Call For A Consultation 855-997-7522
Tiny Company Logo Publication

Poole & Shaffery, LLP
Sidebar Issue 74 | January 2017

Poole & Shaffery, LLP is a full service business law firm with 20 plus attorneys located throughout the State of California who focus on a variety of different areas of litigation, counseling and business related transactional services, including: employment law counseling; defense of employment related lawsuits; all manners of business litigation and mediation; business contracts and transactions including business formation, franchise operations, business sale, mergers and acquisition; non-profit and tax-exempt organizations; estate planning, probate and trust administration; securities registration and compliance; construction law, land use and development; government affairs (registered lobbyist in Sacramento, CA; County of Santa Clarita and City of Santa Clarita, CA); real estate transactions and litigation; intellectual property matters including trade secrets, copyrights, trademark, cyber security and data breach; insurance law and extra contractual litigation; product liability; premises liability; and trucking and transportation claims.

Disclaimer: The articles contained herein are intended for general information purposes only. Nothing contained in this document is legal advice, nor should it be relied upon as such.

Santa Clarita
San Francisco
Santa Clarita
Walnut Creek
Orange County
San Diego
Tel.: (855) 997-7522

By: Brian E. Koegle
New Laws for a New Year – 2017 Edition

It seems that the resounding sentiment at the end of last year was that 2016 was a pretty crummy year. An inordinate number of celebrity deaths, horrific acts of terrorism worldwide, and a contentious presidential election cycle left many with a bad taste in their collective mouths. However, as we look forward, with a "fresh start" and a new year ahead, California businesses are left to wonder if 2017 will be as difficult as 2016. Among the 898 bills Governor Brown signed into law in 2016, there were very few significant regulations which would affect California employers. However, where the state legislature left off, municipal government entities, administrative agencies and the courts have picked up the slack, which means that small businesses will continue to feel the pain into 2017 and beyond! The following is a brief summary of the new laws, regulations and court opinions that will change the landscape for California employers in 2017:

Minimum wage laws

While a Texas judge stopped the nationwide increase in the minimum salary for exempt employees (original article found here), California was not granted a reprieve for the increase in the statewide minimum wage which became effective on January 1, 2017. For all businesses with 26 or more employees, the statewide minimum wage increased to $10.50/hour, while smaller companies (≤25) will remain at $10.00/hour until January 2018. Complicating matters, though, are the state's largest cities/counties which are also scheduled to increase minimum wages during the 2017 calendar year, on their way to a $15.00/hour minimum wage by 2020. On July 1, 2017, San Francisco will see its minimum wage increase to $14.00/hour while the City of Los Angeles and unincorporated business sectors of Los Angeles County are set to increase minimum wage for employers with 25 or more workers to $12.00/hour. A table explaining the different minimum wage rates throughout L.A. County can be found here. San Diego sits at $11.50/hour, and – not to be outdone by its Bay Area neighbors – Oakland has set a peculiar minimum at $12.55/hour. Depending on where the worker is performing his duties (for a period as short as two hours in any given workweek), the rate of pay may fluctuate.

While the lowest wage earners will certainly be affected by these minimum wage increases, it is also important to note that these increases have a "trickle up" effect, influencing the minimum salary of even salaried, exempt employees. Most of the statewide "white collar" exemptions set forth in the California Industrial Wage Commission Wage Orders, require an employee to earn no less than double the state minimum wage in order to qualify as exempt (e.g. no obligation for an employer to pay overtime). This would equate to a pay raise of more than $2,000.00 per year in order for exempt employees to maintain their status.

Mandatory Sick Leave

Another convoluted state vs. city vs. county variance in the law is in the relatively new sick leave requirements. The cities of Los Angeles and San Diego require accrual of forty-eight (48) hours of paid sick leave annually, compared to the 24-hour cap permitted by state law. Unincorporated areas of Los Angeles County will have a similar plan in early 2017. San Francisco, Oakland, Santa Monica and Long Beach each have their own unique rules on this issue as well. Again, the location of where the worker performs services dictates which regulation will apply for the calculation of sick pay.

