On April 24, 2025, the California Supreme Court ruled unanimously that a contract provision restricting liability for willful injury was unenforceable under California Civil Code section 1668. This decision was in response to a certified question from the Ninth Circuit.

The underlying case, which was file in 2021, involved a barbecue sauce dispute. New England Country Foods (“NECF”) filed against its manufacturer, VanLaw, and sought $6 million in damages. NECF alleged that VanLaw copied the barbecue sauce at the end of the three-year manufacturing contract and tried to sell ...

            On April 29, 2025, the Ninth Circuit Court of Appeals revived the copyright infringement case filed by Sound and Color, LLC against Sam Smith, Normani, and related parties (collectively, “Defendants”) concerning the hit song "Dancing with a Stranger" by reversing the District Court’s granting of summary judgment in favor of Defendants. In making its decision, the Ninth Circuit affirmed the importance of the jury’s role in assessing substantial similarity.

            Sound and Color initiated a copyright infringement case against Defendants based on its allegation that the ...

In the recent decision of Bradsbery v. Vicar Operating, Inc., a California appellate court addressed the enforceability of prospective written meal period waivers for employees working shifts between five and six hours. The court affirmed that such waivers are valid under the California Labor Code and applicable Industrial Welfare Commission (IWC) Wage Orders, provided they are mutual, voluntary, and revocable at any time.

In the Bradsbery case, two former employees of Vicar Operating, Inc., a veterinary hospital operator, filed a class-action lawsuit alleging that the ...

Q: I am involved in pending litigation and would like to get a receiver appointed. The facts of the case, however, don’t exactly fit into the types of cases enumerated in Cal. Civ. Pro. Code §564(b). Is there some other bases for getting a receiver appointed?

A: Depending on the facts, there are many types of cases where a receiver can be appointed that are not specified in §564(b). Many are statutory. For example: to enforce an order of the family court, Cal. Fam. Code §290; to deal with health and safety code violations, Cal. Health & Safety Code § 17980(c); in unfair competition cases,  ...

On April 17, 2025, FDA Commissioner Martin Makary announced a policy directive to limit industry representatives, who are employed by companies regulated by FDA from serving as official members on FDA advisory committees. FDA advisory committees have historically been used by FDA to obtain independent expert advice and recommendations on scientific and technical policy decisions.

FDA’s news release states: “Today’s action will not preclude employees of regulated companies from attending or presenting their views at advisory committee meetings or serving as ...

On April 22, 2025, the  U.S. Department of Health and Human Services (“HHS”) and U.S. Food and Drug Administration (“FDA”) announced new measures to phase out all petroleum-based synthetic dyes from the U.S. food supply.

FDA actions include:

• Establishing a national standard and timeline for the food industry to transition from petrochemical-based dyes to natural alternatives.
• Initiating the process to revoke authorization for two synthetic food colorings—Citrus Red No. 2 and Orange B—within the coming months.
• Working with industry to eliminate six remaining ...

On April 10, 2025, the FDA held a public webinar on the updated criteria for companies to use the “healthy” nutrient content claim. This webinar tracked the final rule issued on December 27, 2024.

The updated criteria for a “healthy” nutrient content claim requires that a food product: (1) contain a certain amount of food from at least one of the food groups or subgroups recommended by the Dietary Guidelines for Americans (fruit, vegetables, grains, fat-free and low-fat dairy and protein foods), and (2) meet specific limits for added sugars, saturated fat and sodium.

The ...

Less than a year ago, the California Supreme Court in Ramirez v. Charter Communications, Inc. opined, in the context of employment arbitration agreements, that there is no bright line rule that requires a court to refuse enforcement if a contract has more than one unconscionable term.  Rather, the appropriate inquiry is qualitative.  “At the outset, a court should ask whether the central purpose of the contract is tainted with illegality. [Citations]. If so, the contract cannot be cured, and the court should refuse to enforce it.”  This ruling gave lower courts the power to ...

The case of Parra Rodriguez v. Packers Sanitation Services LTD., LLC typifies the reason employers and employment counsel must stay on top of arbitration case developments. 

The Second District Court of Appeals in California in Leeper v. Shipt, Inc. recently decided that all Private Attorney General Act (“PAGA”) actions necessarily have “individual” and “representative” components, regardless of whether individual claims are pleaded.  This holding was significant because employers could then compel arbitration of the otherwise absent individual PAGA claims ...

The Private Attorneys General Act of 2004 (“PAGA”) was intended to allow employees to bring actions on behalf of the State of California against employers who failed to comply with Labor Code sections that were considered underenforced. This well-intentioned goal ultimately became a wrecking ball, tearing down California employers with an onerous penalty scheme that could cripple the average employer.

After a concerted effort to amend the PAGA statute last year via ballot initiative, the California Legislature compromised with California businesses and passed reforms

Since its enactment in 2019, Code of Civil Procedure 1281.98, which governs arbitration fee payments, has been inviolate: arbitrators do not have the unilateral power to extend the fee payment deadline; “checks in the mail” do not satisfy the 30-day payment deadline; there are no extensions based on the date or method by which the invoice was issued; and the Federal Arbitration Act (“FAA”) may not preempt the California Arbitration Act, or the statutory fee payment deadline.

Despite these rulings, employers and their counsel continue to search for some reprieve against ...

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the “Act”), a federal law, is unique for its role in overriding the policy in favor of the enforcement of arbitration agreements.  The Act was legislated so that victims of sexual assault and harassment in the workplace would be entitled to their day in court, rather than behind the closed doors of a private arbitration, if that is what they prefer.  As such, where the Federal Arbitration Act (“FAA”) applies, so too does the Act.

Recently, however, the California Court of Appeal was posed the ...

Readers of this blog are, by now, aware of California’s judicial and legislative hostility toward arbitration.  Over the last few months, however, employers have seen a surprising number of appellate victories in their respective bids to enforce valid arbitration agreements with their employees.  The recent opinion in Vo v. Technology Credit Union continues this recent trend.

Prior to Vo, it had been well-established that, absent an explicit reference to the California Arbitration Act (“CAA”) which includes provisions providing for discovery in arbitration, an ...

Q: I am a state court receiver for an LLC that owns a number of apartment buildings, which I am now managing. I have been sued by some tenants and a tenant group. They have not obtained receivership court permission to sue me, which I think is required. They contend that because their claims relate to my managing the business of the LLC they do not need prior permission to sue me and have cited 28 U.S.C. §959(a). Does this federal statute apply to me—a state court receiver?

A: No. 28 U.S.C. §959(a), which is an exception to the Barton Doctrine [Barton v. Barbour, 104 U.S. 126 (1881)], requiring ...

There is no greater threat to an employment arbitration than Code of Civil Procedure section 1281.98, which mandates that the party who drafted the arbitration agreement pay the fees and costs of the arbitration within 30 days after the due date.  A failure to do so will result in a “material breach” of the arbitration agreement, which will entitle the non-drafting party (i.e., the employee) the right to withdraw from the arbitration and obtain onerous sanctions against the drafting party (i.e., employer). Employers have no room for error under this statute. 

 In every case prior to ...

Prior to the United States Supreme Court’s decision in Viking River Cruises Inc. v. Moriana, California courts did not consider the components of a Private Attorneys General Act (“PAGA”) claim.  In the Viking River opinion, the Court delineated between a “representative PAGA claim” – referring to a PAGA claim based on violations that employees other than the plaintiff had suffered – and an “individual PAGA claim”, which referred to a portion of a PAGA action that is “based on code violations suffered by the plaintiff.”  The California Supreme Court followed ...

