On May 1, 2023, a ban on single-use plastics went into effect for restaurants with permanent locations in unincorporated areas of Los Angeles County. The ban was originally passed in April of 2022 by the Los Angeles County Board of Supervisors, with enforcement rolled out based on the type of establishment. 

The ban will be enforced first in restaurants with permanent locations, then be effective on November 1, 2023 at food trucks, and May 1, 2024 at temporary/pop-up food facilities, catering companies, and farmers market. 

Restaurants that demonstrate financial hardship can apply ...

On April 28, 2023, a panel of judges from the U.S. Court of Appeals for the Ninth Circuit upheld a lower court’s dismissal of a lawsuit against Kroger alleging that the company misleadingly labeled spreadable fruit products as “Just Fruit.”

Plaintiff Sarah Vitort alleged that Kroger violated the Oregon Unlawful Trade Practices Act because the “Just Fruit” product included fruit syrup, pectin, calcium citrate, apple juice concentrate, and citric acid. Plaintiff argued that even though those ingredients could be extracted from fruit, they were not actually fruit ...

In a matter of first impression, a panel for the Third U.S. Circuit Court of Appeals recently affirmed a judgment of the District Court of New Jersey in Singh v. Uber Techs., Inc. (April 26, 2023), compelling arbitration in a putative class action against Uber Technology, Inc. (Uber). The class action was brought against Uber by its drivers who alleged that the rideshare company misclassified them as independent contractors, thereby depriving them of overtime pay and other benefits under wage and hour laws. The panel held that the drivers must bring work-related disputes as ...

A number of articles previously published in Receivership News have pointed out that while it is clear that receivers appointed by federal courts have quasi-judicial immunity ( See, New Alaska Dev. Corp. v. Guetschow, 869 F.2d 1298 (9th Cir. 1989); Trinh v. Fineman, 9 F. 4th 235 (3rd. Cir. 2021) [collecting cases]) up to  now it has been unclear whether that is true for receivers appointed by state courts in California, although there have been a number of unreported decisions that have held receivers do have such immunity (See, Haider v. Speiser, 2012 WL 41019411 (2012); Gruntz v. Wiley,

In law school, aspiring attorneys are taught fundamental concepts related to contracts, including “agency”, “third party beneficiary”, and “equitable estoppel”, terms which relate to determining who should be subject to the terms of a contract.  In Hernandez v. Meridian Management Services, LLC, the California Court of Appeals referred back to these law school basics in denying a motion to compel arbitration brought by a number of companies who were alleged to be “joint employers” of an employee, but who were not signatories to an arbitration agreement between ...

On April 13, 2013, the Federal Trade Commission (“FTC”) announced that it had sent a Notice of Penalty Offenses Concerning Substantiation of Product Claims and a Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct around Endorsements and Testimonials letter to almost 700 marketing companies.

The purpose of a Notice of Penalty Offense (“NPO”) is to put firms on notice about deceptive or unfair acts or practices the FTC has previously fully litigated.  After the FTC issues an NPO, any recipient of the NPO is considered to be on notice of the prohibitions against ...

On April 7, 2023, the City of Los Angeles (the “City”) released a revised “LA Al Fresco Ordinance,” to govern outdoor dining.  The City had previously released a February 2023 proposed ordinance that was met with intense opposition from restaurant owners and community members.

“LA Al Fresco” is a popular outdoor dining program that began in May 2020 during the COVID-19 pandemic in an effort to help restaurant owners use more space for outdoor dining without having to go through a prolonged approval process.  Through the program, restaurants and bars could apply to expand ...

The so-called “mansion tax” approved by Los Angeles voters in 2022 and effective April 1, 2023 (Measure ULA) is a misnomer. It establishes a new 4% documentary transfer tax on the sale of any real property priced or valued from $5 million up to $10 million and a 5.5% tax on real property sales priced or valued at $10 million or greater. This is in addition to the current base transfer tax. Measure ULA applies to more than just large homes. It applies to apartment buildings, raw land and commercial and industrial real estate. Anytime a sale price for real property exceeds $5 million in Los ...

Where companies are victimized by ransomware or email scams, their losses arise from payments made by an officer or employee of the company.

In the case of ransomware, a company’s files are held hostage pending payment by the company to release them. In the case of email scams, typically a company’s employee is tricked into sending funds to a third party account which the employee believes is legitimate.

In both cases, the loss is occasioned through some action by the company either in the form of payment to the cyber thief or to the fraudster’s account.

Insurers resisting payment ...

Until recently, employers had the luxury of interpreting the outside salesperson exemption to minimum wage, overtime and meal and rest period requirements at face value.  This is because the definition of an “outside salesperson” is simply codified as “any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services, or use of facilities.” 

However, in Espinoza v. Warehouse Demo Services, Inc.

As interest rates rise, borrowers may find themselves in default, facing lenders who overreach by seeking to recover default interest in addition to regular interest on the principal of the loan. Borrowers may have a weapon in their arsenal to oppose unscrupulous lenders.

In Honchariw v. FJM Private Mortgage Fund, LLC, 83 Cal.App. 5th 893 (2022), a borrower alleged that a default interest rate of 9.99% per annum on the then outstanding principal was illegal. The trial court affirmed an arbitration decision rejecting the borrower’s position. The Court of Appeal ...

In the 2020 general election, Californians passed Proposition 22, which gave ride-sharing and delivery app companies such as Uber, Lyft, and DoorDash the ability to continue classify their drivers as independent contractors.  Shortly after the proposition passed, a group of drivers challenged its constitutionality.  At its core, the issue is whether drivers in the gig economy should be entitled to the benefits typically afforded to employees.  As independent contractors, these workers forgo such benefits in exchange for the right to set their own work schedule and receive ...

Q: I was appointed a receiver to collect a judgment. I have not yet filed my final account and report, the court has not approved my final fees. Other creditors of the judgment debtor are demanding that I pay them, because they were not able to be paid from the judgment debtor’s assets taken into receivership. The judgment debtor has paid the judgment creditor and is now demanding that the receivership be terminated. Must the court now terminate the receivership?

A: Not necessarily. The general rule is a receivership should be terminated as soon as the purpose of the receivership has been ...

Over the last few years, employers throughout the United States have enjoyed some measure of protection from former employees who signed severance agreements.These agreements routinely contained a confidentiality provision that restrains former employees from disclosing the contents of the agreement to third parties other than (1) a spouse; (2) professional advisors for the purposes of obtaining legal counsel or tax advice; or (3) if legally compelled to do so by a court or administrative agency of competent jurisdiction.  These agreements also typically contained a ...

The saga of challenges to mandatory employment arbitration agreements is almost over. After three years of challenges, the United States Chamber of Commerce successfully appealed the enactment and enforcement of California’s Assembly Bill 51 (“AB 51”), which was originally intended to take effect on January 1, 2020. This piece of legislation would have banned the use of mandatory arbitration agreements as a condition of employment, and went so far as to include civil and criminal penalties on employers who violated the statute. 

After a federal district court granted a ...

Q:   A few months ago I was appointed receiver over an operating business. A party is complaining that I have not filed an inventory of the assets of the business. My order of appointment says nothing about my having to file an inventory. The business has hundreds, if not thousands, of items of property (tools, desks, fork-lifts, supplies, etc.). Do I have to go to the trouble and cost of preparing and filing an inventory and, if so, how detailed must it be?

A:   Yes. You must prepare and file an inventory. The fact that the order of appointment does not specifically state that an inventory is ...

The 2023 mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes have increased or remained unchanged from mid-year changes in 2022, when rates were last modified. Specifically, as of January 1, 2023, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

• 65.5 cents per mile driven for business use, up three cents from the rate for the latter half of 2022;
• 22 cents per mile driven for medical, or moving purposes for active duty members of the Armed Forces, unchanged from the ...

On January 23, 2023, a Ninth Circuit panel issued a 2-1 decision reversing a lower court’s dismissal of a serial ADA litigant’s complaint against a lobster shop in a shopping complex. The shopping complex had assigned the owner of the lobster shop a space in the parking lot, and the shop owner had placed a “Lobster Shop Parking Sign” near that space. Plaintiff Chris Langer filed a lawsuit based on the lack of accessible parking for the lobster shop.

Private ADA plaintiffs are limited to seeking injunctive relief and costs under Title III of the ADA, so a plaintiff must show a ...

On January 13, 2023, Sacramento Superior Court Judge Shelleyanne Chang ruled that implementation of the Fast Food Accountability and Standards Recovery Act (“FAST Act”) should remain on hold pending the Secretary of State’s quality control process to review petition signatures.  In so doing, the Court held that “[c]ase law is clear that a qualified referendum pending vote by the people in a general election suspends the effectiveness of a law before it takes effect” and noted that there was no authority to support the Department of Industrial Relation’s position that ...

Q: I represent a party in a receivership case. While the receiver has been in place for over 3 months, she has not served the parties or creditors with any reports. I have written the receiver requesting reports, but she has ignored my requests. What should I do? Can the receiver be sanctioned?

A: Rules of Court 3.1182(a) requires a receiver to provide monthly reports to the parties. It says: must. The receiver is not required to provide reports to creditors, unless the creditor is a lien holder and requests the reports. If the receiver is not complying with the rule, there are a number of ...

Losses arising from email scams are usually covered, if at all, under a company’s crime policy. But a recent decision from The District Court in Minnesota suggests that recourse may also be found under an insured’s cyber or business interruption coverage. Importantly, the decision suggests that a “data breach” triggering cyber coverage may occur where a bad actor infiltrates and manipulates an insured’s email system.

In Fishbowl Sols., Inc. v. Hanover Ins. Co., 2022 U.S. Dist. LEXIS 200210 (D. Minn. Nov. 3, 2022), a bad actor gained unauthorized access to the email ...

California retail businesses must prepare to open employee-only restrooms to members of the public to accommodate medical conditions including Crohn’s disease, ulcerative colitis, other inflammatory bowel disease, and irritable bowel syndrome.

On September 30, 2022, California Governor Gavin Newsom signed Assembly Bill 1632 into law. This bill requires a place of business that is open to the general public for the sale of goods and that has a toilet facility for its employees to allow any individual who is lawfully on the premises of that place of business to use that toilet ...

Effective January 1, 2023, AB 2068 provides that employers posting a Cal/OSHA citation, special order or action must post the Cal/OSHA English version of the notice, along with multiple language versions of the notification that Cal/OSHA will have prepared, as applicable to the workplace. 

Cal/OSHA is required to prepare these notifications in English and the top seven non-English languages used by limited-English-proficient adults in California, as determined by the U.S. Census Bureau’s American Community Census, which are currently Spanish, Cantonese, Mandarin ...

On December 30, 2022, Judge Shelleyanne Chang of the Superior Court of Sacramento issued a temporary restraining order to block adoption of the FAST Act, which was due to take effect on January 1. 

The Save Local Restaurants coalition of restaurant industry advocates filed a voter referendum on September 7, 2022 to block the new law, and appear to have gathered enough signatures to put the law on the November 2024 ballot. Despite the referendum, the California Department of Industrial Relations stated on December 27 that it would move forward with implementation of the FAST Act on ...

Beginning July 1, 2023, SB 731 will provide for the automatic sealing of certain felony criminal records.  Arrests that do not result in conviction will also be sealed. This law also permits individuals with violent or serious felony records to petition courts to order their criminal records sealed.  Sealing of these records will make them unavailable to most employers through a background search, although school districts may still access these records for teacher credentialing or employment decisions.

Under SB 731, most defendants convicted of a felony are eligible to have their ...

Faced with the expiration of its COVID-19 Emergency Temporary Standards, Cal/OSHA voted to establish non-emergency standards. Once approved by the Office of Administrative Law, which is expected to take place in January of 2023, the new standards will remain in place for two years and will apply to most workers in California who are not covered by the Aerosol Transmissible Diseases standard. 

The regulations continue several key ETS requirements, including complying with California Department of Public Health rules regarding face coverings, and providing respirators to ...

In response to recent Supreme Court decisions and laws in other states outlawing abortion, California passed a number of new laws designed to protect reproductive rights in the state. These include bills to prohibit a person from being criminally or civilly liable for a pregnancy loss, to prohibit a health care provider from releasing medical information on abortion care in response to out-of-state subpoenas, and to prohibit law enforcement cooperation with out-of-state entities related to a lawful abortion. California voters also approved Proposition 1 in November, which ...

California law already requires hotels to provide training to their staff on how to recognize human trafficking and how to report suspected trafficking to either law enforcement or the National Human Trafficking Hotline. Effective January 1, 2023, Assembly Bill (“AB”) 1788, codified as section 52.65 of the Civil Code, creates new civil liability for hotels for the failure of supervisory employees to report sex trafficking activity. 

Specifically, a hotel is liable under AB 1788 if sex trafficking activity occurred in the hotel and a supervisory employee of the hotel either ...

On January 1, 2023, Assembly Bill (“AB”) 676 will go into effect, significantly amending the California Franchise Relations Act and Franchise Investment Law.  The provisions of AB 676 will only apply to franchise agreements entered into, amended or renewed on or after January 1, 2023.  If the amendment was initiated by the franchisee and the amendment does not adversely impact the franchisee’s rights, that amendment is not subject to AB 676.

AB 676 prohibits franchise agreements from including a provision requiring the franchisee to disclaim their reliance on ...

Q: I represent a receiver in a contentious family law receivership. In order to prevent attorney client and work product information from being disclosed to one of the parties, the receiver does not want to attach my detailed bills to his monthly reports or to an upcoming interim fee application. I am concerned that not attaching my detailed bills may result in my fees not being allowed. Should I be concerned? Is there a way to protect such sensitive information and still have my fees approved?

A: Surprisingly, California law does not generally require detailed time sheets to be attached ...

The United States Equal Employment Opportunity Commission (EEOC) has released an updated “Know Your Rights: Workplace Discrimination is Illegal” poster that must be prominently displayed in the workplace. The poster summarizes various employee and applicant anti-discrimination protections that the EEOC enforces and also provides instructions on filing a workplace discrimination charge with the EEOC which include a QR code for quick digital access.  

The “Know Your Rights: Workplace Discrimination is Illegal” poster is available in English and Spanish:

• Know Your ...

California‘s FAST Recovery Act will likely be placed on hold until November 2024. 

The Save Local Restaurants coalition, a group composed of restaurant industry advocates, filed a voter referendum on September 7, 2022 to block the new law. California’s referendum process provides that opponents have 90 days from the date of a bill’s enactment to qualify a measure for the ballot by collecting enough signatures. Specifically, the group had until December 5, 2022 to submit 623,000 signatures in order for the law to be placed on the ballot.  Save Local Restaurants issued a statement

Governor Newsom signed Assembly Bill 2448 into law, which will enact Civil Code section 51.17. The law requires the Civil Rights Department (formerly the Department of Fair Employment and Housing) to establish a pilot program to recognize businesses that promote or create environments free from discrimination and harassment of customers.  Recognition will come in the form of a certificate the department would issue to qualifying businesses that may be prominently displayed on site. The department would also publish on its internet website a list of businesses receiving the ...

On November 22, 2022, the Los Angeles City Council passed the Fair Work Week ordinance (the “Ordinance”). The Ordinance passed with a 10-0 vote, and will go into effect on April 1, 2023. Covered employers subject to the requirements of the Ordinance are retail businesses with 300 or more employees globally, regardless of how many employees are based in Los Angeles.

The Ordinance requires covered employers to provide employees who work at two hours a week within the City of Los Angeles with written notice of their work schedules at least fourteen calendar days before the start of the ...

Effective January 1, 2023, Senate Bill 1044 will prohibit employers from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace or worksite during an “emergency condition” when the employee has a reasonable belief that the workplace or worksite is unsafe.  An “emergency condition” means the existence of either: (1) conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act; or (2) an order to evacuate a workplace, a worksite, a ...

