Kate

The Californian 2019 Q2 – U.S. SUPREME COURT: COURTS MAY ONLY COMPEL CLASS-WIDE ARBITRATION IF EXPRESSLY AGREED UPON IN EMPLOYMENT ARBITRATION AGREEMENT

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U.S. SUPREME COURT: COURTS MAY ONLY COMPEL CLASS-WIDE ARBITRATION IF EXPRESSLY AGREED UPON IN EMPLOYMENT ARBITRATION AGREEMENT

Jaimee K. Wellerstein, Esq., Bradley & Gmelich, CALSAGA Network Partner

In a split 5-4 decision in Lamps Plus, Inc. v. Varela, No. 17-988 (Apr. 24, 2019), the U.S. Supreme Court held that courts may only compel class action arbitration where the parties expressly declare their intent to be bound by such actions in their arbitration agreement. The holding and rationale are important to employers because the Court decisively ruled that class arbitration “fundamentally” changes the nature of the “traditional individualized arbitration” envisioned by the Federal Arbitration Act. Thus, the Supreme Court said, “Courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.”

Following the Supreme Court’s ruling, arbitration agreements must unequivocally state that the parties agree to resolve class actions through arbitration in order to proceed this way. Courts cannot compel the parties to arbitration when an arbitration agreement is ambiguous about the availability of class arbitration.

Employer Takeaway: This ruling is a win for employers. Courts can no longer impose class-wide arbitration unless the employer’s arbitration agreement clearly authorizes this. Only express agreements between the parties can lead to class arbitration. Companies, along with their counsel, should review their employment arbitration agreements to determine whether they comply with the SCOTUS standards.

Jaimee K. Wellerstein is a Partner at Bradley & Gmelich LLP, and the Head of the firm’s Employment Department. Jaimee concentrates her practice in representing employers in all aspects of employment law, including defense of wage and hour class actions, PAGA claims, discrimination, retaliation, harassment, wrongful discharge, misclassification, and other employment related lawsuits. She also provides employment counseling and training in all of these areas. Jaimee routinely represents employers in federal and state courts and in arbitration proceedings throughout the state, as well as at administrative proceedings before the Equal Employment Opportunity Commission, the California Department of Labor Standards Enforcement, the United States Department of Labor, and other federal and state agencies. Jaimee assists as a Legal Advisor to CALSAGA, and is a member of ASIS International. She is rated AV-Preeminent by Martindale Hubbel, the highest peer rating available. [email protected] 818-243-5200.

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Kate

The Californian 2019 Q2 – ESSENTIAL CONTRACT TERMS FOR YOUR SECURITY SERVICES AGREEMENTS

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ESSENTIAL CONTRACT TERMS FOR YOUR SECURITY SERVICES AGREEMENTS

Barry A. Bradley, Esq., Bradley & Gmelich, CALSAGA Network Partner

While recently teaching CALSAGA’s Security University course on contracts, it became clear that many of your service contracts with your clients are often missing some vital essential terms.  Without going into too much detail in this limited space, examine your contract template and see if they contain each of the following:

  • General Statement of Duties (Scope) Are your duties clear and defined both as to location, post responsibilities, hours, expectations, and especially limitations? Are your officers to use force? Are they just required to observe and report?
  • Term of Contract When does your service agreement expire? Will it automatically renew? Is termination addressed?
  • Price and Payment Terms Are all service hours defined and invoicing defined?
  • Attorney’s Fees If a dispute arises between you and your client (for example, for non-payment), does the prevailing party have a right to recover its reasonable attorney’s fees?
  • Disclaimers Are you making promises you shouldn’t?
  • Indemnification This is perhaps one of the most vital areas of your agreement. Is it in your favor, or are you giving up the farm?
  • Insurance Requirements Are you providing appropriate insurance coverage? Are you required to name your client as an Additional Insured? Are there exclusions that might apply for which you might not have coverage?
  • How Disputes are Resolved? In the event of a legal dispute with your client, where and how will it be addressed?

These are just a few of the necessary provisions that should be addressed in any of your service contracts.  There are additional areas that can protect your business, but at a minimum, you should make sure you have these basics.

