers, which will make it more difficult for companies to appropriate classify workers as independent contractors.

The new "ABC" standard is simpler but more strict than the prior classification scheme. In order to properly be classified as an independent contractor, the company must prove (note that the burden is on company seeking IC treatment and if the burden is not met, the worker is an employee) the following:

A - that the worker controls his or her work,

B - that the duties go beyond what the business normally does, and

C- that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

Any of these can derail a would-be independent contractor relationship, but it is the second of these prongs - the "B" in "ABC" - that will be perhaps the most difficult for many California companies including ride-sharing services that claim all drivers are independent contractors.

Whether Uber and Lyft, who have just received subpoenas for more information from the California Attorney General, will be able to argue they are in the business of providing a mobile app, rather than actual transportation, remains to be seen. If not, their business model will need to change dramatically, at least in California.

Companies whose consulting arrangements with ICs previously may have passed muster may find themselves unable to show that the pre-existing relationship still qualifies under the new ABC standard and are well advised to have a business and employment law attorney review the circumstances and agreement and then implement any needed changes.

The case is Dynamex Operations West, Inc. v. Superior Court, County of Los Angeles, Supreme Court of California, No. BC332016, April 30, 2018.

Tuesday, May 22, 2018

SCOTUS Rules for Employee Arbitration Class Action Waivers

The Supreme Court has resolved a conflict amongst the U.S. Federal Circuit Courts, and once again the Ninth Circuit has been overruled. This time it was for SCOTUS to confirm that class action waivers in employee arbitration agreements are enforceable (if properly drafted). The Supreme Court had previously ruled these as enforceable in consumer arbitration agreements in 2011.

Despite the favorable ruling for employers that was opposed by the Obama Administration and supported by the Trump Administration, California employers need to ensure their arbitration clauses are carefully drafted and be aware of the trade-offs in selecting arbitration over litigation in the first place.

The cases are Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP et al. v. Morris et al., No. 16-300; and National Labor Relations Board v. Murphy Oil USA, Inc., et al., No. 16-307 (May 21, 2018).

Saturday, December 2, 2017

Suspended Corporations and LLCs Lose the Right to Conduct Business in California

Jonas M. Grant was recently quoted as a California corporate law subject matter expert in an article in an online journal covering Los Angeles real estate news:
[The] corporation ... continues to conduct business even though the state of California suspended its registration over two months ago. Operating without a valid registration is illegal under California law, legal experts said. ...

Jonas Grant, an L.A.-based attorney who practices corporate entities law, said as a business without a valid corporation registration, “you’re basically dead in the water until you fix the problem.” ...

Suspension temporarily strips corporations of a number of rights ... including being able to defend itself in court or bring a lawsuit. Such corporations could also have contracts voided by a court, according to California law.

“If you don’t have the right to conduct business that would include the right to contract,” said Grant.

Inside Mercer Vine: A suspended brokerage, a potential fraudster at the helm, and $260M in dead deals by Natalie Hoberman and Will Parker, The Real Deal, December 1, 2017.

A suspended corporation cannot conduct any business in the State of California until it is revived to active, good standing, a process called revivor. This is generally accomplished by filing any past due annual reports or tax returns, and by paying any past due taxes, interest, and penalties with the Franchise Tax Board.

Recommended steps to avoid a suspension include engaging an accountant to assist with tax preparation and filing and to keep track of associated deadlines, and enrolling the LLC or corporation in a lawyer's corporate maintenance program to ensure legal compliance.

Sunday, May 14, 2017

Does LegalZoom Handle Its Own Trademark Registrations?

LegalZoom offers trademark filing services, so naturally, when it comes to its own trademarks used to promote this and other of its online, non-attorney document preparation services, it trusts these to its in-house team, the same ones used by its customers, right?  

Wrong.  According to publicly available U.S. Trademark Office records, LegalZoom.com is currently using Bryan Cave, a large law firm, to register its new trademarks and maintain its existing marks.

Click the image below to view one example:

You may want to consider following Legalzoom's lead and engage a trademark attorney to register, maintain, and advise your small business regarding trademark matters.

Tuesday, March 21, 2017

Why don't TV/film studios and producers accept unsolicited material?

Why Do TV Networks Have 'No Unsoliciated Materials' Policies?
One reason:
LAWSUITS. Networks do not want to get sued because you thought they stole your idea. When creators pitch an undeveloped idea anybody could have come up with ... they think a show that has anything do with their idea was stolen from them. For instance, Marc Zicree was a writer on “Star Trek Next Generation” and he told us there were one, or more, lawsuits filed for every episode by people who claimed their ideas had been ripped off. Are ideas ever stolen? Yes. Does it happen as often as rumored? Absolutely not.
Also see: Help, Hollywood Stole My Idea (or Script)!

Friday, October 7, 2016

Screenwriters: How to Find An Agent

ScreenwritingU is offering a free teleconference on a topic many new screenwriters have lots of questions about - how to land an agent. Sign up here.

Monday, September 19, 2016

Tips for Starting a Part-Time Side Business While Still Employed

Tips for Starting a Side Business from balance.com include:
[C]onsider running your business as a part-time operation alongside your current job...

understand and follow your employment contract to the letter, especially if it makes reference to inventions and intellectual property (IP) that you develop as part of your job. Almost always, anything developed on company time and using company property belongs to the company.