What goes up does not come down! The trend of increasing the minimum wage continues in 2023 as follows:

State:

On January 1, 2023, the California state minimum wage will increase to $15.50 per hour for employers of all sizes. The state minimum wage also governs the exempt employee threshold salary, which will increase accordingly.  On January 1, 2023, the new minimum salary for employees who otherwise qualify to be exempt from overtime will be $64,480 annually for employers of all sizes.

Local:

Additionally, several California municipalities will raise their minimum wage rates on July ...

Beginning January 1, 2025, Senate Bill 951 will increase from 60% to a maximum of 90% the percentage of wage replacement based on the individual’s wages earned for persons receiving benefits under the Paid Family Leave (PFL) and State Disability Insurance (SDI) programs for claims filed on or after that date. To pay for this increase in benefits, on January 1, 2024, SB 951 will repeal the wage ceiling for contributions into the SDI fund, thereby making all wages subject to the SDI contribution rate.

Employees can apply for PFL or SDI benefits, as applicable, during an otherwise unpaid ...

Effective January 1, 2023, Senate Bill 1126 expands California’s CalSavers Retirement Savings Program by requiring employers with at least one employee to register for CalSavers by December 31, 2025, if the employer does not sponsor a retirement plan for its employees, or register as exempt if a retirement plan is provided.  Any employer may also choose to have a payroll deposit retirement savings arrangement (such as an IRA) to allow employee participation in the program.  However, SB 1126 excludes from the definition of “eligible employer” any sole proprietorships ...

On September 27, 2022, Governor Newsom signed Senate Bill (SB) 1162, which requires employers with more than 15 employees to post salary scales with every job posting and to disclose the pay scale for a position held by an employee upon request, and expands pay data reporting requirements for employers with 100 or more employees.

The law will go into effect on January 1, 2023.

Pay Scale Disclosure in Job Postings and Upon Request

Under existing California law, which went into effect in January of 2018, employers were required to disclose the pay scale of any open position to any applicant ...

Q: I am a receiver in a partnership dispute case. I have been served with a subpoena issued from a case outside the receivership case, seeking partnership records and emails to and from a defendant in that case. Neither the partnership nor the partners are parties in that case. Do I have to comply with the subpoena? There are few liquid assets in the estate and it will be costly to locate and produce the documents.

A: Based on the reasoning in a recent bankruptcy case, from the Central District of California, if the subpoenaing party did not first obtain leave of the receivership court to ...

Since its enactment in 2020, employers have been forced to be mindful of the burdensome imposition of Code of Civil Procedure section 1281.97 et seq., which requires an employer to pay the full amount of arbitration fees within 30 days of an arbitrator’s invoice being due, unless the arbitration agreement specifies a different deadline. In a recent opinion titled Espinoza v. Superior Court, the Court of Appeals clarified that this deadline must be strictly followed and there is no leeway for “substantial compliance.” 

In Espinoza, a defendant employer failed to pay the ...

Effective January 1, 2023, under Assembly Bill 1949, which amends the California Family Rights Act (CFRA), California employers with at least five employees must provide up to five days of bereavement leave to an eligible employee upon the death of a family member.  To be eligible for the leave, the employee must have completed at least 30 days’ service prior to the leave.  “Family member” means a spouse or a child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. 

The leave is unpaid, but the employee may elect to use available vacation, personal ...

With the relaxation of some governmental COVID-19 measures, it may appear that employers need no longer be concerned with any of the requirements imposed in the last two years.  On the contrary, the California Legislature has created a number of new COVID-19-related laws that may California Employers: 

• Assembly Bill 152 extends COVID-19 Supplemental Paid Sick Leave (SPSL), which had been set to expire on September 30, 2022, to December 31, 2022. That means that California employers with at least 26 employees must continue to provide, under specified COVID-19-related ...

Friends of Camden, Inc. v. Brandt, 81 Cal. App. 5th 1054 (August 2, 2022) illustrates the trickiness of the law governing dissolutions for limited liability companies and buyout election rights for those opposing dissolution. In Friends of Camden, the plaintiff manager and 1% owner of the LLC (Camden) filed an action for involuntary dissolution under Corporations Code section 17707.03. Certain defendants who were owners of 50% of the LLC moved immediately to exercise their rights to buyout Camden’s 1% ownership interest under Section 17707.03(c)(1) to avoid the dissolution ...

Where a liability carrier has assumed its insured’s defense under a reservation of rights, a variety of conflicts between those parties may arise when there are settlement discussions to resolve the underlying litigation. These conflicts include:

• The insurer wants to settle to end its exposure for defense costs and the insured wants to continue to fight for business or reputational reasons.
• Where the policy has “burning limits”—i.e., defense costs reduce the amount of coverage available to pay a settlement or judgment—the insured has an incentive to have the carrier ...

Whether consumer protec­tion or false advertising claims are covered by insurance depends on the kind of insurance policies in play. For ex­ample, coverage for such claims under a CGL policy is unlikely be­cause an insured's false represen­tation or false advertising about the qualities of its products typically does not fall within any of the "offenses" enumerated under the "advertising injury" coverage grant. See Applied Bolting Tech Prods v. US Fid & Guar Co., 942 F Supp 1029 (ED Pa 1996), in which the court held that alleged false advertising that an insured's products ...

On September 15, 2022, the Federal Trade Commission (“FTC”) issued a Policy Statement on Enforcement Related to Gig Work (the “Policy Statement”).

The agency’s press release states: “American workers deserve fair, honest, and competitive labor markets. Over the past decade, internet-enabled “gig” companies have grown exponentially, and gig work now composes a significant part of the United States economy. One study suggests the gig economy will generate $455 billion in annual sales by 2023. The rapid growth of the gig economy is made possible by the ...

On September 15, 2022, the Court of Appeal of California, Fourth Appellate District reversed the lower court and revived false advertising claims involving “white baking” chips or morsels. 

Both cases involve the same plaintiff, David Salazar, and similar “white baking” products, which did not contain white chocolate. The Target product at issue was “White Baking Morsels,” and Walmart’s product was “Great Value White Baking Chips.” In both complaints, Plaintiff Salazar supported his position by a survey indicating that 88% of consumers incorrectly ...

On September 5, 2022, Governor Gavin Newsom signed Assembly Bill 257, a controversial and far-reaching law that will have a major impact on California fast food employers and is likely to shape the way the state regulates other industries in the future.

AB 257, the Fast Food Accountability and Standards Recovery Act or FAST Recovery Act, regulates nearly all fast food restaurants in the state and is poised to dramatically shake up regulation of the industry and impose standards far beyond the already high standards set for minimum wages and working conditions as enshrined by ...

Assembly Bill 2188 has been sent to Governor Newsom for signature. If signed, AB 2188 will serve to further protect workers who use marijuana when off work from discrimination in the workplace. Specifically, AB 2188 will make it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalizing a person, for either:

(1) The person’s use of cannabis off the job and away from the workplace; or

(2) An employer-required drug screening test that has found the person to have nonpsychoactive cannabis ...

Among other protections and rights, employees are entitled to the use of suitable seats when the “nature of the work reasonably permits the use of seats” pursuant to the Industrial Welfare Commission’s Wage Orders. As recently as 2016, the California Supreme Court detailed a fact-intensive framework and multi-factor test to assist employers with the determination of when the nature of the work permits the use of seats.  However, the question of how to determine whether an employee was in fact “provided” suitable seating by his or her employer remained unresolved.

Employers throughout California have been keenly awaiting the final decision from the 9^th Circuit Court of Appeals regarding the United States Chamber of Commerce’s challenge to California Labor Code section 432.6, which is designed to prohibit employers from enforcing mandatory arbitration agreements or requiring them as a condition of employment.

In our last report, the 9^th Circuit was awaiting the decision from the United States Supreme Court in the Moriana v. Viking River Cruises case, which also addressed the applicability of the Federal Arbitration Act’s ...

As we reported on June 30, 2022, the Los Angeles City Council voted unanimously to adopt a Healthcare Workers Minimum Wage Ordinance, which was designed to increase the minimum wage for workers of private healthcare facilities in Los Angeles to $25.00 per hour (the “ LA Ordinance”). The Ordinance would have gone into effect on August 13, 2022, but for a referendum petition against the ordinance filed on August 10, 2022. Similar ordinances have been passed in Long Beach, Monterey Park, and Downey. Like the LA Ordinance, the ordinance in Downey is also the subject of a referendum.

As a ...

The U.S. Government Accountability Office (“GAO”) issued a July 2022 report to urging federal agencies to better coordinate regulatory guidance on food-related challenges, including diet-related chronic health conditions and food safety. 

With regard to chronic health conditions related to diet and food, the report found that regulatory efforts were fragmented and ineffective.  Last year, in September 2021, GAO recommended that Congress consider identifying and directing a federal entity to lead a strategy on diet-related efforts, but the recommendation was not ...

In a move that has hospitality industry leaders expressing concerns about safety and a negative effect on tourism, on August 5, 2022, the Los Angeles City Council considered a proposal that would force hotels to rent vacant rooms to homeless people in exchange for government vouchers.

The ordinance was proposed by UNITE HERE Local 11, a labor union representing workers employed in hotels, restaurants, airports, sports arenas, and convention centers.  The ordinance began as an initiative petition and was secured by enough signatures to require the Council to vote on the measure.  The ...

As the use of biometric information for verification purposes becomes widespread, employers and others should be aware of statutes which regulate the collection, storage and dissemination of this data. In this regard, there have been several lawsuits involving the use or storage of biometric information which have resulted in multi-million dollar settlements.

The California Consumer Privacy Act (Civil Code sections 1978.100 et seq.) defines biometric information as follows:

“Biometric information” means an individual’s physiological, biological, or behavioral ...

Kellogg successfully defeated a fraud and misrepresentation lawsuit concerning its popular Pop-Tarts product when a judge in the Southern District of New York granted its motion to dismiss. Plaintiff Elizabeth Russett filed a putative class action in the Southern District of New York alleging that Kellogg had, among other things, committed fraud and violated multiple consumer protection statutes by misrepresenting the amount of strawberries present in its Frosted Strawberry Pop-Tart.

Plaintiff’s allegations were based on the claim that Kellogg misled its customers by ...

After succeeding in having “100% tuna” claims dismissed, Subway experienced a setback when a judge in the Northern District of California permitted certain revised claims about Subway Restaurants, Inc.’s tuna products to proceed. Plaintiffs Karen Dhanowa and Nilima Amin filed a putative class action complaint against the sandwich maker and multiple affiliates, alleging that they committed fraud and violated several California consumer statutes by claiming, among other things, that its tuna fish products were “100% tuna” and contained “100% skipjack and ...

On July 8, 2022, Mayor Eric Garcetti signed the City’s new Hotel Worker Protection Ordinance (“the Ordinance”) into law. The Ordinance was passed by the City Council on June 28, 2022. It will go into effect 30 days after Mayor Garcetti’s signature, on August 8, 2022.

The Ordinance is similar to hotel ordinances recently passed in Long Beach, Santa Monica, Glendale and West Hollywood, which were also pushed forward and drafted by the Unite Here Local 11 union. As part of an effort to raise its profile and further union organizing efforts, the union drafted the Ordinance as an ...

On June 29, 2022, Governor Newsom signed Senate Bill 54, the Plastic Pollution Prevention and Packaging Producer Responsibility Act (the “Act”).  The Act is designed to phase out single-use plastics in the state and is the country’s most comprehensive extended producer responsibility bill. The Act passed 67-2 in the State Assembly and 29-7 in the Senate.

The Act requires that by Jan. 1, 2028, at least 30% of plastic items sold, distributed or imported into the state be recyclable. By 2032, that number goes up to 65%. The Act also calls for a 25% reduction in single-use plastic waste ...

In Medidata Solutions, Inc. v. Federal Insurance Company, 268 F. Supp. 3d 471 (S. D. N. Y. 2017), aff’d, 729 Fed. Appx. 117 (2nd Circuit 2018), the Court found that there was insurance coverage where a company had been victimized by an email spoofing scheme that resulted in the company wiring funds to a fraudster’s account. More recent cases have also found insurance coverage for losses arising from similar incidents of this kind. See, e.g., Ernst & Haas v. Hiscox, Inc., 23 F. 4^th  1125 (9^th Cir. 2022)

In Medidata, the spoofed email came in the form of an email purportedly coming from the ...

On June 29, 2022, the Los Angeles City Council voted unanimously to adopt a Healthcare Workers Minimum Wage Ordinance (the “Ordinance”).  This comes after a 10-2 vote on June 21 required a second reading and vote. The Ordinance was initially submitted as an initiative petition to the City Clerk with voter signatures in May 2022.  Under the Ordinance, covered healthcare workers must be paid a minimum wage of $25/hour beginning on the effective date of the Ordinance. On January 1, 2024, the minimum wage will be further increased based on the Consumer Price Index for the Los Angeles ...

Effective July 1, 2022, the mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes will increase. 

In a rare move,  the IRS made this special adjustment for the final months of 2022 in recognition of recent gasoline price increases.  The IRS normally updates the mileage rates once each year in the fall for the next calendar year.  The last time the IRS made such a midyear increase was in 2011. 

Specifically, the new standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 62.5 cents per ...

On July 1, 2022, a number of local municipalities will be raising their hourly minimum wage, based on changes to the consumer price index, and as required by their minimum wage ordinances. 

Beginning July 1, 2022, the following increases will apply to all employers in the designated areas:

Additionally, on July 1, 2022, businesses in the City of West ...

Private Attorneys General Act (“PAGA”) actions are the proverbial boogeyman to California employers.  On June 15, 2022, the United States Supreme Court reined in some of this statute’s bite by holding that “aggrieved employees” who signed arbitration agreements governed by the Federal Arbitration Act (“FAA”) cannot split their individual claims and their PAGA claims by proceeding with arbitration for the former and a court action for the latter.  An enforceable arbitration agreement will cover all claims, including PAGA claims, raised by the representative ...

On July 1, 2022, the Responsible Beverage Service Training Program Act (Assembly Bill 1221) will go into effect.  This means that Responsible Beverage Service training for alcohol servers and their managers at California Department of Alcoholic Beverage Control (“ABC”) On-Premises licensed establishments will go from being voluntary to mandatory.

AB 1221 was passed in 2017, and required ABC to create a Responsible Beverage Service Training Program (“RBSTP”) to ensure servers of alcoholic beverages and their managers are educated on the dangers of serving alcohol to ...

On June 2, 2022, the U.S. Food and Drug Administration (“FDA”) announced the launch of a new “Supplement Your Knowledge” initiative, with resources targeted to consumers, educators and healthcare professionals.

The initiatives webpage includes videos, infographics, articles and a social media toolkit providing information and warnings to the targeted groups about dietary supplements.

The “Understanding Dietary Supplements” fact sheet notes the agency’s limited role in regulating supplements: “Under the Dietary Supplement Health and Education Act ...

In the words of Tom Cruise’s character Lt. Daniel Kaffee in A Few Good Men, “the hits keep on coming.” This quote crystallizes how California employers will undoubtedly feel following the California Supreme Court’s ruling in Naranjo v. Spectrum Security Services, Inc., decided on May 23, 2022.

Initially decided by the Second Appellate District in 2019, Naranjo previously stood for the proposition that failure to provide missed meal and rest break premium pay did not entitle employees to pursue waiting time penalties under Labor Code section 203 or paystub violation ...

Where multiple liability policies are triggered, does one of the insurers get to insist that its deductible be satisfied before the insured can be provided with a defense? Relatedly, can the insured choose which insurer should provide the defense?  

This situation arises frequently in cases where the underlying damage is “continuous or progressive.” Montrose Chemical Co. v. Admiral Ins. Co., 10 Cal. 4th 645, 662 (1995). In Montrose, the California Supreme Court held where there are successive policies, and where there is damage that is continuous or progressive across multiple ...