LESSON LEARNED:  We all know it is better to use your own contract than one that is drafted by your client. Your basic template can and should fully protect your business.  However, when you must use your client’s contract, you can always negotiate before you enter into the agreement and try to ensure that some of these essential provisions are there that will protect your business.

Contact us to assist you in reviewing your contract template, or any agreements you might be asked to sign.  (Once you sign it, it’s too late to change things.)

Barry A. Bradley is the Managing Partner of Bradley & Gmelich LLP located in Glendale, California, where he heads up the firm’s Private Security Team and oversees the Employment and Business Teams at the firm.  A former Deputy District Attorney, Barry’s practice concentrates on representing business owners in employment, business and licensing issues, as well as defending litigated cases involving negligent security, employment and business related issues.  The firm acts as general counsel for many security companies in California.  Barry is the Legal Advisor to CALSAGA.

He has been conferred an AV-Preeminent Peer Rating by Martindale Hubbell, the highest rating attainable, and has been named a Southern California Super Lawyer for the past 14 consecutive years in the area of Business Litigation.  Barry is also the recipient of CALSAGA’s Security Professional Lifetime Achievement Award. [email protected]  818-243-5200.

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Kate

The Californian 2019 Q2 – HEAT ILLNESS PREVENTION

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HEAT ILLNESS PREVENTION

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

It’s that time of the year….not post tax season… Heat Illness Prevention season!

With the change in seasons comes the warmer weather and it is imperative (And required by Cal/OSHA) that all employers train their supervisors and employees on heat illness prevention. The safety of your employees is the responsibility of the employer and if an unfortunate event does occur, Cal/OSHA may  be investigating the event. If so, they will be asking if you have your Heat Illness Prevention Program in place. The investigation will include verification that you have provided training to your supervisors and employees.

A Cal/OSHA study identified the key role that employers play in preventing worker fatalities due to heat illness. The findings highlighted the value of training supervisors so that they can make the fullest use of their power to control safety on the job.

California Code of Regulations, Title 8, Section 3395 Heat Illness Prevention requires all employers to have a Heat Illness Prevention Program which includes the following:

Provide fresh/potable drinking water

Employers must provide employees with fresh, pure, and suitably cool water, free of charge. Enough water must be provided for each employee to drink at least one quart, or four 8-ounce glasses, per hour and the water must be located as close as practicable to the work area. Employers are also required to encourage employees to drink water frequently

Provide access to shade

When temperatures exceed 80 degrees, employees must be provided shade at all times in an area that is ventilated, cooled, or open to air and that is as close as practicable to the work area. There must be sufficient space provided in the shade to accommodate all employees taking rest. When temperatures do not exceed 80 degrees, employees must be provided timely access to shade upon request. Employees should be allowed and encouraged to take preventative cool-down rest as needed, for at least 5 minutes per rest needed.

Have high heat procedures in place

High heat procedures are required of agricultural employers when temperatures exceed 95 degrees. The procedures must provide for the maintenance of effective communication with supervisors at all times, observance of employees for symptoms of heat illness, procedures for calling for emergency medical services, reminders for employees to drink water, pre-shift meetings to review heat procedures and the encouragement of employees to drink plenty of water and take preventative cool-down rest as needed.

Agricultural employers must additionally ensure employees take, at a minimum, one 10-minute preventative cool-down rest period every two hours in periods of high heat.

Allow for acclimatization

New employees or those newly assigned to a high heat area must be closely observed for the first 14 days of their assignment. All employees must be observed for signs of heat illness during heat waves. A “heat wave” is any day where the temperature predicted is at least 80 degrees and 10 degrees higher than the average high daily temperature the preceding 5 days.

Train all employees regarding heat illness prevention

Employees must be trained regarding the risk factors of heat illness and the employers’ procedures and obligations for complying with the Cal/OSHA requirements for heat illness prevention. Supervisors must additionally be trained regarding their obligations under the heat illness prevention plan and how to monitor weather reports and how to respond to heat warnings.