Q:      I am a state court receiver in a case that has been disrupted by a bankruptcy filing. The bankruptcy trustee has been threatening to sue me, in the bankruptcy court, for what she claims were negligent actions and to recover alleged preferential transfers. Doesn’t the trustee have to get prior permission from the state receivership court to be able to sue me?

A:      Yes. The Barton Doctrine [ Barton v. Barbour, 104 U.S. 126 (1881) ] provides that a party seeking to sue a receiver must first obtain leave of the appointing court to do so and, absent such leave, no other court has jurisdiction to ...

Tell me if you have heard this one before: ten companies are sued by a former employee as “joint employers”, even though the employee technically worked for, and signed a binding arbitration agreement with, only one of them.  The employers then move to compel arbitration and the employee opposes the motion.  The trial court grants or denies the motion to compel and the losing party (or parties) appeal(s).  If this sounds familiar, it is because there are no less than six published appellate court decisions have come down in recent years that have wrestled with the issue of whether joint ...

The 2025 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 2024, when rates were last modified. Specifically, as of January 1, 2025, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

• 70 cents per mile driven for business use, up three cents from the rate for 2024;
• 21 cents per mile driven for medical, or moving purposes for active duty members of the Armed Forces, unchanged from the rate for 2024; and
• 14 cents per mile driven in ...

This summer, California passed significant and much-needed legislation reforming the Private Attorneys General Act (PAGA), which permits individual employees to sue employers on behalf of themselves, other employees, and the State of California to recover civil penalties for California Labor Code violations.  If you are passionate about the intricacies of PAGA and wish to spend some quality time on a deep dive into what these changes mean for employers, feel free to check out our previous writing on the subject here.

Additionally, the California Labor & Workforce Development ...

Governor Newsom signed Senate Bill (“SB”) 1350, which expands the definition of employment to include some household domestic employees who work through agencies. SB 1350 will go into effect on July 1, 2025.

Historically, the definition of “employment” for purposes of California’s Occupational Safety and Health Act excluded all household domestic service employees. These employees were therefore not provided with health and safety protections by Cal-OSHA. SB 1350 expands the definition of “employment” to include household domestic service performed on a ...

The Equal Employment Opportunity Commission issued its long-awaited final guidance on harassment claims this year, which went into immediate effect.  Per EEOC Chair Charlotte A. Burrows, the final guidance, the EEOC’s first update on the subject in roughly 25 years, in intended to act as a “comprehensive resource” regarding “best practices for preventing and remedying harassment” as well as clarifying recent legal developments on the subject.

The EEOC is responsible for enforcing federal laws banning discrimination against a worker or job applicant on the basis of a ...

Los Angeles County:

In 2016, the city of Los Angeles passed the Fair Chance Initiative for Hiring Ordinance (FCIHO).  Preempting California’s Fair Chance Act (FCA) by nearly two years, the FCIHO prohibits private employers operating in the city of Los Angeles from inquiring into a job applicant’s criminal history on job applications or postings.  The first instance in which such an inquiry can be made is after a conditional offer of employment is extended.  An employer that wishes to withdraw an offer of employment based on criminal history must first engage in a defined “Fair ...

The trend of increasing minimum wage rates will continue in 2025. We previously reported here the California 2025 state and local minimum wage rate increases.  The federal contractor minimum wage rates will likewise continue on an upward trajectory, as follows: on January 1, 2025, the hourly minimum wage for certain existing federal contracts will increase from $17.20 to $17.75.  This minimum wage rate will apply to both non-tipped and tipped workers, as the lower cash wage that contractors had been permitted to pay tipped workers was eliminated on January 1, 2024.

Covered contracts ...

In 2022, Congress enacted the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act” (the “Act”) which provides that, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, “no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.”  (9 U.S.C. § 402, emphasis added).  

In two recent cases, Doe v ...

Effective January 1, 2025, companies using freelance workers must comply with the Freelance Worker Protection Act (“FWPA”). FWPA was signed by Governor Newsom on September 28, 2024 as Senate Bill (“SB”) 988. FWPA passed with a 70-0 vote in the State Assembly and a 34-3 vote in the State Senate.

According to a press release by one of the bill’s authors, State Senator Scott Weiner, freelance workers make up 39 percent of the total U.S. workforce and contribute $1.35 trillion to the economy. Additionally, only 25 percent of freelance workers reported having written ...

California law has long held that an employer’s good faith dispute over wages owed, if any, to its employees will preclude the imposition of “waiting time” penalties otherwise due following the termination of their employment.  This year, employers received a rare, gift-wrapped ruling that expanded this maxim.

In Naranjo v. Spectrum Security Services, Inc., the California Supreme Court resolved a split in judicial opinion regarding whether a similar good faith belief could negate penalties under Labor Code section 226 for knowingly and intentionally failing to report ...

Effective January 1, 2025, the California Department of Industrial Relations has issued a new compensation threshold for exempt computer software employees, reflecting an increase of 2.5% from last year. 

To qualify for the overtime exemption, computer software employees must be paid a salary of at least $118,657.43 annually ($9.888.13 monthly), or an hourly wage of at least $56.97.  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 ...

In 2003, the California Supreme Court adopted a stringent test to determine whether an employer had waived its right to compel arbitration of an employee’s claims.  The most critical, and often determinative, factor was “prejudice” to the party resisting arbitration.  In other words, the courts were obligated to determine whether the party resisting arbitration had been prejudiced by the other party’s behavior – typically manifested through inordinate delay or litigation gamesmanship.

The facts in the recent case of Quach v. California Commerce Club, Inc., in which ...

What goes up continues to go up!  As we pointed out here last year, the trend of increasing the minimum wage continues, as follows:

State:

On January 1, 2025, the California state minimum wage, excluding fast food industry employers and certain healthcare facilities, will increase from $16.00 per hour to $16.50 for employers of all sizes, reflecting a 3.1% increase, which is based on the expected rate of inflation.  The state minimum wage also governs the exempt employee threshold salary, which will increase accordingly.  The new minimum salary for employees who otherwise qualify to be ...

California recently enacted a new law which generally prohibits employers from including statements in job advertisements, postings, applications, or other materials that an applicant must have a driver's license.  Effective January 1, 2025, Senate Bill 1100 amends the California Fair Employment and Housing Act (FEHA) to include this prohibition against requiring a driver’s license in employer materials, unless the employer can meet both of two conditions.

Specifically, in order for an employer’s pre-employment materials to include that an applicant must have a ...

After a contentious six-hour meeting, the Los Angeles City Council voted 12-3 in favor of increasing the hourly wage of approximately 23,000 hotel and LAX workers to $30. The $30 minimum wage will go into effect in by July 2028, when the city will host the Summer Olympics.

The $30 minimum wage campaign, also known as the Olympic wage campaign, has been spearheaded by Unite Here Local 11 and the Service Employees International Union. Both unions have been heavily involved with local and statewide lobbying for higher minimum wages in several different industries. Both unions also ...

A new California law will prohibit employers from requiring that an employee take earned vacation before receiving paid family leave (PFL) benefits.  Effective January 1, 2025, Assembly Bill 2123 amends the Unemployment Insurance Code, which previously allowed employers to require employees to exhaust up to two weeks of accrued but unused vacation leave as a condition of an employee’s initial receipt of these benefits.  For any period of disability commencing on or after January 1, 2025, an employer can no longer impose such a condition.