On May 19, 2022, the Federal Trade Commission (“FTC”) announced that it was considering changes to tighten its guidelines for advertisers against posting fake positive reviews or manipulating reviews by suppressing bad ones. The agency also warned social media platforms about inadequate disclosure tools. The FTC is seeking public comment on the proposed updates to its Endorsement Guides. 

The proposed updates include:

• Revising the definition of “endorsements” to clarify that “marketing” and “promotional” messages can be endorsements. When a social media ...

On May 12, 2022, Governor Gavin Newsom announced that California’s minimum wage is projected to increase to $15.50 per hour for all workers beginning on January 1, 2023. The accelerated increase is required by Section 246 of the California Labor Code, which was enacted in April 2016 through Senate Bill 3. That law provides that the minimum wage will increase according to a specified schedule when inflation exceeds 7 percent. Newsom’s press release states that “[t]he COVID-19 pandemic has resulted in persistent supply chain disruptions and labor market frictions have driven ...

The California Department of Fair Employment and Housing (DFEH) has updated a number of posters and pamphlets that California employers must post or distribute to employees. Employers should take note to use the most recent versions of these required documents.

All California employers are required to display the following poster, which was recently updated:  California Law Prohibits Workplace Discrimination and Harassment (PDF)

Additionally, California employers with at least five employees must display these three other posters, which were also recently updated:

On May 6, 2022, a panel of three judges in the Court of Appeals for the Ninth Circuit considered a challenge to California’s ban on foie gras. The law has been heavily litigated for nine years, including three sets of appeals before the Ninth Circuit.

The panel ruled 2-1 that the foie gras ban was not preempted by federal law and did not violate the dormant Commerce Clause.

California Health and Safety Code §25982 provides that “[a] product may not be sold in California if it is the result of force feeding a bird for the purpose of enlarging the bird’s liver beyond normal size.”  The ...

Liability insurance written on a claims made basis is designed to protect an insured against claims asserted following the policy’s inception even if the acts giving rise to the claim took place prior to policy inception. But if prior to policy inception the insured was aware of facts or circumstances that could have reasonably led the insured to believe a subsequent claim would be asserted during the policy period, then coverage might be challenged.

Liability carriers have sought to address this by including “prior knowledge” exclusions in their policies. Under those ...

On April 20, 2022, a $15 million class action settlement was approved by the court in Hesse, et al. v. Godiva Chocolatier, Inc., over the objections of multiple State Attorneys General.

Plaintiffs alleged that the company’s use of “Belgium 1926” as a marketing phrase led consumers to believe that chocolates were produced in Belgium rather than in Pennsylvania. Plaintiffs claimed that this marketing phrase violated state consumer protection laws and that consumers would not have purchased or not have paid as much for the chocolates if they knew they were not made in Belgium.

In ...

On April 21, 2022, the Cal/OSHA Standards Board (Board) met and formally adopted a third version of the COVID-19 Emergency Temporary Standards (ETS) by a vote of 6-1.  

The new ETS makes a number of changes to prior ETS rules, including: the significance of vaccination status, face-covering standards; testing requirements; cleaning and disinfection requirements; and the guidelines to follow for exclusion from and returning to work criteria.

Vaccination status is no longer an aspect of the ETS, even in the event of a COVID close contact in the workplace. In fact, the definition of ...

A jury in the United States District Court for the Southern District of California last month found that an international beer conglomerate’s marketing of one of its drinks infringed on the trademark of a smaller, independent craft brewery. Plaintiff Stone Brewing Company, LLC, an independent craft brewery based in San Diego, sued Molson Coors Brewing Company and related entities, alleging that Molson Coor’s rebranding of its Keystone beer infringed on Plaintiff’s “STONE” trademark.  

Named after a ski resort in Colorado, the original branding for Molson Coor’s ...

On April 18, 2022, the U.S. Food and Drug Administration (“FDA”) issued draft guidance for stakeholders on evaluating the public health importance of food allergens other than the current major food allergens identified by U.S. law. 

The current major food allergens recognized by law are milk, eggs, fish, crustacean shellfish, tree nuts, peanuts, wheat and soybeans. Those allergens must be listed on the labels of packaged foods. Sesame will become the ninth major food allergen on January 1, 2023.

The new draft guidance is part of FDA’s effort to evaluate emerging evidence ...

On April 21, 2022, the Los Angeles County Department of Public Health issued a Health Officer Order to note that masking in all public transit within LA County and in LA County indoor transportation hubs continues to be required.

Per the revised Order, masking continues to be required to be worn by everyone, 2 years of age and older, regardless of their COVID-19 vaccination status, on public transit within the County. This includes wearing masks on commuter trains, subways, buses, taxis, and ride-shares.

Masking is also required in indoor transportation hubs including airport and bus ...

On April 8, 2022, the Federal Trade Commission (“FTC”) announced that it was using its Penalty Offense Authority to seek a $5.5 million penalty for deceptive environmental claims against Kohl’s, Inc. ($2.5 million) and Walmart, Inc. ($3 million).

The FTC charged both companies with falsely marketing dozens of rayon textile products as bamboo and with claiming that the bamboo textiles were made using eco-friendly processes when the process actually used toxic chemicals and resulted in hazardous pollutants.

The proposed orders settling the FTC’s complaints against ...

The Cal/OSHA Standards Board has scheduled a meeting for April 21, 2022, to adopt a third version of the COVID-19 Emergency Temporary Standards (ETS). The proposed changes will serve to modify several portions of the ETS, including: face-covering standards; testing requirements for individuals returning to work after testing positive and not developing any symptoms; employer testing requirements; cleaning and disinfection requirements; and the guidelines to follow for exclusion from and returning to work criteria. If passed, the third readoption would be the final version ...

On March 25, 2022, the U.S. Food and Drug Administration (“FDA”) announced a public process to update the “health” nutrient content claim for food labeling. This process will include the agency’s review of a voluntary symbol that could be used to convey that a product meets the criteria for the nutrient content claim “healthy.”

The FDA issued a request for information on “healthy” labeling more than five years ago on September 28, 2016 and held a public meeting on March 9, 2017, but did not issue a new proposed rule. Until FDA issues guidance, food manufacturers can ...

Since the California Supreme Court’s ruling in Iskanian v. CLS Transportation Los Angeles, LLC in 2014, it has been widely understood that Private Attorneys’ General Act (“PAGA”) actions cannot be subject to employment arbitration agreements. The rationale for this decision has been that PAGA actions are unique in that the employee that brings the claim is not acting in an individual capacity, but rather acts as a representative for the Attorney General on behalf of the State of California.  For that reason, the Federal Arbitration Act (FAA), which would otherwise preempt ...

On March 30, 2022, the Los Angeles City Council voted 13-1 to end the City’s mandate requiring customers to show proof of COVID-19 vaccination to use indoor facilities at restaurants, bars, gyms, personal care establishments, and entertainment facilities. The ordinance passed with an urgency clause, so it will go into effect as soon as it is signed by the mayor.  Individual businesses are still permitted to voluntarily require proof of vaccination if they choose to do so. The SafePassLA program mandating proof of vaccination has been in effect since November 8, 2021. Los Angeles ...

On March 28, 2022, the Supreme Court of the United States granted a petition for a writ of certiorari in the case of National Pork Producers, et. al. v. Karen Ross, 21-468.  

The order means that the Supreme Court will hear a constitutional challenge to California’s Proposition 12 farm animal confinement law. Proposition 12 was passed by California voters in 2018 as a ballot initiative.  The law prohibits confining certain farm animals (egg-laying hens, veal calves, and breeding pigs) in a cruel manner, and prohibits the sale of products from farm animals confined in a cruel manner in ...

On March 16, 2022, the Ninth Circuit joined other appellate courts in finding that restaurants were not entitled to insurance coverage for losses due to the COVID-19 pandemic shutdowns.  A panel of judges issued an unpublished opinion affirming a district court opinion that the pandemic and pandemic-related shutdown orders did not cause direct physical loss or damage within the meaning of the insurance policy at issue.

The case, Steven Baker v. Oregon Mutual Insurance Co., 21-51097, came upon appeal from the San Francisco District Court. Plaintiff was a San Francisco café seeking ...

On March 9, 2022, the Los Angeles City Council held a special meeting to discuss amending the City’s proof-of-vaccine requirement. The Council voted to direct the City Attorney to prepare a new ordinance making the verification of vaccine cards voluntary for covered locations and removing the requirement for large outdoor events.  Covered locations include restaurants with indoor dining, gyms, personal care establishments, and entertainment and recreation facilities.  The motion passed 12-0, with 3 absent members.  The Council did not hold a discussion on this matter before ...

Your CFO or accounts payable clerk receives a legitimate-looking email supposedly from the company’s president authorizing a wire transfer to a vendor or business partner. In reliance on that email, the company’s bank is directed to wire funds to that account. It is later revealed that the president was impersonated by an email scammer and the company’s money was wired to the scammer’s offshore bank account.

This practice, known as “spoofing", is widespread and is growing. According to data security firm Proofpoint, it is estimated that 3.1 billion domain spoofing ...

President Biden has signed H.R.4445, known as the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021”, into law. The law amends the Federal Arbitration Act to state that, at the election of the person alleging conduct constituting sexual harassment or sexual assault, or the named representative of a class or in a collective action alleging such conduct, no predispute arbitration agreement or predispute joint-action waiver will be valid or enforceable with respect to such cases as filed under federal, tribal, or state law. The law further provides ...

On March 4, 2022, Los Angeles County’s revised Public Health Order (the “Order”) went into effect, significantly relaxing masking rules and indoor proof-of-vaccine requirements.  As of March 3, 2022, Los Angeles County’s case and test positivity rates and hospitalizations had declined to a “Low” level, which prompted the change. 

Masks are strongly recommended, but no longer required in indoor public settings and businesses.  Masks continue to be required in transportation hubs, all healthcare settings, including long term care and adult and senior care ...

Consider the following two scenarios resulting in identical losses, but potentially two entirely different insurance coverage outcomes:

Scenario 1: A thief hacks, or gains unauthorized entry, into an insured’s computer system and causes that computer system to execute a bank transfer to the thief’s offshore account.

Scenario 2: A thief utilizes a process called “spoofing,” in which an authentic-looking, but fraudulent, email is created to trick the insured into wiring funds to the thief’s offshore account. The “spoofing” process in essence tricks the ...

On February 23, 2022, the Los Angeles County Department of Public Health announced that it would be modifying its Health Officer Order to allow establishments, businesses, and venues verifying vaccination status to make masking indoors optional for fully vaccinated patrons and workers. The modified Order will go into effect at 12:01 am on Friday, February 25, 2022.

Businesses, establishments, or venues that want to allow fully vaccinated customers and workers to unmask while indoors must verify that 100% of customers and workers provide proof of full vaccination or proof of a ...

On February 9, 2022, Governor Newsom signed Senate Bill 113, approving additional economic relief for the COVID-19 pandemic. The bill passed with strong bipartisan support, with a vote of 68-0 in the State Assembly and 27-0 in the State Senate.

SB 113 makes federal grants received through the Restaurant Revitalization Fund exempt from state tax liability. This means that businesses that received these grants will not have to pay California state taxes on the grant amounts.

Additionally, SB 113 will provide $150 million in grants to the state's Small Business COVID-19 relief ...

Consistent with last week’s announcement from the Los Angeles County Department of Public Health, at 12.01 AM today the county lifted the requirement that masks be worn outdoors at K-12 schools and childcare facilities as well as outdoor “mega” events, such as those held at the Hollywood Bowl and SoFi Stadium. The change is due to the drop in hospitalizations for COVID-19, as well as new COVID-19 cases, which have declined significantly over the last few weeks. 

However, unlike most other areas of California and, indeed, the United States, Angelenos will still be required to wear ...

Following Governor Newsom’s announcement that California’s indoor mask mandate would end on February 15, 2022 for all vaccinated persons, the Los Angeles County Department today issued a statement clarifying when the county’s own mask requirements would be eased. Specifically, when COVID daily hospitalizations drop below 2,500 for 7 consecutive days, masking will not be required at outdoor mega-events or in outdoor spaces at childcare facilities and K-12 schools. In addition, the masking requirement for indoor spaces will continue until:

• Los Angeles County has two ...

On February 7, 2022, California Governor Gavin Newsom announced that the state’s indoor mask mandate would expire on February 15, 2022, for vaccinated people.

New face covering guidance from the California Department of Public Health (“DPH”) will go into effect on February 16, 2022. Under the guidance, universal masking is only required in specified settings. These settings where masks will continue to be mandatory include:

• Public transit;
• Indoors in K-12 schools;
• Emergency shelters;
• Healthcare settings;
• State and local correctional facilities and detention centers;

On January 31, 2022, FDA released a list of draft and final guidance topics that are a priority for the FDA Foods Program to complete during the next 12 months.

The guidance topics include several focused on plant-based labeling, so companies making these products should pay close attention to developments. Several topics are focused on food safety and risk reduction so are specific to developing guidance on action levels for lead and arsenic in juice and prevention of some specific foodborne illnesses. Other topics could have a significant effect on product labeling and claims.

Some ...

The California Legislature expanded the Breaking Barriers to Employment Initiative by passing Assembly Bill 628, which amends Section 14033 of the Unemployment Insurance Code. 

AB 628 builds on the 2017 California Workforce Innovation and Opportunity Act, which made programs and services available to assist individuals with employment barriers with finding opportunities to join the workforce. Specifically, AB 628 seeks to enhance racial and economic justice, in addition to promoting employment. In doing so, AB 628 revises the 2017 grant selection criteria requirements, the ...

Q: I am a creditor of an entity that is now in receivership. I have contacted the receiver, and her attorney, a number of times requesting information about what is going on, especially the proposed sale of the entity’s assets. The receiver and her attorney have stated they don’t have to provide me with information and the receiver’s duty is only to the court and the parties in the case giving rise to the receivership. Is this correct? I want to make sure any sale is on the up and up so I get paid, as I don’t trust the owners of the entity, one of which sought the receiver’s appointment. 

In January 2022, FDA announced new initiatives focused on food safety, indicating that the agency will continue to prioritize that area. Several of these programs are designed to provide more transparency and more information on foodborne illnesses and food safety hazards directly to consumers. Others, including a new egg regulatory program and a proposed rule on pre-market notification for food contact substances, are more technical and industry-focused.

• On January 5, FDA announced its new public-facing reportable food registry. The RFR public data dashboard contains 10 ...

Continuing the trend of legislation in response to headline news, California passed SB 362 prohibiting the use of quotas at chain community pharmacies. This bill modifies California’s Pharmacy Law, which regulates all pharmacy licensees.

SB 362 applies to chain community pharmacies, which are defined as chains of 75 or more stores in California under the same ownership. Chain community pharmacies are distinct from independent community pharmacies (four pharmacies or less under the same ownership).

The bill adds Section 4113.7 to the Business and Professions Code. That ...

Governor Newsom and the California Legislature have agreed to enact new legislation that will revive COVID-19 paid sick leave. The prior law created by Senate Bill 95, expired on September 30.  The new law is included in the state budget process and should be complete in a matter of weeks.

The proposal is still being worked on, but it is likely that it will apply to all businesses with 26 or more employees. It is also probable that the bill will be retroactive to January 1, 2022 and will continue until September 30, 2022. The qualifying reasons will be the same as in SB 95 and will cover any ...

In an effort to support the Me Too movement, California previously enacted Code of Civil Procedure section 1001 to prohibit any provision in a settlement agreement that prevents the disclosure of an act of sexual harassment, discrimination or assault related to a claim filed in a civil or administrative action.  In addition, Government Code section 12964.5 was created to make it unlawful to require an employee to sign a nondisparagement or nondisclosure agreement to deny the employee the right to disclose information about unlawful acts in the workplace, including sexual ...

On the same day that the United States Supreme Court imposed a stay of enforcement on OSHA’s vaccine mandate for private employers with over 100 employees, the Court ruled that the Centers for Medicare & Medicaid Services (CMS) had the statutory authority to impose a vaccination mandate on healthcare providers who care for Medicare and Medicaid patients. Facilities in states that were not previously subject to injunctions (listed below) must demonstrate that their staff is fully vaccinated by February 28, 2022.