Have emergency response procedures

Employers must have sufficient emergency response procedures to ensure employees exhibiting signs of heat illness are monitored and emergency medical services are called if necessary.

Have a Heat Illness Prevention Plan

Employers must have a written heat illness prevention plan that includes, at a minimum, the procedures for access to shade and water, high heat procedures, emergency response procedures, and acclimatization methods and procedures.

For your reference, linked is a sample of a Heat Illness Prevention Plan.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or [email protected].

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Kate

THE CALIFORNIAN 2018 Q3 – FEELING THAT CANNABIS HIGH

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FEELING THAT CANNABIS HIGH

by Stephan P. Hyun, Esq.

 

Starting on January 1, 2018, cannabis-related business activity became legalized in California, resulting in a lot of questions about the opportunities that have now become presented.  We as legal counsel often get asked:  Should I do business with a cannabis company?  What should I look out for?  How do I protect myself?  After all, this legalization affects both the licensed cannabis businesses themselves as well as the businesses who do business with them.

Here are important issues that we frequently deal with in protecting our clients who want to start doing business with a cannabis company.

1) Typically in contracts, there are provisions that say how the agreement will be governed and interpreted, as well as where any claims can be brought.  Having these provisions properly drafted can be ‘life-savers’ because while cannabis is legal in California, it is not legal federal-wide.  Also since California has enacted additional protections to ensure that the contract can be enforced under California law, adding certain clauses and language in your contract can allow California courts to determine that your contract is valid and enforceable.  This will help you in instances when the cannabis business your dealing with is not upholding their end of the bargain.

2) We advise our clients to put into the agreement ways in which you can terminate or suspend your services immediately without any notice.  When advising our clients and drafting their contracts, we take into account the possibility of the federal government investigating or prosecuting cannabis activity even in states where it’s ‘legal’.

3) Our firm has negotiated key provisions to be incorporated into cannabis security service contracts.  One of the provisions that we insist be carved out is about when the cannabis business will defend you and cover your losses if the federal government comes after you for being seen as facilitating/assisting a cannabis business.

4) In the agreements we have worked on, we want to ensure our clients are protected by eliminating consequential damages.  Consequential damages are damages that go beyond the contract itself and flow from some type of failure in adhering to the contract.  Consequential damages in a cannabis-related situation would be the loss of the cannabis product that may have been stolen, or the cannabis company’s lost profits as a result of the security officer failing to show up at the dispensary on time.  For our clients, we advise them to limit their exposure, and draft contracts to meet that end.

5) Because many banks do not want to deal with cannabis businesses, cannabis businesses frequently pay in cash.  We counsel our clients to be wary of the temptation to be paid in cash.  By accepting cash, you could be accused of money laundering by the federal government.  Further, federal prosecutors may be suspicious that you are not simply a security services provider, but rather a pawn in the cannabis company’s scheme to hide where the money is truly coming from.  Certainly, this is unwanted attention for your business.

Recommendation:  We recommend that you get ahead of the ball and be proactive in preparing separate cannabis security service agreements, different from your standard contracts.  That way you lead in the negotiations for your services versus the other way around.  By understanding the intricacies and interplay between federal and state cannabis law, you will be able to fully capture this new opportunity and better protect yourself from this emerging cannabis high.

 

Stephan P. Hyun is an associate attorney at Bradley & Gmelich LLP, where he represents clients in a variety of business litigation and general liability matters, with a focus on providing legal counsel in business transactions and contracts, as well as business formation/development.  His practice also extends to handling licensing and compliance issues for both private security and cannabis industries.  He recently presented on the topic of Cannabis in California at the CALSAGA conference.  [email protected]  /  818-243-5200.

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Kate

THE CALIFORNIAN 2018 Q3 – WHEN DOES  A “TALL” BECOME A “VENTE?”

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Bradley & Gmelich LLP’s Legal Corner

In this issue, we have two articles.  From our Employment Team, we address a new California Supreme Court case requiring payment of wages for trivial work that may be performed after an employee clocks out, even if it only takes two minutes.  We also present, from our Business Team, an article to those PPOs who are thinking of selling to another company – some questions to help you look for potential blind spots.