The state provides PFL benefits to eligible ...

Effective January 1, 2025, AB 2299 draws attention to the importance that California places on whistleblower rights by requiring the Labor Commissioner to develop a model list of employees’ rights and responsibilities under California’s whistleblower laws.  Employers must prominently display this model or similar poster in the workplace that will satisfy the preexisting requirement to display a list of employees’ rights and responsibilities under the whistleblower laws.  The posting must also include the Attorney General’s 1-800-9520-5225 whistleblower hotline.  ...

California recently enacted new requirements concerning the notice employers must give their employees regarding workers’ compensation matters.  Effective January 1, 2025, Assembly Bill 1870 amends Labor Code section 3550 to require employers to advise their employees of the right to consult a licensed attorney regarding any worker’s compensation claim who will be paid from an injured employee’s recovery in most instances.

Currently, the California Labor Code requires employers to conspicuously post a notice that includes specific information regarding worker’s ...

Live events are part and parcel of California’s landscape.  From Coachella to county fairs, thousands of workers each year participate in setting up and tearing down the infrastructure at these public event venues.  Widely reported tragedies related to this work in years’ past, combined with the temporary nature of these entertainment events, have prompted the California legislature to promulgate additional protections for this class of workers through the recently enacted Assembly Bill 2738.

Effective immediately, as part of the contract for production of any live event at ...

California has a habit of finding creative ways to protect employees from potential instances of discrimination or retaliation, no matter how remote.  Senate Bill 399, pointedly titled the “California Worker Freedom from Employer Intimidation Act” (“SB 399”), furthers this tradition by prohibiting employers from subjecting an employee to, or threatening an employee with, discharge, discrimination, or retaliation because the employee declines to attend a mandatory employer-sponsored meeting or otherwise refuses to listen to the employer’s communications ...

Governor Newsom recently signed an amendment to the CROWN Act (which stands for “Creating a Respectful and Open World for Natural Hair”) extending the Act’s reach.  Specifically, the amendment, Assembly Bill 1815, makes two key changes.  First, it amends the Unruh Civil Rights Act to now include the CROWN Act.  Second, it amends key definitions in the CROWN Act to eliminate prior ambiguities.

Originally enacted in 2019, the CROWN Act is intended to prevent discrimination based on natural and protective hairstyles associated with race in the workplace and public schools.  ...

Over the last several years, California employers have become increasingly aware of cities and counties enacting workplace requirements on a wide range of issues, including scheduling, lay offs, paid sick leave, minimum wages, and other more industry-specific requirements.  Next year that list is likely to become even more expansive with the addition of laws on discrimination. 

Specifically, effective January 1, 2025, Senate Bill 1340 permits any city, county, or other political subdivision of the state to enforce a local law prohibiting discrimination in employment against ...

Lawyers love obscure rules about giving three-day notices—the kind that California landlords hate. The decision in City of Alameda v. Sheehan, published September 13, 2024, teaches that there is a wrong way to issue a notice to pay rent or quit to a delinquent tenant.

In Sheehan, tenant Shelby Sheehan had stopped paying rent for 17 months. The landlord, City of Alameda, had enough. The City directed its property manager, RiverRock Real Estate Group, Inc. to get the tenant current or to evict. The manager served a three-day notice to pay rent or quit that advised the tenant to deliver ...

Beginning July 23, 2024, California's Indoor Heat Illness Prevention regulations apply to most indoor workplaces.  Among other things, the regulations require that employers implement certain indoor heat illness prevention measures when the indoor temperature reaches certain benchmark levels.  Additionally, employers must develop and implement a written indoor heat illness prevention plan (IHIPP) in the language understood by the majority of workers.

Required heat illness prevention measures must be implemented in most cases when indoor temperatures reach 82°F to ...

On September 22, 2024, Governor Newsom signed Senate Bill (“SB”) 1053, which prohibits grocery stores from offering single-use plastic carry out bags for sale. Instead, stores must offer only paper bags.

Beginning on January 1, 2026, stores may not offer single-use plastic carry out bags for the purpose of carrying purchased goods, with limited exceptions. Only “recycled paper bags,” would be permitted. Beginning on January 1, 2028, recycled paper bags must be made from a minimum of 50% postconsumer recycled materials.

The legislation targeted a perceived loophole in ...

The FTC’s effort to implement a nationwide ban on the use of most non-compete agreements has been stalled indefinitely following a recent court ruling by a district court judge in Texas.  Specifically, in Ryan, LLC v. FTC, U.S. District Judge Ada Brown issued a ruling blocking the FTC’s final rule from going into effect, finding that the FTC “lack[ed] statutory authority to promulgate the Non-Compete Rule” and noting that the FTC’s rule was “arbitrary and capricious” as the FTC failed to provide a reasonable explanation to justify the breadth of the rule.

Originally ...

Q: I have a client who owes money to the IRS. While I know the IRS likely has a tax lien, my understanding was it just waits until a taxpayer’s property is sold and then gets paid out of escrow. Instead, here, the IRS has filed suit and is asking the court to appoint a receiver to take my client’s property and sell it. I thought receivers can’t be appointed if there is an adequate remedy at law, which would be the case here, since the IRS could get a judgement for what it contends it is owed and then attempt to collect on its money judgment. The US Attorney on the case disputes this, saying the IRS ...

In August 2000, the California Supreme Court handed down a landmark ruling that changed the face of employment arbitration agreements going forward.  That case, known as Armendariz v. Foundation Health Psychcare Services, Inc., clarified the standards of “procedural” and “substantive” unconscionability in these agreements.  While Armendariz is commonly cited for its holdings on these different types of unconscionability, a lesser aspect of the holding, which was largely unremarked upon for nearly 25 years, dealt with the issue of severing unconscionable ...

Q: I am a receiver for a partnership. I was appointed pursuant to a stipulation between the current partners and a secured creditor. After an extensive investigation, I have sued the former managing partner and her mother to recover fraudulent transfers, for breach of fiduciary duty and for usurping partnership opportunities. They are contending, in defense, that I cannot maintain my lawsuit because my appointment is not valid, because the current partners, having purportedly wrongfully removed the former managing partner, had no right to stipulate to my appointment. Can they ...

The Private Attorneys General Act (“PAGA”), which permits individual employees to sue employers on behalf of themselves, other employees and the State of California to recover civil penalties for California Labor Code violations, has long garnered criticism for excessively penalizing employers and incentivizing frivolous lawsuits.  Business groups had proposed a ballot initiative for the upcoming election that sought to repeal PAGA and replace it with a new law which did not include the state in the collection of civil penalties and which provided resources for employers ...

Arbitration agreements, at their core, are contracts. As with any contract, there must be “mutuality” or, more colloquially, a “meeting of the minds” on what the contract is intended to encompass. For this reason, employment arbitration agreements are typically limited in scope and drafted to cover only claims or causes of action arising from or related to the relationship between the employee and employer.

 A recent case involving the University of Southern California illustrates the importance of careful drafting. An issue in Cook v. University of Southern California

On Tuesday, July 30, 2024, Los Angeles Mayor Karen Bass announced that the deadline for restaurant owners to apply for the city’s permanent Al Fresco program has been extended to December 31, 2024. This means that any restaurants with temporary authorization may continue to offer outdoor dining. The LA Al Fresco program is a popular initiative that came out of the COVID-19 pandemic in 2020. Restaurants were able to apply for temporary authorizations to enable them to use sidewalks and street space for outdoor dining.