Sexual Harassment Policies

The Fair Employment and Housing Commission (FEHC) issued new regulations, effective April 1, 2016, which require certain information to be included in every employer's harassment prevention and reporting policies. In addition to distributing the DFEH brochure on harassment prevention to employees (Form DFEH 185), employers must now also: (1) communicate their specific policies in writing; (2) list the categories of individuals protected by the Fair Employment and Housing Act (FEHA), (3) provide a specified complaint procedure to ensure that complaints are kept confidential (to the extent possible), responded to in a timely manner, investigated by "qualified personnel" in a timely and impartial manner, documented and tracked; (4) advise and instruct supervisors on reporting procedure for any complaints of misconduct; (5) provide that allegations of misconduct will be addressed in a fair, timely, and thorough investigation; (6) instruct employees that if misconduct is found during the investigation, appropriate remedial measures will be taken; and, (7) ensure that there will be no retaliation against employees for lodging a complaint or participating in an investigation. If your policy does not address all of these issues clearly, this would be a great time to review and revise your handbook.

New Form I-9 for Employee Eligibility Verification

Effective November 2016, and mandatory as of January 22, 2017, a new Form I-9 (Employment Eligibility Verification form) was issued by the U.S. Customs and Immigration Service (USCIS). The form is designed to streamline the verification process, in order to avoid "technical errors" in form completion, which (theoretically) will reduce the number of fines issued to employers for non-compliance. The new "smart" form (online application only) allows for fillable drop-down menus in several key areas where errors occur. A paper copy of the form is still available, but it does not provide any of the new "smart" features. The USCIS also updated the instruction on correct completion of the Form I-9, as part of the new form, which can be found here.

"Associational" Disability Discrimination

In a very peculiar case, a California court of appeal significantly expanded the duty for employers to provide reasonable accommodations to its employees, adding protections for those who are associated with a disabled person. Castro-Ramirez v. Dependable Highway Express Inc. (2016) 2 Cal.App.5th 1028. In that case, Mr. Castro-Ramirez was the caretaker for his ill son, who required nightly dialysis. For years the employer accommodated his request for a modified work schedule to accommodate his son's needs, but a new supervisor, who was initially unaware of the son's condition, changed that accommodation. After Mr. Castro-Ramirez was terminated for refusing to return to the original work schedule, he brought a claim stating that his association with his son (a disabled individual under both the ADA and FEHA definitions) was the reason behind the decision to terminate. The appeals court agreed. In December, the California Supreme Court denied the opportunity to review this decision, effectively making the appellate court decision the "law of the land." As such, employers should make sure that they are engaging in the mandatory "interactive process" when an employee requests a reasonable accommodation arising out of an "associated party's" disability, and should be cognizant of these issues when making critical employment decisions (e.g. promotion or termination of employment), as the newly created protected class is also a basis for an employment retaliation claim.

These are only some of the highlights from the 2016 year that was. For more information on these, and other new topics in the law, please be sure to join the Poole & Shaffery team during the annual Employment Law Update presentation on Tuesday February 21, 2017 at noon at the Hyatt Regency Valencia. Please visit for further details, or to purchase tickets. As always, this information is intended to flag issues in the law for California employers. It does not replace or substitute comprehensive legal advice which can be provided by competent legal counsel with experience in the employment law arena. We encourage you to contact counsel for a more detailed analysis. Happy New Year!

Click here to view the entire article

By: Chris S. Jacobsen
Minutes From Your Company's January Annual Meeting

The annual meeting of the Board of Principals of Your Company, a California business entity, was duly held at the principal executive office of Your Company on January 18, 2017 at 9:00 a.m. Your Company recognizes the importance of conducting yearly reviews of its business, financial and legal affairs. Accordingly, Your Company called this annual meeting to address financial and tax matters of the prior year, the sufficiency of its insurance, changes in employment and related laws, Your Company's intellectual property, Your Company's ownership succession planning, and other important matters to be considered as Your Company prepares to conduct business in the new year.

The following Principals were present at the meeting:

Your President

Your Treasurer

Your Secretary

No Principals were absent.

Your President presided as Chairman of the meeting and Your Secretary acted as secretary of the meeting. The Chairman called the meeting to order and announced that, since all Principals of Your Company were present at the meeting and none object to the lack of or inadequacy of notice, notice of the holding of the meeting was deemed waived. The Chairman noted that in excess of a majority of the Principals of Your Company were present and the meeting therefore had a quorum as required by the Bylaws of Your Company.