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From Our Employment Team:

WHEN DOES  A “TALL” BECOME A “VENTE?”

(OR, WHEN DOES SOMETHING MINIMAL BECOME BIG?)

Barry A. Bradley, Esq., Bradley & Gmelich, CALSAGA Network Partner

On July 26, 2018, the California Supreme Court dealt another blow to employers, as it departs from applying federal law to our wage and hour issues.  In Troester vs. Starbucks Corporation, plaintiff brought a class action on behalf of himself and all non-managerial hourly employees who had to perform store closing tasks.

Essentially, Troester said he was required to clock out at closing, and then transmit data from the computer regarding daily sales, profit and loss, and store inventory data to Starbuck’s corporate headquarters. Troester would then activate the alarm, exit the store, and lock the front door.  Occasionally he would escort other employees to their cars, pursuant to Starbucks policy. These tasks typically took anywhere from 4 to 10 minutes to complete, but averaged less than 5 minutes.

He sued Starbucks arguing that he (and all non-managerial employees who closed the stores at night) should have been compensated for this minimal time.  (Over a 17-month period, it added up to $102.67.)  Starbuck’s argued that the time was de minimus, or so trivial that it doesn’t deserve to be counted.  Federal labor laws have long recognized that such minimal work need not be compensated, under the so-called de minimus doctrine.

Although the district trial court threw out the case, the California Supreme Court unanimously disagreed with Starbucks and the district trial court. In holding that the de minimus doctrine does not apply to California wage and hour laws, it opened the door for class action lawsuits on these new grounds.  The Court held that even though the employee’s tasks only took a few minutes, the fact that employees were required to regularly work for nontrivial periods of time without providing compensation was tantamount to requiring off-the-clock work.  Besides, to Troester, the Court reasoned that $102.67 may not have been so trivial – it could have paid for a monthly gas bill, or perhaps a nice dinner.

Thus, the Troester plaintiffs can now pursue their class action lawsuit against Starbucks alleging unpaid wages, as well as the “coat-tail” claims of inaccurate wage statements, failure to pay all final wages in a timely manner, and unfair competition.

[Note:  the Court expressly did not decide the question of whether an employee who, on rare occasion needs to spend a few minutes doing something after they clock out, would constitute a violation. The Court limited its decision to the specific facts presented, and left open the fight of whether occasional work need be compensated for another day.]

RECOMMENDATION:  Do not require your employees to regularly perform tasks after they clock out.  This could include writing in a pass-down log, conducting verbal shift-change information, calling-in to their supervisors to give updates, or just cleaning out a patrol vehicle to lock up the items.  If this is part of their job duties and it is required to be performed after they clock out, you are in violation of the wage laws. This could result in a serious class action or a Private Attorneys General Act (PAGA) lawsuit.

 

Barry A. Bradley is the Managing Partner of Bradley & Gmelich LLP located in Glendale, California, where he heads up the firm’s Private Security Team and oversees the Employment and Business Teams at the firm.  A former Deputy District Attorney, Barry’s practice concentrates on representing business owners in employment, business and licensing issues, as well as defending litigated cases involving negligent security, employment and business related issues.  The firm acts as general counsel for many security companies in California.  Barry is the Legal Advisor to CALSAGA.

He has been conferred an AV-Preeminent Peer Rating by Martindale Hubbell, the highest rating attainable, and has been named a Southern California Super Lawyer for the past 14 consecutive years in the area of Business Litigation.  Barry is also the recipient of CALSAGA’s Security Professional Lifetime Achievement Award. [email protected]  818-243-5200.