The city had previously announced that Al Fresco Temporary ...

Since its enactment, California courts have universally established the California Code of Civil Procedure section 1281.97 et seq., which governs the timely payment of fees in arbitration, allows no room for error. Within the last two months, the California Court of Appeals issued two competing decisions addressing whether the Federal Arbitration Act (“FAA”) preempts the California Arbitration Act (“CAA”), and by extension the statutory fee payment deadline set forth in section 1281.97.

In this corner, fighting for federal preemption, is Hernandez v. Sohnen ...

        Over the last decade, the use of e-signatures has become the norm for human resources departments when onboarding new employees.  The advent of resources like DocuSign, Taleo, BabooHR, and others have made this process simple, efficient, and very user friendly.  But with these technological advances comes increased scrutiny from California courts – particularly when evaluating electronically signed arbitration agreements.

            Generally, for an e-signed arbitration agreement to be enforced, an employer must demonstrate, beyond a “preponderance of evidence”, that the ...

July 1^st Minimum Wage Increases

Each year on July 1st, a number of local municipalities and the County of Los Angeles raise their hourly minimum wage, based on changes to the consumer price index, and as required by local minimum wage ordinances. In contrast, and as we previously reported here, California customarily issues its annual hourly minimum wage rates each January 1st.

Beginning July 1, 2024, the following increases will apply to employers in the designated areas:

Over the weekend, Governor Newsom signed Senate Bill 1524 into law, an emergency provision clarifying that Senate Bill 478, the “hidden fees” law that went into effect this week, will not apply to restaurants, bar, food concessions, grocery stores, or grocery delivery services in the same way it will apply to businesses in other industries. SB 1524 arose from concern in the restaurant industry regarding the impact SB 478 would have on restaurants following the issuance of guidelines from the California Attorney General Office in May.

As a reminder, SB 478 revises applicable code ...

If you missed our last reminder, there is less than a week for most California employers to finalize and implement Workplace Violence Prevention Plans (“WVPP”) and have their employees trained on the company-specific policies by July 1, 2024.

As part of implementing the Workplace Violence Prevention Plan, an employer’s designated “Crime/Workplace Violence Prevention Coordinator(s)” must physically go through each office or workplace and identify potential areas of concern or improvement and record their efforts in doing so.

Similarly, each Crime/Workplace ...

On March 11, 2024, the U.S. Department of Labor’s (“DOL”) revised independent contractor test took effect, under a Final Rule issued by the Wage and House Division of DOL. The rule for Employee or Independent Contractor Classification under the Fair Labor Standard Act (“FLSA”) was published on January 10, 2024.

The Final Rule applies the following six factors to determine whether an individual is an employee or independent contractor under the FLSA:

(1) opportunity for profit or loss depending on managerial skill;

(2) investments by the worker and the potential ...

On May 31, 2024, Governor Gavin Newsom signed Senate Bill 828, delaying the implementation of the recently passed healthcare minimum wage law, SB 525, by one month, from June 1, 2024 to July 1, 2024.  The applicable law, SB 525, was previously passed by the legislature and signed by Governor Newsom in October 2023.  In recent weeks, it was determined state budgetary concerns have made it practical to delay implementation of SB 525 by another month.  Further, all future increases to minimum wage under SB 525 will occur on July 1st of subsequent years, rather than June 1st.

Q: I am a property manager for a receiver who is administrating a large apartment complex. The receiver has directed that I make certain repairs, but not others demanded by some of the tenants. Some of the tenants have threatened to sue me for not making the unauthorized repairs, for what they claim is shoddy work, and for disrupting the quiet enjoyment of their units, because of the authorized work. The receiver has told me not to worry, that I can’t be sued without prior court approval. While that may be true, what happens if the court allows such lawsuits? While I understand the receiver ...

The Los Angeles County Board of Supervisors recently passed the Los Angeles County Fair Workweek Ordinance (the “Ordinance”), which generally requires that certain retail employers in the unincorporated areas of the County of Los Angeles give workers their schedules two weeks in advance, compensate them for last-minute schedule changes and provide at least ten hours between shifts.  The Ordinance will go into effect on July 1, 2025, and largely duplicates the Los Angeles Fair Work Week Ordinance which became effective in the City of Los Angeles on April 1, 2023. The Ordinance ...

The Federal Trade Commission recently issued a final rule largely banning the use of non-compete agreements nationwide.  The stated purpose of the rule is to address the substantially increased harm non-compete agreements have caused to fair competition in recent years.  While several states, including California, already have similar bans in place, the FTC determined that a nationwide rule was necessary as the state-by-state approach did not adequately address the issue.

The FTC estimates that approximately 30 million workers are currently covered by non-competes.  By wiping ...

On May 8, 2024, the California Attorney General’s Office released much needed and highly anticipated guidance on steps companies in California will need to take to ensure compliance with SB 478, California’s prohibition on “drip pricing” set to take effect on July 1, 2024.  These new guidelines are particularly helpful in detailing how companies in the hospitality and restaurant space can avoid running afoul of the new law.

As a reminder, SB 478, sometimes referred to as the “Honest Pricing Law" or the “Hidden Fees Statute”, revises applicable Civil Code provisions ...

According to the California Department of Aging, more than 200,000 older and dependent adult abuse cases are reported each year. Many more cases certainly go unreported.

Lawyers and clients often have the misconception that the California financial elder abuse statute, Welf. & Inst. Code § 15610, et seq., applies only where there is some bad faith conduct committed by an alleged wrongdoer defendant. This is not the case. In 2008, the Legislature replaced the “bad faith” standard with a different requirement to establish whether the defendant “knew or should have known of ...

As we previously reported, the California Legislature amended several statutes regulating employer workplace safety policies, including existing injury and illness prevention plans, to also include a new, separate requirement for a “Workplace Violence Prevention Plan.” With few exceptions, California employers must have such a plan in place by July 1, 2024. 

Cal/OSHA has promulgated an initial set of standards and a model template for such a plan, which can be found here. These standards must be submitted to the Occupational Safety and Health Standards Board (OSHSB) by no ...

Q: I was appointed receiver over a manufacturing facility. I operated it for a short time and then obtained court authority to sell it. I netted $1.4 million from the sale. The landlord agreed I could pay it the rent I owed from the net proceeds and is owed $600,000. All good, except I just learned the IRS is owed $1 million. I know receivers can incur personal liability if they pay creditors ahead of owed taxes. Do I have to pay the IRS ahead of my cooperative landlord?

A: No. What is known as the Federal Priority Act (31 U.S.C. §3713) mandates that representatives of insolvent estates, including ...

Despite its best efforts, the California Legislature has been unable to substantially curtail the popularity of employment arbitrations in California.  The hostility to employment arbitration remains evident, however, among the California courts.  This is illustrated by the recent decision of the California Court of Appeals in Vazquez v. SaniSure, Inc.

In Vazquez, an employee was initially hired by an employer for almost two years between 2019 and 2021.  During this period of employment, she was required to sign a binding arbitration agreement. The agreement provided that ...

The facts are frequently the same. A company that has retained the services of a vendor receives an authentic-looking email from the vendor’s CFO which advises that the vendor has changed its bank account or method of payment. Believing that the email is genuine, the company wires funds as directed by the vendor’s CFO. It then turns out that a hacker has impersonated the vendor’s CFO and the company’s payment has gone to an overseas account controlled by the vendor.