For those states where injunctions were lifted following the ...

Following an expedited hearing on January 7, 2022, the United States Supreme Court granted a petition for stay of enforcement of OSHA’s COVID-19 Vaccination and Testing; Emergency Temporary Standard that would have been imposed on employers of 100 or more employees.  This stay is, in effect, injunctive relief pending disposition of the numerous businesses, trade groups, and non-profit organizations’ consolidated petitions for review in the Sixth Circuit Court of Appeals.

The Court disagreed with the Sixth Circuit’s prior opinion and determined that the applicants’ ...

On January 5, 2022, Los Angeles County’s Department of Public Health modified its ongoing COVID-19 health order due to drastic increases in cases and resultant hospitalizations related to the Omicron and Delta variants. Among these modifications is an important new requirement which pertains to the wearing of masks by employees. 

Specifically, employers in Los Angeles County must now provide their employees who work indoors and in close contact with other workers or the public with a well-fitting medical-grade mask, surgical mask or higher-level respirator, such as an N95 ...

Q:  I was discharged as receiver a number of years ago. One of the defendants in the case has now sued me and my former attorney, contending we violated his civil rights when I sold some of his assets and that we conspired with the plaintiff to injure him. The former defendant did not obtain leave from the court that appointed me to sue me and my former attorney. Even though I was discharged and the case is closed, isn’t court permission to sue me still required?

A:  I assume that since you were sued for civil rights violations, the new lawsuit is in federal court. If the case is in First ...

The 2022 mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes have increased from last year or remained unchanged. Specifically, as of January 1, 2022, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

• 58.5 cents per mile driven for business use, up two and one-half cents from the rate for 2021;
• 18 cents per mile driven for medical, or moving purposes for active-duty members of the Armed Forces, up two cents from the rate for 2021; and
• 14 cents per mile driven in service of ...

On January 1, 2022, California’s new compost law will officially go into effect. Senate Bill 1383 was passed in September 2016 as part of a statewide effort to reduce emissions of short-lived climate pollutants. SB-1383 set the ambitious targets of reducing organic waste disposal 50% by 2020 and 75% by 2025.

Beginning on January 1, 2022, every jurisdiction in California (i.e., city, county, or special district that provides solid waste collection services) is required to provide organic waste collection services to all residents and businesses. The state’s CalRecycle ...

Under Assembly Bill 1003, which becomes effective on January 1, 2022, the intentional theft of wages in an amount greater than $950 from any one employee, or $2,350 in the aggregate from 2 or more employees, by an employer in any consecutive 12-month period can be punishable as grand theft. Violations carry a possible prison sentence of up to three years. This criminal charge would be in addition to any attempt to recover wages, penalties, interest and attorneys’ fees and costs through a civil action.

For purposes of the new law, “wages” include wages, gratuities, benefits or ...

Businesses and attorneys alike have kept a close eye on the developments surrounding the challenge to California Assembly Bill 51 (now codified as Labor Code section 432.6). Most recently, in a 2-1 decision, the 9^th Circuit Court of Appeals declared that the Federal Arbitration Act (“FAA”) did not preempt the new law which bars California employers from utilizing mandatory arbitration agreements or from requiring an employee to sign an arbitration agreement as a condition of employment.  One month after this decision came down, the Chamber of Commerce of the United States filed ...

On January 1, 2022, Assembly Bill 701, which aims to regulate and curb the use of quotas in warehouses, will go into effect. While the bill was specifically intended to target Amazon, all California warehouse employers must pay close attention to its provisions and to accompanying regulations that will likely be issued in 2022.

The bill requires employers of 100 or more nonexempt employees at a single warehouse distribution center, or 1000 or more non-exempt employees at one or more warehouse distribution centers in the state, to provide each employee with a written description of ...

Since being enacted in 2004, the Private Attorneys General Act (PAGA) has been a proverbial bogeyman for employers in California. Despite having only a one-year look-back period, PAGA claims commonly inflate plaintiff’s demands and judicial decisions to a punitive degree that decimates an employer’s incentive to maintain a business in California. This statute, among other factors, has served to motivate a mass exodus of businesses fleeing to other, more business-friendly states. While PAGA has withstood many challenges and attempted reforms over the years, there is ...

Effective January 1, 2022, the California Department of Industrial Relations issued a new compensation threshold for exempt computer software employees, reflecting an increase of 5.3% from last year. 

To qualify for the overtime exemption, computer software employees must be paid a salary of at least $104,149.81 annually ($8,679.16 monthly), or an hourly wage of at least $50.00. In addition, a computer software employee must also meet the duties test set forth in California Labor Code Section 515.5, which are also included in all Wage Orders except Orders 14 and 16. 

More ...

The concept of “presence” for jurisdictional purposes has evolved with the widespread use of websites, social media and other digital platforms. A company or individual may have no physical presence in a forum, but may nevertheless be subject to personal jurisdiction there as a consequence of its activities on these digital platforms.

Importantly, general jurisdiction does not necessarily follow from the defendant’s maintenance and use of an “interactive” website. Thus, “[t]he level of interactivity of a nonresident defendant’s website provides limited help ...

Citing the Omicron variant as a concern, the California Department of Public Health (CDPH) announced that it is requiring masks to be worn in all indoor public settings, irrespective of vaccine status, for the next four weeks (December 15, 2021 through January 15, 2022). Here is a link to the CA Department of Public Health's updated guidance (as of December 13, 2021) which reflect the latest masking state order.  The order specifies that masks must be worn in all California indoor public settings, irrespective of vaccine status, for the next four weeks (December 15, 2021 through January ...

Enacted in 2004, California’s Private Attorneys General Act (“PAGA”) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. Although only 25% of the amount recovered can be retained by the aggrieved employees with 75% going to the Labor and Workforce Development Agency, PAGA has become a tool commonly used by plaintiffs to attempt to inflate even minor claims beyond reasonable value.  Although the Legislature has made minor changes to the law over the years ...

For much of the COVID-19 pandemic, employers have been frustrated by the lack of notice regarding important mandates issues by different public health officials at all levels of state and local government. Senate Bill 336 is designed to make obtaining current information a little easier. 

With the enactment of SB 336, if either the State Department of Public Health or a local health officer issues an order or mandatory guidance related to COVID-19, the respective agency must do the following:

(1) Publish on their internet website the order or mandatory guidance and the date it takes ...

Senate Bill 606, which becomes effective on January 1, 2022, strengthens Cal/OSHA’s enforcement powers by creating two new categories of Cal/OSHA violations: “enterprise-wide” and “egregious”. A finding of an enterprise-wide violation may result in increased fines and penalties and requirements for abatement across multiple employer worksites, while an egregious violation permits increased fines and penalties per employee, per violation in certain circumstances. The new law also highlights the importance of compliant written health and safety policies.

Since the turn of the century, the judicial and legislative branches in California have added barrier after barrier to employers who have consciously sought arbitration; an oft-stated “preferred” method of resolution. The most draconian of these barriers became effective on January 1, 2020, with the enactment of Code of Civil Procedure § 1281.97 et seq.  These statutes provide that if an employer fails to timely pay the fees for the arbitration, the employee would be entitled to either withdraw the claim from the arbitration and proceed in court or otherwise compel arbitration ...

On January 1, 2022, as a result of Assembly Bill 1033, leave under the California Family Rights Act (CFRA) will be expanded to provide employees with up to twelve weeks of job-protected leave to provide care to a parent-in-law with a serious medical condition.  The CFRA previously only allowed for leave for an employee to care for a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner who has a serious health condition.

AB 1033 also makes changes to the Department of Fair Employment and Housing’s (DFEH’s) small employer family leave mediation pilot ...

On December 1, 2021, the U.S. Food and Drug Administration (“FDA”) issued a final rule establishing the Laboratory Accreditation for Analyses of Food (“LAAF”) program.

FDA will utilize the LAAF program to recognize accreditation bodies that will accredit food testing laboratories to specified standards. The final rule outlines eligibility requirements for both accreditation bodies and laboratory facilities. The LAAF program will mark a major shift in food testing, which is currently handled by private laboratories with limited government oversight.

After the LAAF ...

Senate Bill 807, which becomes effective January 1, 2022, will extend the period in which employers must retain personnel records for applicants and employees from 2 years to 4 years from the date the records were created or received, or the date the employment action was taken. 

In the event that a complaint with the Department of Fair Employment and Housing (“DFEH”) has been filed against an employer, the employer must retain any related personnel records until the employer has been notified that the action has been fully resolved, or the first date after the period for filing a ...

Senate Bill 657, a new law which becomes effective on January 1, 2022, in recognition of the prevalence of remote workers during the COVID-19 pandemic, permits employers to email required employment postings to employees. However, the law specifies that such email distribution “shall not alter the employer’s obligation to physically display the required posting.” Thus, notices requiring posting must still be physically displayed in the workplace, in a conspicuous and easily accessible location, such as an employee lunchroom or bulletin board.

Although SB 657 does not ...

On January 1, 2022, Senate Bill 62, the Garment Worker Protection Act, will become effective, making California the first state to ban piece rate pay for garment workers. SB 62 prohibits any “employee engaged in the performance of garment manufacturing” from being “paid by the piece or unit, or by the piece rate.” The law creates a compensatory damages penalty of $200 per employee against a garment manufacturer or contractor, payable to the employee, for each pay period in which each employee is paid by the piece rate. “Garment manufacturing” is defined to include sewing ...

In early November the Centers for Medicare and Medicaid Services (CMS) announced that it would be requiring applicable healthcare facilities to have a policy in place ensuring that eligible staff receive their first dose of a COVID-19 vaccine series by December 5, 2021 and to have completed the series by January 4, 2022. The failure to comply with the requirement would place an organization’s Medicare funding in jeopardy. On Tuesday, November 30, 2021, Judge Terry A. Doughty, a United States District Court Judge sitting in Louisiana, issued an injunction stopping enforcement of ...

On November 15, 2021, a Los Angeles City Council ordinance aiming to drastically reduce single-serve plastic utensils within the city went into effect.

Restaurants with more than 26 employees are required to remove all single-use disposable food-ware dispensers from common areas. Additionally, these restaurants are required to stop including plastic utensils and napkins with takeout orders or for dine-in meals unless customers specifically ask for them. If restaurants use an online ordering platform or third-party food delivery service, they are required to require ...

As part of the larger trend of invasion of privacy claims asserted by employees or consumers against businesses, several states have recently passed legislation that sets forth requirements for the collection, storing and dissemination of biometric information such as fingerprints, voice recordings and even keystroke patterns. See, e.g., California Civil Code Sections 1798.100, 1798.140(b). Similar statutes have been enacted in Illinois, Washington and New York.

As claims arising from the collection and disclosure of biometric information proliferate, businesses faced ...

COVID-19 has had a unique and continued impact on health and safety requirements in the workplace.  As a result, laws are being revised to catch up to the current work climate. Assembly Bill 654, which amends California Labor Code sections 6325 and 6409.6, is one such law. The amendments to these two statutes which initially established California’s COVID-19 notice and reporting requirements went into effect on October 5, 2021 and the statutes themselves shall remain in effect only until January 1, 2023.

What Does AB 654 Do?

Amendment to Labor Code § 6325

As a minor amendment to this ...

A federal judge in the Southern District of New York dismissed a fraud and misrepresentation action against Bimbo Bakeries USA, Inc., a food company whose brands include Sara Lee, Brownberry, and Entenmann's. Plaintiff Monica Boswell brought an action against Bimbo, alleging that the company violated several New York consumer protection statutes by fraudulently advertising one of its products as an “All Butter Loaf Cake” when, in reality, the cake includes other ingredients in addition to butter, such as soybean oil and artificial flavors. 

Bimbo filed a motion to dismiss ...

Less than one week into LA’s SafePass proof of vaccine requirements for businesses went into effect, the Los Angeles City Council (the “Council”) voted 10-0 to remove malls and shopping centers as covered businesses. Mall operators have pointed to the difficult of enforcing the ordinance because malls and shopping centers have so many different points of entry. It remains unclear when the revisions to the ordinance will go into effect. Malls and shopping centers remain covered businesses under the ordinance until the language is formally changed, but the ordinance is not ...

“It is the intent of the Legislature to afford all Californians, regardless of whether they have disabilities, with protections to ensure equal pay and equal treatment in the workplace.” These are the closing words of the preface to Senate Bill 639; a noble goal. However, the good intentions paving the way for this new law – equalizing the monetary playing field for employees with disabilities – may result in more harm than good for some of those very workers.

Before SB 639 was passed, employers could apply to the Industrial Welfare Commission for a special license, renewable ...

On November 8, 2021, SafePassLA officially went into effect. The Los Angeles City ordinance requires patrons of covered locations to demonstrate proof of full vaccination against COVID-19 before entering indoor spaces. Specifically, covered locations include:

• The indoor portions of all establishments where food or beverages are served, including but not limited to, restaurants, bars, fast-food establishments, coffee shops, tasting rooms, cafeterias, food courts, breweries, wineries, distilleries, banquet halls, and hotel ballrooms;
•  Gyms and fitness venues ...

In 2013 the California Legislature passed Assembly Bill 1386, which amended Labor Code section 98.2, giving the Labor Commissioner additional means to collect wages and penalties on behalf of workers. Labor Code section 98.2 was modified so that any amount due under a final order by the Labor Commissioner permits the Labor Commissioner to record a Certificate of Lien against the employer’s real property.

Fast forward to September 2021 and the passage of Senate Bill 572.  This bill adds section 90.8 to the Labor Code, which becomes effective January 1, 2022.  This statute will allow ...

This weekend a federal court in Louisiana issued a temporary stay effectively stopping enforcement of the Occupational Safety and Health Administration’s Emergency Temporary Standard requiring vaccination or weekly testing for all employers with 100 or more employees except for certain healthcare facilities and federal contractors. Following the announcement of the ETS by OSHA last week, at least 27 states filed lawsuits to challenge the rules. The Fifth Circuit Court of Appeals sitting in New Orleans issued the stay on the basis that there are “grave statutory and ...

At a city council meeting which began on November 3, 2021, and ended on November 4, 2021, the West Hollywood City Council voted to increase the minimum wage for hourly workers in West Hollywood.  In response to significant pressure from local businesses, the council made last minute changes to the ordinance to require a phased-in approach for some businesses.  Specifically, large businesses with 50 or more employees will be required to raise the minimum wage from the current $14.00 per hour to $15.50 on January 1, 2022, with further increases scheduled for July 1, 2022 at $16.50, January ...

On November 4, 2021, President Biden announced rules requiring COVID-19 vaccinations or weekly testing for companies with 100 or more employees.  These requirements will reach two-thirds of all private-sector workers in the United States.

The U.S. Department of Labor’s Occupational Safety and Health Administration’s (“OSHA’s”) Emergency Temporary Standard (“ETS”) will be officially published in the Federal Register on November 5, 2021, but an unpublished version of the 490-page document is available now. The ETS applies to all employers with a total of 100 or ...

The Federal Trade Commission (“FTC”) continued a flurry of activity to put companies on notice of future enforcement activities and safeguard consumer financial information. All businesses that advertise to consumers and that have an online presence should be aware of the FTC’s initiatives.

False Money-Making Claims

On October 26, 2021, the FTC sent a Notice of Penalty Offenses Containing Money-Making Opportunities and Endorsements and Testimonials (the “Notice”) to over 1,100 companies. These companies encompass a wide variety of industries and cover ...

On October 22, 2021, the Court of Appeal for the Ninth Circuit issued an unpublished opinion affirming dismissal of consumer false advertising claims against Nestlé’s Arrowhead brand water based on the mountain image at the front of the Arrowhead label. 