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Kate

THE CALIFORNIAN 2018 Q3 – CALIFORNIA SUPREME COURT DECISION REDEFINES THE GUIDELINES OF INDEPENDENT CONTRACTORS

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CALIFORNIA SUPREME COURT DECISION REDEFINES THE GUIDELINES OF INDEPENDENT CONTRACTORS

Shaun Kelly, Tolman & Wiker, CALSAGA Preferred Broker

On April 30, 2018, The California Supreme Court issued a ruling in Dynamex Operations West. Inc. v. Superior Court, making it much more difficult to classify an individual as an independent contractor (rather than employee). The previous standard for classifying individuals as employees or independent contractors had been in place since the 1980’s and was based on a multi-factor test that considered, among other factors, the individual’s abilities, the method of payment, and the extent of control exercised over individual. In the Dynamex ruling, the Supreme Court adopted a new three-part “ABC Test” that is intended to reduce the use of independent contractors in the California workforce.

The new standard adopted by the California Supreme Court requires the hirer to establish three factors in order to properly classify a worker as an independent contractor – and in the process greatly expands the definition of “employee” under California law. Here is the information to classify an individual as an Independent Contractor:

Is free from the control and direction of the hirer in connection with the performance of the work, both under contract for the performance of such work and in fact; and

Performs work that is outside the usual course of the hiring entity’s business; and

Is customarily engaged in an independent established trade, occupation or business.

All three are required in order to fulfill the test.

Even though the “ABC Test” is written to simplify the definition of independent contractor, the application of the three part test is not going to be that simple. It will be the hirer’s responsibility to satisfy the “ABC Test” in order to lawfully classify an individual as an independent contractor. Please keep in mind, this decision was made under the Wage Orders of the Industrial Welfare Commission. As we all know, there will more than likely be subsequent cases, actions and rulings that will be restricting or expanding the Court’s decision to other state department (i.e. Workers’ Compensation).

So, if you are hiring independent contractors or being hired as an independent contractor, now is the time to review the following regarding the new “ABC Test”:

-Identify your independent contractor relationships

-Description of duties of those relationships to the “ABC Test”

-Review contracts involving independent contractors

-Prepare a file for each relationship to include name, description of duties, FEIN#, insurance certificates…

-And any additional information to support the independent contractor relationship (Remember, independent contractors must have the ability to work for multiple clients and they provide their own tools and materials to complete the job free from control of the hirer)

 

Thank you for taking the time to read the article.

Shaun Kelly joined Tolman & Wiker Insurance Services in 2005.  He specializes in all lines of property and casualty insurance for industries including contract security firms, agriculture, construction, oil and gas. Shaun received a BS in Business Administration with a major in Finance from California State University in Fresno, California. He is an active member of several industry associations, including the Association CALSAGA, the Kern County Builders Exchange and the Independent Insurance Agents of Kern County. Shaun can be reached at 661-616-4700 or [email protected].

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Kate

THE CALIFORNIAN 2018 Q2 – A BUY-SELL AGREEMENT?

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A BUY-SELL AGREEMENT?

Harold A. Laufer, Esq., Bradley & Gmelich

When a business has at least two owners, it’s important that the owners have some form of “partnership” agreement between them. This document is sometimes called a Buy-Sell, a Shareholders Agreement if a corporation, and an Operating Agreement if an LLC.

You can address many potential issues, or just a few in the agreement. Some of the most frequent topics addressed are: 1) restricting the right of an owner to transfer his or her ownership to an outsider, without offering the equity first to the company; 2) how to handle death, disability, termination of employment (voluntary or involuntary) of an owner; 3) how to handle decision deadlocks between owners; and 4) how to value an owner’s equity if a buy back is going to occur

Having a Buy-Sell Agreement allows the business owners to know in advance how each of these circumstances will be handled, rather than some important event occurring with no one knowing exactly how to respond.

 

Harold Laufer is a highly experienced corporate transactional lawyer. He has been affiliated with Bradley & Gmelich LLP for over two years.  He spent much of his career practicing corporate law as an equity partner at a major Midwest law firm, where he headed the Mergers and Acquisitions Practice Group. He has represented companies of all sizes, from start-ups to Fortune 500 companies. Mr. Laufer handles a wide variety of transactions for corporate clients, with experience in all aspects of a business’ life cycle, starting with deal structuring and entity formation, and continuing through Founder’s documentation, initial HR, IP, rights and licensing issues, financing, growth, corporate governance and eventually ending in liquidity events and exits.

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