In due course, the vendor sues the company demanding payment. The question then arises whether the company’s ...

Despite the U.S. Department of Homeland Security issuing a revised version of Form I-9, Employment Eligibility Verification, last year, many employers continue to use an outdated version of the form. The current version of Form I-9 can be found here.  

Employers must use the revised Form I-9 for all new hires, reverifications and rehires. The changes made to the I-9 form include the reduction of length to one page, more clear instructions, and guidance on acceptable receipts and the auto-extension of some documents, as found on the Lists of Acceptable Documents.

An employer that used an ...

Most private employers with at least 100 employees and federal contractors with at least 50 employees are aware of federal job pay data reporting requirements. Specifically, these employers are required to provide to the Equal Employment Opportunity Commission (EEOC) an EEO-1 Component 1 report that provides employee data from the prior year by employee job category, as well as sex and race/ethnicity. However, these employers may not be aware that California has additional pay data annual reporting requirements which exceed those set forth in the EEO-1 Component 1 ...

On March 15, 2024, the newly appointed Fast Food Council (the “Council”) held its first public meeting in the State Building in Oakland.

The Council was created as part of Assembly Bill 1228, the FAST Recovery Act. The Council has the power to establish minimum standards for fast food workers, including standards for working hours, working conditions, and health and safety.

The Council is comprised of eleven members, nine voting members and two non-voting members. The members are: Nick Hardeman (Chair), Michaela Mendelsohn, Anneisha Williams, Joe Johal, SG Ellison, Richard ...

On March 25, 2024, Governor Newsom signed Assembly Bill 610 into law. AB 610 will exempt some businesses from needing to comply with the Fast Recovery Act. The Fast Recovery Act includes an increase in minimum wage for certain fast food establishment employees which will go into effect next week on April 1, 2024.

More specifically, the FAST Recovery Act sets the minimum wage for fast food workers in chains with more than 60 locations across the country at $20/hour. Approximately 500,000 workers will be affected by the wage increase. In addition to the wage increase, the FAST Recovery Act ...

On March 18, 2024, the Supreme Court of the United States (the “Supreme Court”) denied a petition for writ of certiorari brought by McDonald’s USA, LLC (“McDonald’s”).

McDonald’s had asked the Supreme Court to review a decision by the 7^th Circuit Court of Appeals to allow a class action lawsuit claiming that it violated antitrust laws by prohibiting franchises from poaching employees from other McDonald’s restaurants. The lawsuit alleged that the no-poach provisions artificially reduced workers’ wages by limiting their ability to move from one franchise to ...

On February 22, 2024, a panel of judges for the United States Court of Appeals for the Ninth Circuit issued an unpublished opinion upholding enforcement of a National Labor Relations Board (“NLRB”) order holding that a restaurant, Grill Concepts Services, Inc. (“Grill Concepts”) violated the National Labor Relations Act by refusing to bargain in good faith with the UNITE HERE Local 11 union. The panel granted NLRB’s petition for enforcement and denied Grill Concepts’ petition for review.

NLRB alleged that Grill Concepts engaged in a course of bad faith conduct between ...

On February 21, 2024, Los Angeles County filed a complaint for injunctive relief and damages against Grubhub alleging that the company engaged in false and deceptive advertising and unfair business practices that harm consumers, delivery drivers, and restaurants. The lawsuit was filed by the office of County Counsel. The County’s press release announcing the lawsuit states that it was filed “in response to complaints from consumers and restaurant owners.”

The unlawful business practices alleged in the complaint include:

• Bait-and-switch delivery pricing, in which ...

On February 26, 2024, the Federal Trade Commission (“FTC”) issued an administrative complaint and authorized a lawsuit in federal court to block Kroger Company’s proposed $24.6 billion acquisition of the Albertsons Companies, Inc. The acquisition would be the largest supermarket merger in United States history.

The complaint was made pursuant to the agency’s authority under the FTC Act, and alleges that the proposed acquisition is anticompetitive. Nine attorneys general joined the FTC in filing the complaint.

The FTC’s complaint alleges that the ...

In 2022, Congress enacted the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act” (the “Act”) which provides that, at the election of the person alleging conduct constituting a sexual harassment dispute or sexual assault dispute, “no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the sexual assault dispute or the sexual harassment dispute.”  (9 U.S.C. § 402).       

The California Court of Appeals recently ...

The California Court of Appeals recently revisited the issue of the draconian deadline for paying arbitration fees established by California Code of Civil Procedure section 1281.97.  In Suarez v. Superior Court of San Diego County, the new twist that prompted appellate court review was that the 30-day grace period to pay the arbitration fees ended on January 1, 2023.  Because January 1, 2023 was a holiday, the employer argued that the arbitration payment deadline was extended by statute under Code of Civil Procedure sections 12 and 1010.6.

More specifically, and among several ...

Until recently, California courts were split on whether Private Attorneys General Act (“PAGA”) claims could be dismissed for a lack of “manageability” – referring to the practicality of effectively conducting a trial on the issues.  Like class actions, PAGA actions generally purport to represent a significant number of an employer’s current and former employees.  However, there are important distinctions between class and PAGA actions, which caused California’s appellate courts to issue conflicting opinions on how PAGA cases should be adjudicated.  The ...

As part of a focused effort by the California Legislature to protect employees from unenforceable non-compete clauses and agreements and increase fair competition among employers in 2024, Assembly Bill 1076 enacted Business and Professions Code section 16600.1.

In addition to any other Valentine’s Day plans that employers may have, all employers that provided any agreement with an unlawful non-compete clause or otherwise executed an unlawful non-compete agreement with its employees who were employed after January 1, 2022 must provide written notice to each employee or ...

On January 25, 2024, the U.S. Food and Drug Administration (“FDA”) announced a new website listing regulations that its Foods Program plans to publish by October 2024 and longer-term regulations it is prioritizing for publication at a later date.

FDA also updated the list of guidance topics that it is considering and expects to publish by the end of 2024. The following five topics have been added to the list of guidance documents the FDA expects to publish by the end of December 2024:

• Notifying FDA of a Permanent Discontinuance in the Manufacture or an Interruption of the Manufacture ...

For parties facing class action lawsuits, where the class seeks to recover for economic losses, there may still be opportunities for insurance coverage. Thus, where economic losses arise out of the purchase of products that have the potential for causing bodily injury, insurance coverage, at least for purposes of the duty to defend, may well be available.

Two fairly recent cases take up this scenario and both affirm coverage, at least for purposes of the duty to defend. Coverage was affirmed even though the relief sought in the class action complaints was solely for damages occasioned ...

Many California state statutes are applied based on the number of persons employed by an employer employee count.  Unfortunately, there are a number of these laws, including statutes establishing employee leaves of absence requirements, that do not specify which employees must be counted to determine if the law applies to a particular employer.  A recent state guidance regarding the 2023 state pay transparency statute, which requires the inclusion of a pay scale in job postings by employers with at least 15 employees, but which law does not specify who must be included in the count ...

Commencing on June 1, 2024, Senate Bill 525 will raise the minimum wage for covered health care workers at covered health care facilities in California. A “covered health care facility” as further defined by various statutes, is:  a facility or other work site that is part of an integrated health care delivery system; a licensed general acute care hospital; a licensed acute psychiatric hospital; a special hospital; a licensed skilled nursing facility, if owned, operated, or controlled by a hospital or integrated health care delivery system; a patient’s home when health care ...