 The plaintiff argued that she believed the mountain printed on the front of the Arrowhead label to be "Arrowhead Mountain," and on the basis of that belief, determined that "NESTLÉ Product was [sourced exclusively] from the springs in the arrowhead mountain."

The Court rejected this agreement and found that there was not ...

A federal judge earlier this month dismissed a misrepresentation lawsuit against Subway Restaurants, Inc. and multiple affiliates concerning the sandwich maker’s claims regarding its tuna. Plaintiffs Karen Dhanowa and Nilima Amin filed a putative class action complaint in the Northern District of California alleging that Subway committed fraud and violated several California consumer statutes by claiming, among other things, that its tuna fish products were “100% tuna” and contained “100% skipjack and yellowtail tuna.” Notably, the first amended complaint ...

On September 30, 2021, the U.S. Department of Health and Human Services (“HHS”) Office of Civil Rights issued guidance to help the public and employers understand what privacy rules apply to disclosures and requests for information about whether a person has received a COVID-19 vaccine.

The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) has a Privacy Rule that regulates covered entities, including health plans, health care clearinghouses and health care providers. According to HHS, “The HIPAA Privacy Rule establishes national standards to ...

On October 5, 2021, Governor Newsom approved AB-286, which adds further regulations for food delivery platforms. The law will take effect on January 1, 2022. Last year, California passed the Fair Food Delivery Act of 2020 (AB-2149), which prohibits food delivery platforms from arranging for the delivery of food delivery orders without the express authorization of the food facilities, and which went into effect on January 1, 2021.

This bill makes it unlawful for a food delivery platform to charge a customer any purchase price for food or beverage that is higher than the price posted on ...

On October 13, 2021, the Federal Trade Commission (“FTC”) circulated a Notice of Penalty Offenses (“Notice”) to over 700 companies. These companies included as recipients of the Notice are large companies, advertising agencies and consumer product companies. 

The Notice places the companies on notice that they could incur civil penalties of up to $43,792 per violation if they use endorsements in ways that are precluded by the FTC’s prior administrative cases.

The FTC’s vote to authorize the Notice and its wide distribution was unanimous.

The Notice states that ...

On October 13, 2021, the U.S. Food and Drug Administration (“FDA”) released new voluntary guidance aimed at reducing average daily sodium intake by 12 percent over the next 2.5 years. The guidance sets voluntary target mean sodium concentrations and upper bound sodium concentrations for 163 food categories, including prepared foods, cheeses, sauces, frozen meals and baby food.

The FDA stated that the guidance “is intended to provide measurable voluntary short-term (2.5-year) goals for sodium content in commercially processed, packaged and prepared foods to reduce ...

On October 8, 2021, Governor Newsom approved three restaurant relief measures. These measures will affect outdoor dining and the ABC license process.  All three measures received bipartisan support and were supported by restaurant advocacy groups.

AB 61: Business Pandemic Relief

AB 61 authorizes the California Department of Alcoholic Beverage Control (“ABC”) to permit restaurants to serve alcohol in an expanded license area. The bill would also authorize the ABC to extend the period of time during which the COVID-19 permit is valid beyond 365 days if the licensee has applied ...

Construction defect cases often involve damage claims beyond simply the cost to repair the allegedly defective unit or component. These consequential damages may include damages for loss of use, expenses for mitigation and even attorney fees. For this reason, builders, suppliers, contractors and subcontractors who are faced with such claims should carefully review their insurance coverages, especially their CGL policies.

At the threshold, a defendant seeking coverage under its CGL policy in connection with a construction defect claim must satisfy the policy’s ...

Today, October 7, 2021, Los Angeles County Public Health Officer Order’s vaccine requirements go into effect. These requirements were first announced as an executive order of the Public Health Officer and were ratified by the Los Angeles County Board of Supervisors on September 15, 2021.

Under these requirements, proof of vaccination or a negative test result will be required to enter outdoor mega-events, and proof of at least one dose of the COVID-19 vaccine will be required to enter or work in indoor portions of bars, lounges, nightclubs, breweries, wineries and distilleries in ...

On Wednesday, October 6, 2021, the Los Angeles City Council voted 11-2 to approve a new ordinance that requires proof of a COVID-19 vaccination to enter indoor restaurants, shopping centers, movie theaters, hair and nail salons, and a wide variety of other indoor venues. Grocery stores and pharmacies are not included in the ordinance. If religious or medical exemptions are given to an individual, proof of a negative COVID-19 test taken within 72 hours is needed for the individual to enter an indoor space. The ordinance will go into effect on November 4, 2021.

Because the ordinance ...

On September 20, 2021, the Court of Appeals for the Ninth Circuit reversed Grubhub, Inc.’s lower court victory in a class action case involving the alleged misclassification of a former driver. The driver claimed he was misclassified as an independent contractor and asserted claims for minimum wage, overtime and expense reimbursement. The lower court denied class certification and entered a judgment in favor of Grubhub in February 2018. In so doing, the court applied the multi-factor Borello test to assess whether the driver qualified as an independent contractor. The judge ...

On September 29, 2021, the Los Angeles City Council debated a sweeping proof-of-vaccine requirement, with most Councilmembers indicating support. The ordinance will likely be passed upon its second reading next Tuesday.

The ordinance would require customers to show proof of full COVID-19 vaccination status to enter a wide variety of public spaces, including restaurants, coffee shops, gyms and fitness venues, movie theaters, shopping malls, concert venues and personal care establishments.

The City’s proposed rules would expand Los Angeles County’s existing ...

Q: I have a large judgment against a wiley debtor. While I was able to execute on some of his bank accounts, the road to his other assets, which I know he owns or controls, has gone cold. A friend of mine told me I should ask my lawyer to get a “receiver in aid of execution” to collect the judgment. How hard is it to get such a receiver?

A: It just got a lot harder. Prior to the adoption in 1982 of California’s Enforcement of Judgments Law (C.C.P. § 680.010 et. seq.), California Code of Civil Procedure (C.C.P.) § 564(4) provided the basis for appointing a receiver in aid of execution. It ...

Data breaches by large companies have been in the news for some time. Over the last several years several companies, including Marriott, Yahoo and Volkswagon, have been victimized by hackers who have broken into a company’s computer network. In some cases, the hackers have put the company’s confidential information on the internet. In other cases, the hackers have held the company’s information hostage through ransomware.

While companies are rightly concerned about the security of their own networks, there is another risk. Recent court cases are testing the liability of ...

Two restaurant relief measures have cleared the California State Senate and Assembly with bi-partisan support. The bills were both enrolled on September 13, 2021, and now await Governor Newsom’s signature.

AB-61: Business Pandemic Relief

AB-61 authorizes the California Department of Alcoholic Beverage Control (“ABC”) to permit restaurants to serve alcohol in an expanded license area. The bill would also authorize the ABC to extend the period of time during which the COVID-19 permit is valid beyond 365 days if the licensee has applied for permanent expansion of their ...

On September 2, 2021, the U.S. Department of Agriculture’s Food Safety and Inspection Service (“FSIS”) published an advanced notice of proposed rulemaking to solicit comments from the public regarding the labeling of meat and poultry products made using cultured cells derived from animals. FSIS stated that it would use those comments to make further regulatory requirements.

FSIS also asked for economic data and consumer research to help increase its understanding of the animal cell culture technology industry and related issues regarding labeling and consumer ...

In a year of tough decisions for California employers, the Ninth Circuit just issued another mixed bag of legal decisions to navigate, this time regarding the enforceability of mandatory arbitration agreements.

CA Labor Code § 432.6 and Chamber of Commerce of the United States v. Bonta

In October, 2019, California passed Assembly Bill 51, which became codified as Labor Code § 432.6, effective January 1, 2020. This law provided that employers could not require employees to sign a mandatory arbitration agreement as a condition of employment. In addition, it created civil and criminal ...

On September 9, 2021, the Small Business Administration (“SBA”) announced several changes to its Economic Injury Disaster Loan (“EIDL”) Program. 

The changes include:

• Increasing the COVID EIDL Cap to $2M. The SBA will lift the COVID EIDL cap from $500,000 to $2 million. Loan funds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment and paying debt.
• Deferred Payment Period. Small business owners will not have to begin COVID EIDL repayment until two years after loan origination. The SBA stated that this change was ...

On September 15, 2021, the Los Angeles County Board of Supervisors announced that proof of a COVID-19 vaccination will be required at indoor bars, wineries, breweries, nightclubs and lounges in Los Angeles County. This requirement will be announced in a Department of Public Health Order.

The order will recommend, but not require, vaccine verification for employees and customers in indoor portions of restaurants.

The Los Angeles County mandate will also apply to employees of covered establishments and require that both employees and customers have at least one vaccine dose by ...

On September 14, 2021, the Federal Trade Commission (“FTC”) voted 3-2 to approve new compulsory process resolutions in eight areas.

Compulsory process refers to the issuance of demands for documents and testimony, through the use of civil investigative demands and subpoenas. The FTC Act authorizes the FTC to use compulsory process in its investigations, which requires the recipient to produce information, and these orders are enforceable by courts.

According to the press release, the “resolutions announced today will broaden the ability for FTC investigators and ...

On September 10, 2021, the City of West Hollywood issued an Emergency Executive Order (the “Order”) implementing vaccine verification requirements for some businesses throughout the City. The West Hollywood City Council first discussed vaccine mandates for businesses in a July 21, 2021 meeting.

The Order mandates restaurants, bars, nightclubs, health and fitness facilities, and personal care establishments to require all patrons ages 18 and older to show proof that they are fully vaccinated before entering any indoor portions of a facility. Additionally, business ...

On September 9, 2021, President Biden signed two Executive Orders imposing sweeping new vaccine mandates on federal workers and contractors. This new mandate represents a shift in the White House’s policy on vaccinations, which had previously offered an alternative to those who wish to remain unvaccinated by allowing those individuals to wear masks while on federal property as long as they submitted to regular screening for COVID-19.

All federal employees, contractors and subcontractors employed by the federal government shall be required to provide proof of vaccination ...

On September 1, 2021, the California State Assembly joined the California State Senate in passing Assembly Bill 286, which will regulate food delivery platforms throughout the state. The bill passed with bipartisan support in both chambers, with a 55-8 vote in the Assembly on September 1, and a 27-8 vote in the Senate on August 23, 2021. The bill was introduced in January 2021 and now awaits Governor Newsom’s signature.

There are three main aspects of the bill: (1) it prohibits third-party platforms from charging more than the price set by the food facility; (2) it makes it unlawful for ...

On August 31, 2021, the Court of Appeals for the Ninth Circuit issued an unpublished order revoking class certification of a consumer class in a Coca-Cola labeling case. The plaintiffs alleged that Coke’s advertising slogan of “no artificial flavors, no preservatives added since 1886” was misleading because Coke contains phosphoric acid.

This decision reversed a class certification order from a California federal judge. The court held that the plaintiffs lacked standing to pursue injunctive relief because they had failed to demonstrate harm and thus had not adequately ...

A recent case from the 5^th U.S. Circuit Court of Appeals breaks new ground on the question of whether a commercial general liability policy provides coverage for damages arising from a data breach caused by a third-party hacker. Landry’s Incorporated v. Insurance Company of the State of Pennsylvania, 4 F. 4^th 366 (5^th Cir. 2021). In brief, the court in Landry’s held that there was coverage for a data breach where the insured was sued by a credit card processing company for breach of contract.

Landry’s operated retail properties including restaurants, hotels and casinos ...

Feeling entitled, or deserving or just plain covetous? You have discovered that you are encroaching on your neighbor's property. In California, two inconsistent doctrines can apply to allow you to continue using your neighbor's property, if the encroaching use has been long enough.

Prescriptive easement doctrine is for those guilty of intentionally wanting to take their neighbor's land without regard to carelessness. To win a prescriptive easement claim, you must prove continuous and uninterrupted, adverse and hostile, open and notorious use over the real property of a ...

On August 17, 2021, the Los Angeles County Department of Public Health announced a mask mandate for large outdoor mega-events of more than 10,000 people. This is the first outdoor mask mandate since the County began its reopening attempt on June 15, 2021.

All attendees at those events must now wear face masks at all times, except when actively eating or drinking. Event operators are required to prominently include information about the mask mandate throughout the event and on communications to guests. The County also has a recommendation (but not a mandate) that all attendees at ...

On August 4, 2021, Democratic Senators Richard Blumenthal, Sheldon Whitehouse and Ed Markey; and Democratic Representatives Frank Pallone, Jr. and Rosa DeLauro introduced the Food Labeling Modernization Act (“FLMA”) in both houses of Congress. Versions of this bill were introduced in 2015 and 2018, but were unsuccessful.

The press release announcing the new legislation touted it as “an effort to help consumers select healthy products.” The legislation would direct the Secretary of Health and Human Services (“HHS”) to establish a single, standard ...

On Wednesday, August 11, 2021, the Los Angeles City Council approved a motion to require people to have at least one dose of the COVID-10 vaccine before being admitted to public spaces, including restaurants, entertainment venues and retail stores. 

The motion states: “the City Council instruct[s] the City Attorney to prepare and present an ordinance that would require eligible individuals to have received at least one dose of vaccination to enter indoor spaces, including but not limited to, restaurants, bars, retail establishments, fitness centers, spas and entertainment ...

While Congress has expressed bipartisan support for replenishing the depleted Restaurant Revitalization Fund (“RRF”), it has not been able to take action to do so. There are currently two bills pending to replenish the funds, and on August 7, 2021, a group of Senators attempted to add $48 billion to the RRF through a unanimous consent, which failed. The uncertain status of the RRF leaves hundreds of thousands of restaurants in limbo. This is particularly true of the approximately 3,000 priority applicants, who were approved for RRF grants and later notified that the SBA could ...

On July 29, 2021, the Small Business Administration (“SBA”) updated its guidance to address borrower and lender questions about the implementation of the Paycheck Protection Program (“PPP”).

The SBA announced that it was discontinuing use of the Loan Necessity Questionnaire (SBA Form 3509 or 3510) (the “Questionnaire”). The Questionnaire sought additional information for borrowers seeking loans of $2 million or more, including a liquidity assessment and business activity assessment.

Eighty-two organizations, including the National Restaurant ...

Keeping current on the frequent changes to COVID-19 business requirements can be very challenging. The return to indoor masking requirements on July 17, 2021, in Los Angeles County has been widely publicized. Even so, Los Angeles businesses may not be aware that the county is currently enforcing the indoor masking requirements through onsite inspections of county businesses. 

In fact, during the short period between July 17, 2021 and July 23, 2021, Los Angeles County reports that its Department of Public Health inspectors visited 1,013 restaurants, 9 bars, 222 food markets, 22 ...

On November 6, 2018, California voters passed Proposition 12. The law is set to go into effect on January 1, 2022. Among other things, the law “prohibits a business owner or operator from knowingly engaging in the sale within the state of shell eggs, liquid eggs, whole pork meat or whole veal meat, as defined, from animals housed in a cruel manner.”

The National Pork Producers Council and the American Farm Bureau Federation filed a district court action seeking declaratory and injunctive relief on the ground that California’s Proposition 12 ban on the sale of whole pork meat (no ...

Q: I know receivers were appointed in England before even the merger of courts of law and equity, but when were receivers first appointed in California?

A: It is hard to say when a receiver was first appointed in California, given records are not generally kept of superior court orders for long. However, the first reported appellate decision involving a receiver appears to be Von Schmidt et. al v. Huntington et. al., 1 Cal. 55, decided in the Court’s March 1850 term. The Supreme Court affirmed the lower court’s appointment of a receiver, in a corporate dissolution action, to ...

The Ninth Circuit last month upheld a trial court’s decision to dismiss a false advertising lawsuit against Trader Joe’s concerning the store’s labeling of its Manuka honey. The case, Moore et al. v. Trader Joe’s Co., Case No. 19-16618 (9th Cir.), centered around allegations that Trader Joe’s violated multiple states’ consumer protection laws by falsely labeling its Manuka honey as “100% New Zealand Manuka Honey” when, in reality, only about 57-62% of the honey is derived from Manuka nectar.