Financial Statements & Taxes

The Chairman then announced that the first order of business was Your Company's financial statements and taxes. After discussion, on motion duly made, seconded and unanimously carried, the following resolutions were adopted:

RESOLVED, that Your Company shall promptly deliver annual reports, financial statements and tax preparation information to the owners of Your Company;

RESOLVED FURTHER, that Your Company pursue its tax return preparation (before the eve of the filing deadline) and consider the adequacy of its current accounting methods, policies and systems; and

RESOLVED FURTHER, that the officers of Your Company are authorized and directed to consult with Your CPA, Your Company's accountant, to carry out the foregoing resolutions.

Insurance Matters

The Chairman then turned to the next order of business, Your Company's insurance. After discussion, on motion duly made, seconded and unanimously carried, the following resolution was adopted:

RESOLVED, that the officers of Your Company are authorized and directed to consult with Your Agent, Your Company's insurance agent, to discuss the adequacy of Company's insurance coverages and, in particular: key person life insurance to fund potential buy-outs of owners, and employment practices liability insurance.

Employment Matters

The discussions of the Principals then turned to Your Company's employees. After discussion, on motion duly made, seconded and unanimously carried, the following resolutions were adopted:

RESOLVED, that Your Company shall update its employee handbook to reflect current employee policies and benefits and to address the latest changes in labor and employment law requirements;

RESOLVED FURTHER, that Your Company post updated posters and notices to employees as required by state and federal law;

RESOLVED FURTHER, that the officers of Your Company are authorized and directed to consult with Brian E.Koegle, Your Company's employment attorney, to carry out the foregoing resolution.

RESOLVED FURTHER, that, as an additional incentive to employees, Your Company shall develop plans for the implementation of an employee stock option and purchase plan;

RESOLVED FURTHER, that, in connection with such plan, Your Company shall prepare and file with the California Department of Business Oversight appropriate notices for such issuances of securities to employees, and shall make any similar filings that may be required with the Securities and Exchange Commission; and

RESOLVED FURTHER, that the officers of Your Company are authorized and directed to consult with Claudia J. McDowell, Your Company's securities attorney, to carry out the foregoing resolution.

Intellectual Property

The Chairman then led the Principals in a discussion of Your Company's intellectual property. After discussion, on motion duly made, seconded and unanimously carried, the following resolutions were adopted:

RESOLVED, that Your Company take immediate steps to protect the intellectual property of the business by implementing a system to protect trade secrets, by requiring employee confidential information and invention agreements, and by registering Your Company's trademarks;

RESOLVED FURTHER, that the officers of Your Company are authorized and directed to consult with Jason R. Beaman, Your Company's intellectual property attorney, to carry out the foregoing resolution.

Company Owners

The Chairman then noted that the owners of Your Company did not have buy-sell arrangements in place nor had they discussed business succession plans. After discussion, on motion duly made, seconded and unanimously carried, the following resolutions were adopted:

RESOLVED, that Your Company shall coordinate a meeting of its owners to discuss and agree upon (1) buy-sell arrangements so that efficient transfers of ownership may take place when an owner withdraws, dies or otherwise desires to sell his or her stake in Your Company and (2) a business succession plan so that Your Company will be prepared for changes in management personnel without disruption of its day to day business operations; and

RESOLVED FURTHER, that the officers of Your Company are authorized and directed to consult with M. Lisa Odom, Your Company's corporate attorney, to carry out the foregoing resolution.

Standard Contracts

The meeting then turned to a discussion of Your Company's standard contracts and their continuing adequacy to meet the needs of Your Company. After discussion, on motion duly made, seconded and unanimously carried, the following resolution was adopted:

RESOLVED, that Your Company review and (if necessary) revise its standard forms of contracts, invoices, terms and conditions, and other documents to assure that they are adequate to accomplish the matters for which they are used and to protect Your Company;

RESOLVED FURTHER, that the officers of Your Company are authorized and directed to consult with Chris S. Jacobsen, Your Company's business attorney, to carry out the foregoing resolution.

There being no further business to come before the meeting, upon motion duly made, seconded and unanimously carried, the meeting was adjourned.

Your Secretary,


Click here to view the entire article
Appellate Law
Arbitration and Mediation
Business and Commercial Litigation
Business Transactions
Construction Law
Employment Law
Environmental Law
Estate Planning
General Counsel Services
Intellectual Property
Labor Law
Non-Profit & Tax-Exempt Organizations
Premises Liability
Products Liability
Real Estate and Litigation
Toxic Torts