Effective January 1, 2024, California’s Assembly Bill 647 will expand recall rights for grocery workers when there is a change of control in a grocery establishment.  Prior to AB 647, existing law required an incumbent grocery employer to provide, within 15 days of execution of a transfer document, a list of eligible grocery workers. Successor grocery employers were then required to maintain a preferential hiring list of these eligible grocery workers and hire from that list for 90 days. This law did not apply to grocery stores that had ceased operations for 6 months or more before the ...

Q: I am a defendant in a receivership, where the receiver has moved to sell my property. If the court approves the sale,
I want to appeal. My attorney says an order approving the sale cannot be directly appealed and I will have to wait until the end of the case, which could be years from now. Is this correct?

A: It depends on whether your case is in federal or state court. In the Fifth Circuit case SEC v. Barton, 2023 WL 4060191, the defendant appealed the district court’s order approving the receiver’s sale of the defendant’s home, for the purpose of recouping funds for defrauded ...

As reported here, California recently took steps to provide employers additional tools to combat workplace violence, including requiring a written workplace violence prevention plan, by enacting Senate Bill 553.  Effective January 1, 2025, Senate Bill 428 makes further changes to existing procedures for workplace violence restraining orders, and creates limitations to prevent employers from using such orders to restrict labor-related speech and activities. These changes are codified as section 527.8 of the Code of Civil Procedure.

Employers in California may ask for a court ...

During the height of the COVID-19 pandemic in 2020, California enacted a temporary right to recall for hospitality employees, codified as Labor Code section 2810.8 (see our related post describing the law here). This law covers laid-off employees who were employed for the 6 or more months preceding January 1, 2020, and whose layoff was due to a reason related to the COVID-10 pandemic. The law was scheduled to expire on December 31, 2024.

Covered employers include hotels with fifty or more guest rooms, airport hospitality operations and service providers, certain event centers, and ...

California’s COVID-19 notice requirements under California Labor Code § 6409.6, requiring employer notice to employees of COVID-19 exposures in the workplace, will expire at the end of 2023.

However, although these state notice requirements will expire, under Cal/OSHA’s COVID-19 non-emergency regulations, employers must still notify employees and independent contractors who had a close contact with a COVID-19 case, as well as any employer with an employee who had a close contact, as soon as possible.  Local health department requirements may also apply.

The end of 2023 ...

The California Office of Administrative Law approved the California Civil Rights Council’s proposed amendment to the California Fair Chance Act, effective October 1, 2023. In addition to providing employers with further guidance on how to handle job applicants with a criminal history, the amendment also expands which employers and job applicants fall under the scope of the FCA.

Originally enacted in 2018, the FCA aims to remove unnecessary difficulties for individuals with criminal backgrounds to find employment. Specifically, the FCA prohibits an employer with five or more ...

Under the National Labor Relations Act (NLRA), employees have “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”  In Stericycle, Inc., 372 NLRB No. 113 (2023), the National Labor Relations Board (NLRB) adopted a new, stricter standard for assessing workplace policies for the purpose of protecting these employee rights.  Under the new standard, a work rule is ...

Earlier this year, the Equal Employment Opportunity Commission (EEOC) and Department of Labor, Wage and Hour Division (WHD) entered into a memorandum of understanding “to maximize and improve the enforcement of” the laws administered by the two agencies.  The purpose of the MOU is to foster better collaboration between the agencies through “information sharing, joint investigations, training, and outreach.”

Taking immediate effect, the organizations have agreed to broader information and data sharing between each other.  Notably, either organization “may share ...

Since 2011, the Wage Theft Prevention Act has required California employers to provide certain written information to new employees at the time of hiring and within seven days of any change. The Labor Commissioner provides a form Notice to Employee Labor Code Section 2810.5 for this purpose. 

Beginning January 1, 2024, Assembly Bill 636 will amend Labor Code 2810.5 to require employers to include in the 2810.5 Notice information regarding any federal or state emergency or disaster declaration issued within 30 days before hire that applies to the county or counties in which the ...

Unfortunately, incidents of workplace violence are taking place with increasing frequency.  In an effort to give employers additional tools to combat these issues, the California Legislature has given us Senate Bill 553.  Effective January 1, 2024, SB 553 amends Code of Civil Procedure section 527.8 to permit any employer that employs someone who has suffered unlawful violence or a credible threat of violence from any individual that can reasonably be construed to be carried out or to have been carried out at the workplace to seek a temporary restraining order on behalf of the employee ...

Q: I was involved in a now closed receivership. I want access to some of the records of the entity that was in receivership and some emails and information I believe was sent to the receiver or her counsel. I contacted the former receiver. She said the entity’s records she had have been destroyed and if I want emails or information she or her counsel have, I would have to subpoena them and pay for the cost of locating and producing the items. Is this appropriate?

A: Probably. It depends on what the order approving the receiver’s final account and report, or other orders, state about record ...

The California Legislature recently passed Assembly Bill 933, a bill expanding privileged speech to expressly include communications regarding factual information pertaining to incidents of sexual assault, harassment or discrimination.

Currently, California statutes list specific types of oral and written communications that are privileged and therefore cannot be the basis for a claim of defamation against the speaker.  Privileged categories include, among other things, statements made in pursuit of a lawsuit or made in the proper discharge of an official duty.  ...

The National Labor Relations Board recently issued a final rule broadening who may be considered a joint employer of another employer’s employees under the National Labor Relations Act.

Under the former rule, passed in February 2020 during the Trump administration, an entity is considered a joint employer of a separate’s employer’s employees only if the two employers “share or codetermine the employees’ essential terms and conditions of employment, which are exclusively defined as wages, benefits, hours of work, hiring, discharge, discipline, supervision, and ...

Civil Code section 2860 authorizes the retention of independent counsel in the event a conflict of interest arises between the insurer and its insured. Under the statute a conflict of interest is deemed to arise “when an insurer reserves it rights on a given issue and the outcome of that coverage issue can be controlled by counsel first retained by the insurer for the defense of the claim”. Section 2860(b).

But what happens if, in the absence of insurer appointed counsel, the insured selects counsel to defend the claim, with the insurer’s acquiescence? In that circumstance, is the ...

The California Privacy Protection Agency (“CPPA”) has unveiled draft regulations regarding AI and automated decision-making technologies.  AI and automated decision-making encompasses systems leveraging machine learning, statistics, and data processing to evaluate personal information.  Such technologies not only aid in human decision-making, they also involve individual profiling capabilities, which triggers a potential need to safeguard privacy rights.  The draft regulations include, among other things, provisions for providing notice of AI technology use ...

        Employee claims of retaliation in the workplace have been on an upward trend since the California Legislature amended Labor Code section 1102.5 to include protections for whistleblower complaints made directly to a person with authority over the complaining employee or to another employee with authority to investigate the claims alleged.  Senate Bill 497, which goes into effect on January 1, 2024, will serve to permit claims for employees alleging retaliation in the workplace under not only Labor Code section 1102.5, but also sections 98.6 (engaging in protected activity related ...

            Over the past few years, this blog has followed the California Legislature’s concerted efforts to vitiate employment arbitrations in the state.  Senate Bill 365 is the next in line.  This bill amends Code of Civil Procedure section 1294(a) to state that, while an aggrieved party may appeal from an order dismissing or denying a petition to compel arbitration, “the perfecting of such an appeal shall not automatically stay any proceedings in the trial court during the pendency of the appeal.” (Emphasis added). 