Manuka honey is created by bees that forage from the Manuka bush, a plant ...

On July 14, 2021, the Senate Health Committee approved Assembly Bill (“AB”) 61, which would provide regulatory flexibility to restaurants to expand outdoor dining. The bill now includes an urgency clause, meaning that it can be implemented immediately after it passes. The bill was first introduced on December 7, 2020. It now has 21 bipartisan co-authors.

According to a press release, “AB 61 would provide much-needed regulatory flexibility to restaurants, including temporarily waiving requirements for fully enclosed kitchen and service areas, extending existing ABC ...

On July 1, 2021, the Federal Trade Commission (“FTC”) issued its final rule related to “Made in USA” and other unqualified U.S.-origin claims on product labels. The effective date of the rule is August 13, 2021.

The rule comes almost one year after the FTC issued its Notice of Proposed Rulemaking (“Notice”) seeking public comments on the rule on July 16, 2020.

The FTC stated that it had received over 700 comments from the public in response to the Notice. According to the FTC: “Commenters generally supported the rule, stating it provided much-needed clarity and would ...

Since 2019, California employers have relied on Ferra v. Loews Hollywood Hotel, LLC, 40 Cal.App.5th 1239, for the proposition that only hourly wages would be used to calculate “premium pay” for meal or rest breaks under Labor Code section 226.7. In a serious blow to California employers, the California Supreme Court has reversed this ruling and held that non-discretionary bonus payments and commissions must be included in calculating these premium payments in the same manner as calculating for overtime pay. Adding insult to injury, the Court has held that its ruling will ...

On July 16, 2021, the Los Angeles County Department of Public Health (LACDP) issued a revised health order available here (Order) requiring masks for everyone, regardless of vaccination status, in all indoor public settings, venues, gatherings and businesses. Examples of such locations include offices, retail, restaurants, theaters, family entertainment centers, meetings, etc.

The Order also requires that individuals, businesses, venue operators or hosts of public indoor settings require all patrons to wear masks in all indoor settings, regardless of vaccination status ...

Beginning Saturday, July 17, 2021, at 11:59 P.M., Los Angeles County will once again require all residents to wear masks in indoor public spaces, regardless of their vaccination status. The requirement will be reimposed due to rising Los Angeles County COVID-19 cases and the spread of the highly infectious Delta variant.

Los Angeles County reported an average of 1,077 new cases daily during the 7-day period ending July 14, 2021, which is a 261% increase from the prior two-week period. An additional 1,537 cases were reported today, July 15th, representing an increase of over 80 ...

On July 15, 2021, Los Angeles County’s Department of Public Health (the “Department”) announced at a press conference that it would be issuing a new public health order requiring all residents, regardless of vaccination status, to wear masks in indoor public spaces. The order will go into effect at 11:59 pm on Saturday, July 17, 2021.   

On July 13, 2021, the Department announced a substantial increase of COVID-19 cases in Los Angeles County, with 1,1103 new cases—an increase of 500% in one month.

On June 28, 2021, the Department issued a recommendation that all residents remain ...

On June 30, 2021, the House Committee on Appropriations (the “Committee”) issued a report accompanying a bill making appropriations for the U.S. Department of Agriculture, Food and Drug Administration (“FDA”), and related agencies for fiscal year 2022.

The report includes the Committee’s review and direction as to the FDA’s work. While most of this guidance was focused on drug-related regulation, the Committee offered some specific directives on food and beverage regulation that may guide the FDA’s future work. The topics of interest in the report related to the ...

Q: I have handled a number of health and safety receiverships. A city I have worked with before asked me to look at a property and prepare a proposed remediation plan, so they could have me appointed receiver under Health and Safety Code §17980.7(c). The court denied the city’s motion, saying it knew where the property was located and the cost of remediation was not worth it, given the property’s value. Can the court do that?

A: No. Under Health and Safety Code § 17980.7(c) there are only two requirements for the appointment of a receiver. First, “the court shall consider whether ...

On July 14, 2021, the Small Business Administration (“SBA”) will officially close its Restaurant Revitalization Fund (“RRF”) portal. This move raises questions about whether the RRF funds will be replenished, despite pending congressional action.

The SBA stopped processing fund applications on May 24, 2021, after a huge influx of applications, seeking nearly double the funds available.

As of June 30, 2021, the SBA reported that the RRF program received more than 278,000 submitted eligible applications representing over $72.2 billion in requested funds, and ...

On June 29, 2021, the U.S. Food and Drug Administration’s (“FDA”) Center for Food Safety and Applied Nutrition and Office of Food Policy and Response released a list of draft and final guidance topics that are a priority for the FDA Foods Program to complete during the next 12 months. 

The FDA anticipates publishing guidance for many of these documents by June 2022. The FDA stated that the agency “is taking this action to provide stakeholders increased transparency and additional insights into the foods program priorities. Guidance documents represent the FDA’s current ...

The Equal Employment Opportunity Commission (EEOC) has issued updated guidance regarding providing incentives to employees to encourage COVID-19 vaccination, examining various scenarios under the Americans with Disabilities Act (ADA) and the Genetic Information Discrimination Act of 2008 (GINA). The updated guidance can be found here under items K.16 - K.21.

The guidance confirms that under the ADA, as long as the incentive is not so substantial as to be coercive, an employer may provide an incentive (which may include both rewards and punishments) to employees for ...

The much anticipated Restaurant Revitalization Fund (RRF) was deluged with applicants. According to Restaurant Dive, more than 362,000 applications were received in the first three weeks of the program for a total of $75 billion in funding. The SBA has since closed its portal to new applicants. The portal website states: “After an overwhelming response to the Restaurant Revitalization Fund, the application portal is now closed for new applications.”

On June 8, 2021, a bipartisan group of Senators and U.S. Representatives introduced the Restaurant Revitalization Fund ...

On June 3, 2021, AB-257, the Fast Food Accountability and Standards Recovery Act (the “FAST Act”) was defeated in the California Assembly, coming up three votes short of the 41 votes needed. 

The FAST Act would have established a Fast Food Sector Council (the “Council”), comprised of 11 members appointed by the Governor, Speaker of the Assembly and Senate Rules Committee. Under the proposed bill, that Council would have been tasked with conducting a full review of the adequacy of fast food restaurant health safety and employment standards, and establishing industry-wide ...

On June 24, 2021, the Federal Trade Commission (“FTC”) announced that it would be holding the first of a series of open meetings. Members of the public are invited to listen to the FTC’s discussion and submit public comment.

The initial agenda includes the following:

• Made in the USA Rule: The FTC will vote on whether to finalize the Made in the USA Rule.
• Section 18 Rulemaking Procedures: The FTC will vote on whether to streamline the procedures for Section 18 rules prohibiting unfair or deceptive acts or practices.
• “Statement of Enforcement Principles Regarding ‘Unfair ...

On June 23, 2021, the U.S. Department of Labor published a Notice of Proposed Rulemaking to limit the amount of non-tip producing work that a tipped employee can perform when an employer is taking a tip credit. 

According to the DOL, the proposed rule “clarifies when an employee is working in a tipped occupation and when a worker has performed such a substantial amount of non-tipped labor that an employer can no longer take a tip credit and must pay the full federal minimum wage to the worker.” 

Under the proposed rule, if a tipped employee spends either more than 20 percent of their ...

Earlier this month, the Ninth Circuit reversed approval of a class action settlement, finding several indications that the proposed settlement was the result of collusion between the parties and did not adequately serve the class. The case, Briseño et al. v. ConAgra Foods Inc., Case No. 19-56297 (9th Cir.), originally filed in 2011, centers around allegations that defendant ConAgra Food Inc., then-owner of Wesson Oil, falsely advertised its oil as “100% Natural” when in fact the oil contained ingredients made from GMOs.

After several years of litigation, plaintiffs ...

On June 17, 2021, the California Occupational Safety & Health Standards Board (the Cal/OSHA Board) voted to approve a set of new modified COVID-19-related workplace emergency regulations, found here. The new modified regulations will need to be approved within ten days by the state Office of Administrative Law, which is expected to approve the rules. Governor Newsom has also indicated that he may approve the rules immediately. 

These regulations replace more stringent regulations that were inconsistent with the latest guidance issued by the Centers for Disease Control and ...

On June 11, 2021, the FDA issued a final rule to amend the standard of identity for yogurt. The rule will become effective on July 12, 2021. 

A standard of identity describes in detail what a food product must contain, how it must be proportioned and in some cases how it must be manufactured. The FDA has more than 280 standards for a wide variety of food products.  As part of the FDA’s Nutrition Innovation Strategy, the agency has been considering standards of identity and particularly looking to revoke or update standards when they are inconsistent with modern manufacturing processes or ...

On June 4, 2021, a panel of judges from the Ninth Circuit Court of Appeals affirmed the dismissal of consumer poultry labeling claims against Trader Joe’s on the ground that those claims were federally preempted. The consumer claims alleged that Trader Joe’s labels on poultry were misleading under California law because they had different percentages of retained water than was displayed on their labels. 

Poultry labeling, including a retained water data collection process and label production, are regulated by the federal Poultry Products Inspection Act (“PPIA”) and the ...

On Tuesday, June 8, 2021, the Los Angeles County Board of Supervisors approved a motion to establish permanent guidelines for outdoor dining and move from the temporary pandemic authorizations to a long-term plan.

The motion requested several L.A. County agencies to work together to establish permanent Countywide guidelines for expanded options for outdoor dining spaces. This includes new guidelines for public sidewalks, alleys, and private on-site and off-site parking facilities.

The Board also asked those agencies to develop a plan to transition all restaurants that have ...

On June 9, 2021, the California Department of Public Health announced a new face coverings guidance that will go into effect statewide on June 15, 2021. In addition, Governor Newsom’s office announced that on June 15, 2021, California would be fully reopen with no capacity limits or distancing required by the state. The county-by-county color tier system will also be eliminated. However, individual county health departments may continue to impose restrictions under local public health orders.

Under the State’s new guidance, fully vaccinated persons are not required to wear ...

On June 7, 2021, the FDA released its Fiscal Year 2022 budget request, outlining key investments for food safety. The request details how the FDA plans to use funds in FY 2022 to support food safety and nutrition. The budget provides increases to core food safety programs and outlines emerging issues of concern for the agency.

The agency’s FY 2022 Budget provides $1.6 billion in budget authority for food safety, an increase of $134 million from the previous year.

The agency’s press release states: “[o]f the increase of $134 million for food safety activities, $45 million is for ...

On June 3, 2021, the California Occupational Safety & Health Standards Board approved new modified COVID-19-related emergency regulations. The new modified regulations, which are found here, will need to be approved by the state Office of Administrative Law within ten days. The OAL is expected to approve the rules.

When approved, the new regulations will become effective on June 15, 2021, the same day on which Governor Newsom announced California would reopen. These regulations may be further refined in the coming weeks to take into account changes in circumstances, especially as ...

On June 3, 2021, California Governor Gavin Newsom announced the extension of some pandemic alcohol measures designed to help restaurants and bars. The press release states: “The Administration today extended relief measures that permit restaurants and bars to continue to benefit from their investments to expand outdoor operations in areas such as sidewalks and parking lots, and to continue the sale of to-go alcoholic beverages with food deliveries, among other successful pandemic adaptations. In addition, the Administration is urging local governments to facilitate ...

The United States Court of Appeals (9th Circuit) recently upheld California’s CalSavers Retirement Savings Program (CalSavers), which provides retirement savings accounts to employees without employer retirement benefit plans. The Howard Jarvis Taxpayers Association sued to challenge the law establishing the CalSavers program arguing that it was superseded by federal retirement law, specifically the federal Employee Retirement Income Security Act of 1974 (ERISA). However, the U.S. Appeals court upheld the CalSavers program holding that it was not preempted by ERISA.

A proposed class action settlement pending in the District Court of Colorado involving Grubhub, Inc. has been called into question by would-be intervenors from a similar action against Grubhub pending in the Northern District of Illinois. The Colorado case, CO Craft LLC dba Freshcraft v. GrubHub Inc., Case No. 1:20-cv-01327 (D. Colo) was filed by plaintiff Freshcraft on May 11, 2020, alleging a single cause of action against Grubhub for violation of the Lanham Act. Freshcraft alleges that Grubhub falsely advertised on its platform that certain restaurants not partnered with ...

On May 6, 2021, the FDA issued a procedural notice on the preliminary quantitative consumer research it plans to conduct on symbols that could be used in the future to convey the nutrient content claim “healthy.”

This research is part of the FDA’s Nutrition Innovation Strategy, which seeks to reduce the burden of nutrition-related chronic diseases and to modernize claims. By using a symbol for a nutrient claim, the goal would be for consumers to have a quick signal about what benefits a food or beverage they choose might have.

As part of its efforts to promote public health, FDA ...

This article provides a summary of a presentation Peter Selvin gave on April 22, 2021 to the Litigation Counsel of America. 

PART 1: Business Interruption: COVID-19

COVID-19 has impacted nearly every aspect of business and insurance is no exception. While infection rates continue to fall, there is a rise in business interruption insurance claims and litigation. This article highlights some of the emerging themes and notable developments in COVID-related insurance litigation claims.

In March 2021, the Los Angeles Lakers filed a COVID-19 business interruption lawsuit against ...

On May 13, 2021, California Governor Gavin Newsom announced an expansion of the state’s COVID-19 Small Business Relief Grant program from $2.5 billion to $4 billion. The expansion makes California’s business relief grants program the largest in the country.

To date, 198,000 businesses have received grants under the program, for a total of $475,001,244. While the application portal is currently closed, it is expected to reopen after the new grant's funds have been processed. The Governor’s office announced the following initiatives for businesses:

• Estimated $895 ...

Parties in another false advertising case surrounding the use of the term “natural” have filed for preliminary approval of a class action settlement. On May 7, 2021, the plaintiff in Megan Holve v. McCormick & Company, Inc., Case No. 6:16-cv-06702-FPG asked a Federal Judge in the Western District of New York to preliminarily approve the parties’ proposed class action settlement to resolve the nearly five-year-old litigation.

Originally filed back in October 2016, plaintiff Holve, purporting to act on her behalf as well as on behalf of both a nationwide class and New York ...

On May 17, 2021, California’s Secretary of Health and Human Services, Dr. Mark Ghaly, announced that California would begin following the U.S. Centers for Disease Control and Prevention (the “CDC”)’s new guidelines regarding the lifting of mask restrictions for fully vaccinated individuals on June 15, 2021. These new guidelines provide that those who are fully vaccinated against the COVID-19 virus no longer need to wear masks outdoors or in most indoor settings.

After serving as one of the major epicenters for the COVID-19 virus in the United States in the beginning of this ...

On May 12, 2021, the Los Angeles City Council (the “Council”) took the first step towards making the popular L.A. Al Fresco outdoor dining program permanent. The Council voted 14-0 to approve a motion that directs various city agencies to issue reports with recommendations on how to transition the program to permanent status.

The Council instructed the Bureau of Engineering and Los Angeles Department of Transportation to “report in 60 days with recommendations to revise the Sidewalk Dining Program and the People St. Program, as appropriate, to expeditiously transition all ...

On May 13, 2021, the U.S. Centers for Disease Control and Prevention (the “CDC”) issued new guidance lifting mask restrictions for fully vaccinated individuals. Under the new guidance, people who are fully vaccinated may stop wearing masks or maintaining social distance in most outdoor and indoor settings. 

The CDC’s summary of changes states that “fully vaccinated people no longer need to wear a mask or physically distance in any setting, except where required by federal, state, local, tribal, or territorial laws, rules, and regulations, including local business and ...

Our previous articles have summarized the Paycheck Protection Program (“PPP”) created under the Federal CARES Act: CARES Act: Paycheck Protection Program Loans, CARES Act: Loan Applications, CARES Act: Loan Forgiveness Applications and Consolidated Appropriations Act: Additional Paycheck Protection Program Loans.