            Although a small change to a short statute, the effects may be ...

Passed in 2022 and effective January 1, 2024, Assembly Bill 2188 creates Government Code section 12954 to 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 metabolites in their urine, hair, blood, urine, or other bodily fluids.

Now Senate Bill 700, which will also become effective ...

On October 8, 2023, California Governor Gavin Newsom signed Senate Bill (“SB”) 476. The law will go into effect on January 1, 2024.

Employees of retail food facilities are already required to obtain a food handler card and maintain that card for the duration of their employment. SB 476 requires employees to compensate the training and food handler examination time as “hours worked” for which the employer would pay. Employers must also reimburse the employee for all costs associated with obtaining a food handler card. Lastly, employers must relieve the employee of all other ...

California Senate Bill (“SB”) 848, which becomes effective on January 1, 2024, entitles employees to five days of leave following a reproductive loss event. SB 848 adds section 12945.6 to the Government Code and applies to employers with five or more employees. Employees are eligible for the leave if they have worked for the employer for at least 30 days before suffering the reproductive loss.

SB 848 defines “reproductive loss event” as “the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful ...

          The California Legislature has sought in recent years to expand the rights of employees in nearly every facet of business in California.  Employer restrictions on an employee’s ability to work in the same industry after employment ends have been no exception.  As a result of the 2023 legislative term, two bills limiting post-employment restrictions on employees. In addition to Senate Bill 699, which voids noncompete agreements of out-of-state employee seeking work in California, Assembly Bill 1076 was signed into law. 

            AB 1076 amends Business Code Section 16600 and creates ...

Senate Bill 616, which was signed into law by Governor Newsom this month, amends existing law regarding paid sick leave to California employees. 

The Essentials:

Beginning January 1, 2024 –

• The number of paid sick days per year will be increased to 40 hours or 5 days, whichever is greater (increased from 24 hours or 3 days).
• Employers may cap an employee’s use of paid sick leave to 40 hours or 5 days in each year of employment, calendar year, or 12-month period (increased from 24 hours or 3 days).
• Employers may cap paid sick leave carryover accrual at 80 hours or 10 days, whichever is greater ...

After years of debate, and a looming referendum, a compromise between labor and business representatives has resulted in a final law regulating the fast-food industry. On September 28, 2023, California Governor Gavin Newsom signed Assembly Bill (“AB”) 1228 into law. AB 1228 is a compromise version of the Fast Food Accountability and Standards Recovery Act, a law that initially became effective on January 1, 2023, but them became the subject of a referendum which halted enforcement.  Now that AB 1228 has been enacted, the referendum on the Fast Food Accountability and Standards ...

You may have heard the half-serious joke that California acts as its own independent country.  One example of this is California’s strong disfavor of non-compete agreements, which stands in contrast with the rest of the country which permits these agreements to varying degrees.

California has leaned further into its famed independence with the passage of Senate Bill 699, which will go into effect on January 1, 2024.  SB 699 seeks to strengthen California’s existing ban against non-compete agreements set forth in Business and Professions Code section 16600 which simply states ...

Q: I am a receiver for a corporation, in a case arising out of fraud allegations. I have asserted claims against various insiders. They are willing to settle with me for a significant sum, but only if the court bars investors, customers and vendors from suing them. Can the court issue such a bar order?

A: Maybe. It will depend on the types of claims the third parties possess. The issue of third party releases is a hot topic in bankruptcy. It recently arose in the infamous Purdue Pharma bankruptcy, where the Saclker family agreed to pay $4.55 billion, but only if they were released from any third ...

What goes up continues to go up!  As we pointed out here last year, the trend of increasing the minimum wage continues, as follows:

State:

On January 1, 2024, the California state minimum wage will increase from $15.50 per hour to $16.00 for employers of all sizes, reflecting a 3.5% increase, which is based on the expected rate of inflation.  The state minimum wage also governs the exempt employee threshold salary, which will increase accordingly.  The new minimum salary for employees who otherwise qualify to be exempt from overtime will be $66,560 annually for employers of all sizes.

On September 1, 2023, the California legislature passed Assembly Bill (“AB”) 418, the California Food Safety Act.

If the law is passed, then any person or entity will be prohibited from manufacturing or selling a food product for human consumption containing specified food additives. The banned additives include brominated vegetable oil (CAS no. 8016-94-2); potassium bromate (CAS no. 7758-01-2); propylparaben (CAS no. 94-13-3); and red dye 3 (CAS no. 16423-68-0).  The original version of the bill included a fifth additive, titanium dioxide. However, shortly before the ...

On September 11, 2023, industry, government, and union representatives announced that they had reached a deal to remove a California referendum on the Fast Food Accountability and Standards (“FAST”) Recovery Act from the 2024 ballot. The Fast Act has a storied history, commencing with legislation which was scheduled to take effect on January 1, 2023, which prompted a responsive referendum and legal action.    

The compromise bill, Assembly Bill (“AB”) 1228 will increase the minimum wage for fast food workers in the state to $20 an hour in April 2024 if the fast food chain has more ...

Q: In a receivership I just wrapped up, the court approved my final account and report and awarded me final fees. Because there were insufficient funds in estate to pay my fees in full, the court ordered the defendant to pay my outstanding approved fees. The defendant, however, has not paid me. Am I entitled to interest on my outstanding fees even though I don’t have a judgment?

A: Actually, you do have a judgment and you are entitled to interest on your unpaid fees. As explained in a prior Ask the Receiver, “judgment” is defined differently in different sections of the Code of Civil ...

On August 15, 2023, a panel of judges for the United States Court of Appeals for the Ninth Circuit revived a class action lawsuit against Nestle regarding its “Premier White Morsels” Toll House product.  In the opinion, Prescott v. Nestle USA, No. 22-15706, the court vacated the district court’s ruling and asked the court to reconsider its decision in light of the California Court of Appeal’s decision in Salazar v. Walmart, Inc., 83 Cal. App 5^th 561 (2022).

Plaintiffs alleged that Nestle violated California state law, including the Unfair Competition Law (“UCL” ...

Companies reporting liability insurance claims need to be aware that the pertinent rules vary depending on whether a policy is “claims made and reported” or “occurrence”.

Most, if not all, Directors and Officers and Errors and Omissions policies are written on a claims made and reported basis. By contrast, Commercial General Insurance, or CGL insurance, is written on an occurrence basis. Under a claims made and reported policy, a claim must have arisen and been reported during the same policy period. By contrast, under an occurrence policy, the claim may be reported long ...

With the stated purpose of providing protection to freelance workers who may struggle to receive timely and full payment for their services, the city of Los Angeles has established an ordinance which will require hiring entities to have a written contract with any freelance worker for services valued at $600 or more in a calendar year.  Titled the “Freelance Worker Protections Ordinance”, the legislation establishes specific rights and remedies for freelance workers which could prove costly to uninformed employers. 

As defined by the ordinance, a “hiring entity” is any ...

On August 9, 2023, the Food and Drug Administration (“FDA”) announced a direct final rule revoking certain uses of partially hydrogenated oils (“PHOs”) in food.  The rule will go into effect on December 22, 2023. Any comments to the rule must be submitted by October 23, 2023.

The rule removes PHOs as an optional ingredient in the standards of identity for peanut butter and canned tuna. It also revises FDA's regulations affirming food substances as generally recognized as safe pertaining to menhaden oil and rapeseed oil to no longer include partially hydrogenated forms of these ...

On August 14, 2023, a panel of judges for the United State Court of Appeals for the Ninth Circuit issued a published opinion affirming dismissal of two complaints alleging that food product labels advertising the amount of protein in products were false and misleading under federal and state law. The panel held that the claims were preempted by FDA regulations.

In Case No. 22-15377, the panel ruled on two related cases, Nacarino v. Kashi, and Brown v. Kellogg. The plaintiffs in both cases argued that the protein claim on Kashi and Kellogg’s labels were false because the nitrogen method ...

On July 21, 2023, the United States Court of Appeals for the Ninth Circuit affirmed a district court order denying Domino Pizza’s motion to compel arbitration in a putative class action brought by plaintiff Dominos truck drivers who alleged that Domino’s had violated California labor law.

The decision in Carmona v. Domino’s Pizza, No. 21-55009 involved an analysis of the Federal Arbitration Act. A Ninth Circuit panel had previously affirmed the denial of the motion to compel, but the United States Supreme Court granted certiorari, vacated the panel’s decision and remanded ...

Following the United States Supreme Court’s landmark ruling in Moriana v. Viking River Cruises, California courts were tasked with the open question of whether an “aggrieved” employee whose individual Private Attorneys General Act (PAGA) claims are subject to an arbitration agreement has standing to represent other similarly aggrieved employees in Superior Court.  In Adolph v. Uber Technologies, Inc., the California Supreme Court answered that question in the affirmative; a representative employee’s standing to represent others is not affected by any existing ...

Q: I was appointed state court receiver over a corporation. There are a number of pending lawsuits against the corporation. At the current time, there are few liquid assets and I would rather not use them to defend the lawsuits. Can the receivership court stay the lawsuits and require the claims be dealt with in a claims procedure in the receivership case?

A: It depends. The pivotal issue is whether the case you were appointed in is an action (C.C.P §22) or a special proceeding ( C.C.P. §23). The distinction is important because C.C.P. § 526(b)(1) prohibits an injunction: “to stay a ...

The Court of Appeal of the State of California recently held in Thai v. IBM, A165390, that employers are obligated to reimburse expenses incurred by employees working from home if those expenses are a consequence of the employee’s job duties, even if those expenses were caused by state stay-at-home COVID orders rather than by the employer.

Plaintiff Paul Thai (“Thai”) is a former IBM employee whose regular job duties required internet access, telephone service, a computer, and a headset. On March 19, 2020, California Governor Gavin Newsom signed Executive Order N-33-20 (the ...

On June 29, 2023, the Supreme Court of the United States unanimously held in Groff v. DeJoy, No. 22-174, that Title VII of the Civil Rights Act of 1964 (“Title VII”) requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs that would affect the conduct of the employer’s business.

U.S. Post Office employee Gerald Groff is an Evangelical Christian who believes that Sunday should be devoted to worship and rest.  Groff had been a USPS employee since 2012. At the time he started, the USPS ...

On July 6, 2023, the U.S. Food and Drug Administration (“FDA”) released an updated list of draft and final topics that the agency anticipates publishing guidance documents for by the end of December 2023.

The guidance topics on labeling issues include:

• Foods Derived from Plants Produced Using Genome Editing;
• Menu Labeling Supplemental Guidance;
• Labeling of Plant-Based Alternatives to Animal-Derived Foods;
• Use of Nutrient Content Claims for Added Sugars in the Labeling of Human Food Products

FDA stated: “[w]e currently intend to develop guidance on each topic; however ...

Over the last several years several companies, including Marriott, Yahoo and Volkswagen, have been victimized by hackers breaking into a company’s computer network. In some cases, they have put confidential information on the internet. In others, 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 companies and their directors for data breaches suffered by their vendors or service providers. This is ...

On June 27, 2023, the federal Pregnant Workers Fairness Act (“PWFA”) went into effect.  The law requires employers with 15 or more workers to provide “reasonable accommodations” to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an “undue hardship.”

The PWFA does not replace federal, state, or local laws that are more protective of workers affected by pregnancy, childbirth, or related medical conditions. These laws have been passed in approximately 30 jurisdictions ...

On June 30, 2023, the Federal Trade Commission (“FTC”) announced that it would be publishing a notice of proposed rulemaking on the use of consumer reviews and testimonials.

The proposed rule follows FTC’s November 2022 Advance Notice of Proposed Rulemaking. The FTC voted 3-0 to approve the notice of proposed rulemaking, which will be published in the Federal Register and open to public comment.

Specific practices that would be prohibited under the proposed rule and subject to FTC fines or enforcement action include:

• Selling or Obtaining Fake Consumer Reviews, Consumer ...

On June 1, 2023, a panel of judges for the United States Court of Appeals for the Ninth Circuit held that berry distributors were not liable as “client-employers” of agricultural workers. The plaintiff agricultural workers had been hired by strawberry growers to pick fruit that was then turned over to defendants Red Blossom Sales, Inc. and Better Produce, Inc. for distribution.

In 2018, the strawberry growers stopped paying the plaintiff agricultural workers and filed for bankruptcy. The plaintiffs then sued the distributor defendants as joint employers and client ...

On June 26, 2023, a panel of judges for the United States Court of Appeals for the Ninth Circuit affirmed an insurance company’s win over a restaurant group seeking insurance coverage for pandemic-related claims in Team 44 Restaurants, LLC v. American Insurance Company, No. 22-15403.

Plaintiffs owned various individual restaurants, who sought insurance coverage under business insurance policies. The defendant insurance companies denied coverage for COVID-19 losses under government shutdowns, on the basis that there was no direct physical loss to the restaurants.

The ...

On June 14, 2023, the U.S. Department of Agriculture (“USDA”) announced that it was implementing a multi-step effort to strengthen the substantiation of animal-raising claims. Animal-raising claims are voluntary marketing claims that highlight aspects of how the source animals used for meat and poultry are raised. These claims include “grass-fed,” “free-range,” or “raised without antibiotics.”

Currently, these claims must be approved by USDA’s Food Safety and Inspection Service (“FSIS”) before they can be included on labels sold to consumers.  ...

A genuine looking email is sent to a company’s accounts payable department with instructions from its president to pay money to a certain account. The “To” and “From” headers and the signature block look identical to hundreds of emails previously received by the department from the company’s president. In reliance on the email, money is wired to the designated account. It later turns out the email was fake and the company’s money was wired to a fraudster’s account.

In another scenario, the company’s accounts payable department receives an email purportedly from a ...

Q: I was appointed receiver for some major assets owned by a corporation. I just learned the corporation has filed bankruptcy. I know I have to eventually turnover the assets I have. Can I wait to see if the bankruptcy sticks or if a trustee is appointed? Can I demand the corporation pay for the cost of my turning over the assets?

A: No and no (although you may have a claim for the cost). As most receivers know, if a bankruptcy is filed that involves an entity or assets in receivership, the receiver must turnover any property of the debtor in the receiver’s possession to the debtor or, if one is ...

On July 1, 2023, a number of local municipalities and the County of Los Angeles will be raising their hourly minimum wage, based on changes to the consumer price index, and as required by local minimum wage ordinances. Beginning July 1, 2023, the following increases will apply to employers in the designated areas:

In addition, on July 1^, 2023, all businesses in the City of West Hollywood, including smaller businesses and hotel employers, will be required to raise the hourly minimum wage to $19.08.  In the past several years, the City of West Hollywood’s minimum wage and corresponding ...

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 ...