This post provides information regarding California Assembly Bill No. 80 (the “Bill”), which conforms California tax law to Federal tax law on PPP loans.

The Bill received bi-partisan support, passing the California Assembly with a vote of 75-0 and ...

Employers know that the Consolidated Omnibus Budget Reconciliation Act (COBRA) provides an opportunity for group health plan continuation coverage to covered employees and their families upon the occurrence of a qualifying event, such as a termination of employment or a reduction in hours. The recently enacted American Rescue Plan Act of 2021 (ARP) provides COBRA limited premium subsidies and new enrollment rights to certain Assistance Eligible Individuals. An Assistance Eligible Individual would not be required to pay COBRA premiums from April 1, 2021 through September 30 ...

As technology has advanced, employers routinely rely on electronic timekeeping software to ensure accurate record keeping. Such software often includes a setting to round employees’ time (typically to the nearest quarter hour) and is implemented as a result of either deliberate company policy or through inadvertent default. Regardless, employers should review these policies and settings following the California Supreme Court’s recent decision in Donohue v. AMN Services, LLC.

In Donohue, the Court unequivocally held employers may no longer round an employee’s in and ...

In April 2021, the Federal Trade Commission (“FTC”) emphasized its commitment to protecting consumers from unsubstantiated claims of products advertised to prevent, treat or cure COVID-19. On April 29, 2021, the FTC announced an additional set of warning letters related to these types of claims. The FTC has now sent nearly 400 warning letters in ten sets to companies and individuals. According to the agency, “In the letters, the FTC states that one or more of the efficacy claims made by the marketers are unsubstantiated because they are not supported by scientific evidence ...

On Wednesday, May 5, 2021, the Los Angeles County Public Health Department (the “Department”) is expected to issue a new Public Health Officer order to officially move into the least restrictive “yellow tier” of California’s color-coded reopening system. The criteria for entering the yellow tier is less than 2% positivity and fewer than 1 daily new case per 100,000 county residents. The Order would be effective on Thursday, May 6, 2021.

On April 30, 2021, the Department made some modifications to the Public Health Order, lifting hours limitations on bars, breweries and ...

Since the inception of the pandemic, “ghost kitchens” – or shared commercial spaces which host multiple restaurant brands only serving food via delivery or takeout – have presented a surprising silver lining for both restaurateurs and commercial real estate owners alike. For commercial real estate owners, ghost kitchens present an invaluable opportunity to market real estate spaces that have otherwise lost value with the decline in brick and mortar retail. For restaurateurs, ghost kitchens provide significant savings on the rent and labor costs associated with a ...

California’s Department of Fair Employment and Housing (DFEH) has updated its COVID-19 vaccination guidance, replacing its prior guidance issued July 24, 2020.

The DFEH’s updated guidance, available here, permits employers to require employees to receive a vaccine approved by the Food and Drug Administration (FDA), subject to certain exceptions and requirements. 

Specifically, in instituting such a mandatory policy, an employer’s policies or practices cannot discriminate or harass employees or applicants based on a characteristic protected by the Fair Employment ...

During the first quarter of 2021, various federal bills were introduced which impact the food industry. This article provides a primer on some of these bills and their potential impact on the food industry.

The Food Allergy Safety, Treatment, Education and Research (FASTER) Act (S.578), introduced by Senator Tim Scott on March 3, 2021, later passed by both the Senate and House of Representatives, and signed into law by President Biden on April 26, 2021:

• The FASTER Act requires companies to declare the presence of sesame on food packaging labels by January 1, 2023 and was introduced and ...

On April 27, 2021, the Small Business Administration ("SBA") announced that the much-anticipated Restaurant Revitalization Fund would be opening on May 3, 2021 at 9 am PST/12 pm EST. Restaurant operators may register through the SBA’s RRF portal beginning on Friday, April 30 at 6 am PST/9 am EST.

The SBA will host two webinars on Tuesday, April 27 and Wednesday, April 28 covering the Restaurant Revitalization Fund program details and how to submit an application. The two webinars will cover the same content. Registration is available here. The webinars are limited to the first ...

On Monday, April 19, 2021, Los Angeles Mayor Eric Garcetti delivered his 2021 State of the City speech and announced several initiatives designed to assist restaurants. 

The proposals for restaurant relief included in Garcetti’s speech include:

• $25 million program to write Comeback Checks of $5,000 to 5,000 small businesses.
• A proposed ordinance to cut the time for alcohol permit approval for restaurants by 90% and to cut the cost of that permit by 70%.
• Allowing restaurants to defer city fees of $8,000 or more for a three-year period.
• Suspension of valet and off-site parking ...

Governor Newsom has signed into law Senate Bill 93, a state-wide right of recall, intended to assist California workers in sectors that have been especially hard hit by the COVID-19 pandemic. This new law, which is similar to earlier Los Angeles County and Los Angeles City COVID-19 ordinances, goes into effect immediately and will remain in effect through December 31, 2024. 

California’s new right of recall law applies to certain hotels, private clubs, event centers, airport hospitality operations and providers of janitorial, maintenance or security services to office, retail ...

On April 17, 2021, the Los Angeles Department of Public Health (“Department”) revised its protocol for restaurants to permit increased activities in light of the County’s Orange Tier reopening.

The changes include:

• Allowing restaurants to have live outdoor entertainment. Live entertainment operations are allowed outdoors only.  Performers must be at least 12 feet away from seated customer groups.
• Allowing restaurants to host private events when the restaurant is not operating for regular business. Private events are subject to a separate protocol and restaurants ...

On Saturday, April 17, 2021, the Small Business Administration (“SBA”) released its much-anticipated guidelines for the Restaurant Revitalization Fund.

On April 13, 2021, during a town hall with the Independent Restaurant Coalition, SBA associate administrator Patrick Kelley stated that the program was not robust enough to serve all eligible applicants and urged administrators to apply on the first day the program opens. He suggested that a demonstration of strong demand could lead to Congress opening additional funding for the program.

Eligible Entities

Eligible ...

On April 8, 2021, the Treasury Department and the Internal Revenue Service issued guidance regarding the temporary 100-percent deduction for food and beverage purchased from restaurants.

Beginning January 1, 2021, through December 31, 2022, businesses can deduct 100% of their food or beverage expenses paid to restaurants if the business owner (or an employee of the business) is present when food or beverages are provided, and as long as the expense is not lavish or extravagant under the circumstances.

The guidance defines eligible restaurants to include businesses that ...

The Ninth Circuit recently affirmed a district court decision dismissing a case for lack of standing, finding that an advocacy group must demonstrate that it affirmatively diverted resources to combat alleged false claims to maintain standing in a false advertising litigation.

The case, Friends of the Earth, et al. v. Sanderson Farms, Inc., Case No. 3:17-cv-03592 (N.D. Cal.), was originally filed by multiple advocacy groups in 2017 against Sanderson Farms, Inc., a poultry farming company.  Plaintiffs alleged that defendant violated both the California False Advertising Law and ...

On April 6, 2021, the U.S. Food and Drug Administration (“FDA”) announced agency actions to advance the safety of leafy greens.

First, the FDA announced that it was releasing a report of its investigation on the Fall 2020 outbreak of E. coli linked to the consumption of leafy greens. The report found that the outbreak, which caused 40 reported domestic illnesses, was linked via whole-genome sequencing (WGS) and geography to outbreaks traced back to the California growing region associated with the consumption of leafy greens in 2019 and 2018. The FDA investigated the outbreak ...

On April 6, 2021, California Governor Gavin Newsom announced a plan to lift all COVID-19 virus restrictions by June 15, 2021. The full reopening is contingent on both (1) sufficient vaccine supply to ensure that all Californians age 16 and over who wish to be inoculated are able to do so and (2) stable and low hospitalization rates. The full reopening would mean an official end to California’s color-coded tier system.

It remains unclear what restrictions may remain under the full reopening but Governor Newsom specified that some form of mask mandate will remain. The California ...

In some circumstances an insurer’s duty to settle may arise even in the absence of a demand by the claimant within policy. The recent case of Planet Bingo, LLC v. The Burlington Insurance Company, 2021 DJDAR 2510 (March 18, 2021) is the latest decision to address this point.

In Planet Bingo, the insured manufactured handheld gaming devices. Those devices were distributed in the U.K. by Leisure Electronic Limited. Leisure leased some of the Planet Bingo’s devices to Beacon Bingo, which operated a bingo hall in London.

In September 2008 there was a fire at Beacon’s bingo hall ...

Both Los Angeles and Orange County are now eligible to move from the Red Tier into the Orange Tier of COVID-19 reopening guidelines under the state’s Blueprint for a Safer Economy. 

On March 30, 2021, the Los Angeles County Public Health Department announced that while it satisfied the numbers requirement to move into the Orange Tier, it would wait until April 5 to permit businesses to operate at increased capacity.

On April 5, Los Angeles County will officially adopt Orange Tier reopening rules to the Public Health Officer Order. Under these new rules, the following changes will take ...

Parties in an added-sugar class action pending in the Northern District of California are taking another shot at obtaining preliminary approval of a settlement reached between the parties. The case, Stephen Hadley et al. v. Kellogg Sales Co., Case No. 5:16-cv-04955, originally filed in 2016, alleges that Kellogg violated several California and New York laws by marketing many of their cereals with deceptive health and wellness claims that mask the cereals’ high added sugar content.  Plaintiffs specifically target roughly a dozen of Kellogg’s cereals. The challenged ...

As reported here, on March 19, 2021, Governor Gavin Newsom signed into law Senate Bill 95. This new law requires all California employers (including those with collective bargaining agreements) with 25 or more employees to provide paid supplemental sick leave to employees who are unable to work or telework due to certain COVID-19 related reasons. In-home supportive service providers are also required to provide paid supplemental sick leave to their providers.

The new COVID-19 supplemental sick leave must be provided on the oral or written request of the covered employee ...

On March 19, 2021, California Governor Gavin Newsom signed Senate Bill 95 providing a new form of COVID-19 related paid sick leave for many California workers. The law will become effective on March 29, 2021, and applies retroactively to sick leave taken beginning on or after January 1, 2021. All California employers with more than 25 employees and in-home supportive services providers are required to provide the supplemental sick leave benefits to employees. The law will remain in effect through September 30, 2021.

SB 95 provides for COVID-19 supplemental paid sick leave for ...

On March 16, 2021, the Los Angeles County Board of Supervisors (the “Board”) revised its protocol for issuing fines to businesses violating the County’s COVID-19 protocols, reversing course. These protocols were implemented in August 2020 at the Board’s direction, and have led to fines and temporary closures for a number of restaurants.

In July 2020, the Board passed a motion directing the Department of Public Health (the “Department”) to take stricter enforcement measures to ensure greater levels of compliance with COVID-19 safety protocols.  In August 2020, the ...

On March 16, 2021, the Food and Drug Administration (“FDA”) released the results of its 2019 Food Safety and Nutrition Survey (“FSANS”). FSANS is designed to assess consumers’ awareness, knowledge, understanding and reported behaviors relating to a variety of food safety and nutrition-related topics.

Among the key findings of FSANS, the FDA reported: 

• Most consumers are familiar with the Nutrition Facts label – 87% of respondents have looked at the Nutrition Facts label on food packages. The top four items that consumers look for on the label are: Calories, Total ...

On March 15, 2021, Los Angeles County officially entered into the state’s Red Tier, permitting restaurants to offer limited capacity indoor dining, and permitting gyms, museums and galleries to open some indoor operations. The County issued several reopening protocols laying out the rules for businesses with the current reopening.

Dining

The County’s Department of Public Health issued a revised Public Health Order for Dining Protocols (the “Order”) with new protocols for indoor dining, outdoor dining and worker safety in light of the reopening.

Indoor Dining

With ...

On February 24, 2021, a judge in the United States Court for the Northern District of California preliminarily approved a $15 million class-action settlement for Post Foods, based on the case Debbie Krommenhock et al. v. Post Foods, LLC, Case No. 3:16-cv-04958-WHO, which concerns representations made by Post Foods LLC in the labeling and advertising of several popular cereal brands, including Honey Bunches of Oats and Raisin Bran.

Plaintiffs Debbie Krommenhock and Stephen Hadley filed a class action complaint against Post in August 2016 alleging that Post violated California ...

On March 11, 2021, the Los Angeles County Department of Public Health (the “Department”) announced an anticipated reopening of certain activities between March 15 and March 17, as L.A. County moves to the lower risk Red Tier of the state’s reopening plan. The exact date of the reopening will depend on when the County hits the threshold of 2 million vaccine doses being administered to people in the most under-resourced communities across the County.

The following activities will be permitted next week after L.A. County moves to the Red Tier:

• Museum, zoos and aquariums can open ...

On February 4, 2020, California State Senator Scott Weiner, who represents San Francisco and parts of San Mateo County, introduced Senate Bill 314, the Bar and Restaurant Recovery Act (the “Act”), to modernize the bar and restaurant industry and provide more flexibility to facilitate the economic recovery of the industry from the impacts of the COVID-19 pandemic.

The Act’s goal is to help the bar and restaurant industry bounce back from the pandemic by reducing the red tape, lengthy turnaround times and permit redundancies of the industry in order to provide more economic ...

The American Rescue Plan Act (“the Act”) was passed by the Senate on March 6, 2021, and is now headed for ratification by the House of Representatives and signature by President Biden. The $1.9 trillion stimulus includes over $25 billion earmarked as direct aid to restaurants.

Restaurant Revitalization Fund

Section 6003 of the Act establishes a Restaurant Revitalization Fund, to be administered by the Administrator of the Small Business Administration. The Restaurant Revitalization Fund includes $25 billion earmarked for restaurant Revitalization Grants. The Act ...

On March 1, 2021, the Court of Appeal, Second Appellate District ruled in favor of the Los Angeles County Department of Public Health (the “Department”) officials who halted outdoor dining in November 2020 during a spike in COVID-19 cases.

After the Department announced a ban on all outdoor dining, the California Restaurant Association (“CRA”) filed a lawsuit. State Court Judge James Chalfant initially ruled in favor of the CRA on December 8, 2020, and held that the Department acted arbitrarily and failed to perform the required risk-benefit analysis before issuing the ...

Q: I am a defendant in a fraudulent transfer action brought by a state court receiver. Can I demand a jury trial? I don’t want the judge who appointed the receiver to try my case, because he is clearly biased!

A: Whether you are entitled to a jury on a fraudulent transfer claim (now called a “voidable transfer” under California law— Civil Code § 3439 et. seq.) depends upon the specific relief being sought. If the action just seeks the recovery of money, it is a purely legal action, and you would be entitled to a jury. If, however, the action ...

On February 23, 2021, California Governor Gavin Newsom signed a legislative package of six bills providing relief to individuals and businesses experiencing hardship due to the COVID-19 pandemic. Some of these measures are directly targeted towards the restaurant and hospitality industry.

Small Business Grant Relief

The new measures provide $2.1 billion in small business grants of up to $25,000. This is a significant increase over the $500 million that was initially approved for these grants in November 2020.

Grants are available only for businesses and nonprofits with gross ...

The CalSavers Retirement Savings Program (CalSavers) was established to assist the estimated 7.5 million California employees without employer retirement savings plans. Mandatory compliance is phased-in over time and depends on the size of the employer. The current phase requires all California employers with 51 to 100 employees to register with CalSavers or certify that they are exempt by June 30, 2021. More specifically, employers without employer-sponsored retirement plans must register to begin offering the state-mandated employer retirement plan to their employees ...

On February 24, 2021, the Los Angeles City Council voted 14-1 to pass an ordinance mandating that employers provide $5/hour in additional premium hazard pay for on-site grocery and drug retail workers.

The ordinance is expected to go into effect the week of March 1, after it is signed by Mayor Eric Garcetti, who has already expressed support. The pay increase will go into effect for 120 days and then expire.

The ordinance applies to grocery stores and drug retails stores with more than 300 employees nationwide and more than ten employees on-site in Los Angeles. Approximately 26,000 ...

On February 23, 2021, the Los Angeles County Board of Supervisors voted 4-1 to institute a $5 per hour “Hero Pay” increase for frontline grocery workers and drug retailers in unincorporated areas of Los Angeles County. The increase is effective immediately and will remain in effect for 120 days. The ordinance will increase pay for approximately 2,500 grocery workers in these unincorporated areas of the County.

The motion was co-sponsored by Supervisors Hilda Solis and Holly Mitchell. The motion states: “Frontline grocery and drug retail workers have been met with COVID-19 ...

The “notice-prejudice rule,” often applied in the context of occurrence-type policies, requires an insurer to prove that the insured’s late notice of a claim has substantially prejudiced its ability to investigate the insured’s claim. This principle has been applied in the context of both first-party policies. Pitzer College v. Indian Harbor Ins. Co., 8 Cal. 5^th 93 (2019), applying the notice-prejudice rule to a consent provision in a first-party policy) and third-party policies written on an “occurrence” basis. See, e.g., Campbell v. Allstate Ins. Co., 60 Cal. 2d ...

On February 18, 2021, Acting FDA Commissioner Janet Woodcock and Acting USDA Secretary Kevin Shea issued a joint COVID-19 update statement that current epidemiologic and scientific information available to the FDA and USDA indicates no transmission of COVID-19 through food or food packaging.

The press release states: “Our confidence in the safety of the U.S. food supply remains steadfast. Consumers should be reassured that we continue to believe, based on our understanding of currently available reliable scientific information, and supported by overwhelming ...

On February 5, 2021, the Department of Labor (DOL) published two notices of proposed ruling to delay the effective date of two rules finalized by the DOL under the Trump Administration regarding tips and independent contractor rules. The proposed delays are designed to allow the DOL “additional opportunity for review and consideration” of both rules.

The first rule is Tip Regulations Under the Fair Labor Standards Act (“Tip Regulations”), which was published on December 30, 2020, and set to go into effect on March 1, 2021. The proposed rule would delay the effective date of ...

On February 9, 2021, a divided Ninth Circuit Panel held that consumer claims against the P.F. Chang’s restaurant chain based on the term “Krab Mix” in certain menu items could proceed. The Court reversed a lower court decision that had thrown out these claims.

Plaintiff’s claims arose from his purchase of P.F. Chang’s sushi rolls that are identified on the menu as being made with a “Krab Mix.” Plaintiff claimed that based on the “Krab Mix” name, he believed the items contained a mix of real crab and imitation crab. Plaintiff made claims based on California’s Unfair ...

Effective January 1, 2021, the California Department of Industrial Relations issued a new compensation threshold for exempt computer software employees, reflecting an increase of 2% from last year. 

To qualify for the overtime exemption, computer software employees must be paid a salary of at least $98,907.70 annually ($8,242.32 monthly) or an hourly wage of at least $47.48.  In addition, a computer software employee must also meet the duties test set forth in California Labor Code Section 515.5, which are also included in all Wage Orders except Orders 14 and 16.

More specifically ...

On February 4, 2021, the Senate voted 90-10 to approve a Restaurant Rescue Plan as an amendment to a larger budget resolution. Senate Amendment 261 was co-sponsored by Republican Senator Roger Wicker and Democratic Senator Kyrsten Sinema. The amendment is part of a budget resolution passed by the Senate on February 5 that paves the way for passage of President Joe Biden's pandemic relief package.

The Restaurant Rescue Plan establishes a $25 billion grant program for restaurants hurt by the pandemic and was based on the RESTAURANTS Act. The $25 billion in grants fall short of the $125 ...

Q: I am a receiver in two different cases, both of which have problems. I was appointed in a partnership dispute case, where the only asset is a marijuana dispensary. I have been running the dispensary, but because of COVID-19 and the lease obligations; it is not making money. I am also receiver for a bar, owned by an LLC, some of whose members filed an action to dissolve and wind-up the LLC, due to allegations of mismanagement. Because of COVID-19, the bar has been closed and I have not been operating it, although I have possession of it. Both the dispensary and the bar have some valuable assets ...

The 2021 mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes have decreased from last year, or remained unchanged. Specifically, as of January 1, 2021, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

• 56 cents per mile driven for business use, down one and one-half cents from the rate for 2020;
• 16 cents per mile driven for medical or moving purposes, down one cent from the rate for 2019; and
• 14 cents per mile driven in service of charitable organizations, unchanged from ...

On January 22, 2021, a divided Ninth Circuit panel ruled that a nutritional guide could constitute commercial speech subject to the Lanham Act.

The Lanham Act is best known for being the primary federal trademark statute in the United States. In addition to the trademark provisions, Section 43(a) of the Lanham Act creates a cause of action for false advertising and prohibits any person from misrepresenting his or another person’s goods or services in “commercial advertising or promotion.”

In this case, defendant NutriSearch Corporation published a guidebook that compared ...

Where an employee of a company commits an intentional act, such as a battery or sexual molestation, the managers of that company are often named as defendants on a theory of “negligent supervision”, “negligent retention” or some other form of vicarious liability. While the company’s liability policy of insurance may contain exclusions which bar coverage for loss arising from the employee’s intentional act, the question arises whether the negligence claims against the managers or the company are nevertheless covered by liability insurance.

The threshold question ...

The Los Angeles County Public Health Department issued a new order outlining protocols for businesses to follow. These new rules are designed to decrease COVID transmission risk in restaurant settings.

Some of these new rules for restaurants include:

• Employees that may come in contact with customers must wear both a face covering and a face shield at all times when interacting with customers and when in customer service areas.
• Outdoor dining table seating must be limited to no more than 6 people per table, all of whom must be from the same household.
• All establishments must post signage ...

On January 21, 2021, President Biden issued an Executive Order on Protecting Worker Health and Safety that calls for a government review of worker safety standards for COVID-19.

The Executive Order directs the Secretary of Labor to issue revised guidance to employers on workplace safety during the COVID-19 pandemic within two weeks. It further directs the Secretary of Labor to consider emergency temporary standards on COVID-19 and issue those standards by March 15, 2021.

The Executive Order calls for a review of enforcement efforts previously undertaken by the Occupational ...

On January 25, 2021, the California Department of Public Health announced that it was lifting the Regional Stay at Home Order for all regions statewide, including Southern California. Four-week ICU capacity projections for the three regions still under the order (Southern California, Bay Area and San Joaquin Valley) were above 15%.

According to the Department, “this action allows all counties statewide to return to the rules and framework of the Blueprint for a Safer Economy and color-coded tiers that indicate which activities and businesses are open based on local case rates ...

On January 25, 2021, Los Angeles County Director of Public Health Barbara Ferrer announced that the county would be permitting outdoor dining starting Friday, January 29. The county will also remove operation restrictions for non-essential businesses between 10 p.m. and 5 a.m. The County’s announcement followed Governor Gavin Newsom’s lifting of the state’s Regional Stay at Home Order earlier today.

LA County Board of Supervisors Chair Hilda Solis released a statement that “Los Angeles County will essentially align with the state, by the end of the week, to allow for the ...

On January 12, 2021, the Food and Drug Administration (“FDA”) announced two updates to stakeholders regarding the agency’s Food Traceability Proposed Rule. 

The Proposed Rule was initially announced on September 12, 2020, and it establishes additional traceability recordkeeping requirements for companies that manufacture, process, pack or store foods that the FDA has included on its Food Traceability List.

First, the FDA announced clarifying edits to the Food Traceability List. All of the specific edits are described in a memo: “Food Traceability List for ...

On January 4, 2021, the Food and Drug Administration announced that it would set January 1, 2024 as the uniform compliance date for final food labeling regulations that are issued in calendar years 2021 and 2022.

In its Federal Register publication of the rule, the FDA stated: “Use of a uniform compliance date provides for an orderly and economical industry adjustment to new labeling requirements by allowing sufficient lead time to plan for the use of existing label inventories and the development of new labeling materials.”

If any food labeling regulation involves special ...

Our previous articles have summarized the Paycheck Protection Program (“PPP”) created under the Federal CARES Act: CARES Act: Paycheck Protection Program Loans, CARES Act: Loan Applications, and CARES Act: Loan Forgiveness Applications. 

This client alert provides information regarding the additional funding and guidelines for the PPP created by the new Consolidated Appropriations Act of 2021 (the “2021 Act”). Given this subject’s urgency and the complexity of the 2021 Act, this is simply a short summary to provide you a starting point for exploring relief that may ...

On January 1, 2021, the California minimum wage increased to $14.00 per hour for employers with at least 26 employees and $13.00 per hour for smaller employers. The state minimum wage also governs the exempt employee threshold salary, which has increased accordingly. The new minimum salary for employees who otherwise qualify to be exempt from overtime is $58,240 annually for employers with at least 26 employees and $54,080 annually for employers with fewer than 26 employees. 

Further, several California municipalities will raise their minimum wage rates on July 1, 2021. Employers ...

On January 5, 2021, the Los Angeles County Board of Supervisors considered an urgency ordinance requiring grocery stores to pay workers an additional $5/hour as “Hero Pay” due to the COVID-19 pandemic. 

Supervisors Hilda Solis and Holly Mitchell put forth the motion and noted that “as the County experiences a record-breaking wave of COVID-19 cases, grocery retailers have experienced an increase in outbreaks with nearly 500 businesses currently under investigation in the County alone. The inability to practice social distancing consistently at work due to large crowds has ...

Effective beginning December 31, 2020, the Los Angeles County Department of Public Health published a Mandatory Directive on Travel (Appendix W) and issued a Revised Temporary Order, both of which require a mandatory quarantine of at least 10 days after non-essential travel outside the Southern California Region (the counties of Imperial, Inyo, Los Angeles, Mono, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara and Ventura). 

The Order and Travel Directive apply to Los Angeles County residents and non-residents who enter Los Angeles County from ...

On December 28, 2020, the U.S. Department of Agriculture and the U.S. Department of Health and Human Services released 2020-2025 Dietary Guidelines for Americans. 

Dietary Guidelines have been published by the USDA and HHS every five years since 1980. The 2020-2025 Dietary Guidelines are the first to include nutritional guidance for babies and toddlers.

The final 2020-2025 Dietary Guidelines rejected guidance from the advisory committee’s scientific report with regard to alcohol consumption and sugar intake. The committee had recommended that alcohol consumption guidance ...

On December 29, 2020, California Health and Human Services Secretary Dr. Mark Ghaly announced that the Southern California region would remain under a regional stay-at-home order indefinitely until ICU capacity goes above 15%. ICU capacity is currently at 0% in Southern California.

The Regional Stay Home Order was first announced on December 3, 2020. The order prohibits private gatherings of any size, closes sector operations except for critical infrastructure and retail, and requires 100% masking and social distancing except for certain limited exceptions. The order sets a ...

On December 18, 2020, the Interagency Food Safety Analytics Collaboration (IFSAC) issued its 2018 Annual Report on the Sources of Foodborne Illness. 

The report collects and analyzes foodborne-illness outbreak data for four pathogens - Salmonella, Escherichia coli O157, Listeria monocytogenes, and Campylobacter – and specific foods and food categories that are responsible for foodborne illnesses in the United States. The CDC estimates that, together, these four pathogens cause nearly two million cases of foodborne illnesses in the U.S. each year.

The report found:

A lawsuit has been filed against Cal/OSHA regarding its recently instituted regulations requiring employers to adopt numerous COVID-19 measures. In addition, a separate suit was filed against Governor Newsom for the outdoor dining ban that is part of recent COVID-19-related regional restrictions. 

Specifically, the National Federation of Independent Business (NFIB) teamed with the National Retail Federation and three NFIB small business owner members to sue the California Division of Safety and Health (Cal/OSHA), the California agency that recently instituted extensive ...

On December 17, 2020, three U.S. agencies: The U.S. Environmental Protection Agency (“EPA”), U.S. Food and Drug Administration (“FDA”) and U.S. Department of Agriculture (“USDA”) announced the renewal of the Formal Agreement Among EPA, FDA and USDA Relative to Cooperation and Coordination on Food Loss and Waste. The renewed agreement has a three-year term.

The Winning on Reducing Food Waste Federal Interagency Strategy prioritizes action areas to reduce food loss and waste. As related activities and projects are completed through 2020, the EPA, USDA and FDA will ...

On December 22, 2020, the Department of Labor (“DOL”) announced a final rule revising its tipped employee regulations. The final rule is designed to address and incorporate amendments made to section 3(m) of the Fair Labor Standards Act (“FLSA”) by the Consolidated Appropriations Act of 2018 (“CAA”). That amendment prohibits employers from keeping tips received by their employees, regardless of whether the employer takes a tip credit. It also prohibits employers from allowing managers or supervisors to keep any portion of employee’s tips.

In this final rule, the ...

On December 21, 2020, Congress agreed to a $900 billion stimulus bill, passed as The Consolidated Appropriations Act, 2021 (“the Act”). The 5,593-page Act includes funds designated for direct relief, additional money for forgivable Paycheck Protection Loans and tax relief measures, but does not include funding specifically for restaurants or hotels.

• Paycheck Protection Program Second Draw Loans: The Act sets aside $300 billion in additional Paycheck Protection Loans. Of that, $15 billion is earmarked for live entertainment venues and $20 billion is set aside for ...

On December 11, 2020, the U.S. Department of Labor’s Office of the Inspector General (“OIG”) released a report finding that the Department of Labor (“DOL”) did not demonstrate that it followed a sound process in promulgating its 2017 tip rule.

The DOL published a Notice of Proposed Rulemaking of the 2017 tip rule on December 5, 2017. The 2017 tip rule rescinded portions of the DOL’s 2011 tip regulations under the Fair Labor Standards Act, which were passed by the Obama Administration. In issuing the 2017 tip rule, the DOL stated that the 2011 tip rule incorrectly construed ...

A recent case from California, Barickman vs. Mercury Casualty, 2 Cal.App.5^th 508 (2016) illustrates the perils that may arise when an insurance company, evidently playing hardball with its insured, refuses to deviate from its “form” releases.

In Barickman, the Mercury’s insured (McDaniel) injured two individuals (Barickmand and McInteer) in a car accident in which McDaniel was found to have been intoxicated while driving his car. McDaniel was criminally prosecuted and there was the possibility that McDaniel, as part of any sentence in the criminal proceeding, might be ...

Yesterday Judge James Chalfant issued a preliminary injunction against Los Angeles County’s outdoor dining ban on the basis that the county acted arbitrarily and failed to perform the required risk-benefit analysis. The case was brought by the California Restaurant Association and Mark Geragos to challenge the outdoor dining ban imposed by the November 30th Los Angeles County stay-at-home order.

The Court held that L.A. County was required to perform a complete risk-benefit analysis before enacting the ban and that it failed to do so. The Court’s ruling noted that the L.A ...

On November 30, 2020, Cal-OSHA’s proposed temporary COVID-19-related emergency regulations became effective. The new regulations, which are found here, will remain in effect until October 2, 2021, unless they are extended.

The new regulations apply to most California employees, only excluding employees working from home, an employee at a site where the employee does not have contact with others and employees covered by Cal-OSHA’s Aerosol Transmissible Diseases standard (applies to certain healthcare facilities and labs).

Under the new regulations, employers must ...

On December 3, 2020, California Governor Gavin Newsom announced a new regional stay-at-home order.

Under the order, California is divided into five regions: Northern California, Greater Sacramento, Bay Area, San Joaquin Valley and Southern California. Regions where the ICU capacity has gone over 85% will be placed into a Stay-at-Home order for a minimum of three weeks. After the three-week period, reopening of closed services will be based on four-week projections of regional ICU capacity.

Southern California and three other regions are anticipated to reach 85% or more ICU ...