Page 2 – Adishian Law

“Adishian Law Group has handled several healthcare deals for me over the years and was our sell-side counsel on the IPM transaction. This deal was super complicated and they handled it perfectly for us.”
— IPM, CEO

Adishian Law Group is pleased to announce that Health Care Provider Integrated Pain Management Medical Group, Inc. aka IPM Medical Group has completed its sale to a Private Equity buyer. Terms are confidential.

Health Care Experience and Expertise. Our firm has developed a strong, niche expertise in health care sell-side transactions as well as ongoing outside general counsel work for medical corporations.

Structure is Central to these Transactions. “Structure” is often a critical consideration for the health care acquiror for many reasons: tax, financing, ROI and compliance with the prohibitions against the corporate practice of medicine to name just a few. Entity structure and Financing structure (both in terms of overall capitalization stack and the allocation of consideration) are key aspects of these transaction.

Documents and Work: On behalf of our clients, our firm led the legal work on the transaction from post LOI through Due Diligence and Closing. These transactions are complex. Our work included negotiating, overseeing, reviewing or drafting the following:

Deal Structure and timeline
Unit Purchase Agreement
New Holding Company
Multiple LLC formations (with associated operating agreements)
Stock Repurchase Agreements
MSA Termination Agreement
Sale of non-clinical assets
Personal Goodwill Contribution Agreement
Administrative Services Agreement
Corporate and LLC Resolutions
Stock Power
Restrictive Covenant Agreement
Physical Shareholder Agreements
Independent Contractor Agreements and
many other ancillary agreements

A Word About Our Clients. We feel it is important spotlight the vision and drive required to build an organization to the point where it is ready for exit. Our clients did that. Our clients had the vision, persistence and creative problem solving to build the IPM Medical Group from virtually nothing into perhaps the largest medical group of its kind in Northern California. That is a remarkable effort. Overnight success doesn’t happen overnight. Without the client’s dream, there is no transaction to report.

Choice of Legal Counsel. Every time a client has a choice to retain legal counsel for an M&A transaction it is often a competitive situation. When a client places their faith in us to assist them with accomplishing their major goals it means a lot to us. We’re grateful for their trust and confidence, and for the privilege to contribute our skills to their success.

ABOUT INTEGRATED PAIN MANAGEMENT MEDICAL GROUP, INC.
IPM Medical Group (ipmdoctors.com) is a leader in cutting edge pain management techniques and rehabilitation programs that set the standard in holistic approaches for managing chronic pain. Its doctors are nationally known experts in the field and are deeply involved in clinical research focused on developing the treatment solutions of tomorrow. With seventeen locations in California and services ranging from advanced interventional pain management procedures and psychological support for functional restoration, IPM’s doctors approach each patient with one goal in mind: to help patients return to normal daily activities.

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other M&A Press Releases.

For more information about this transaction, contact Chris Adishian:

This blog post is the latest in our running series covering the ongoing battle over Mandatory Arbitration Agreements in Employment.

To recap, On October 10, 2019, California Assembly Bill 51 (“AB 51”) was signed into law, adding Section 432.6 to the California Labor Code. It prohibits California employers from requiring applicants to sign mandatory arbitration agreements as a condition of employment or in exchange for any employment-related benefit. AB 51 also prohibits employers from retaliating against applicants or employees who refuse to sign mandatory arbitration agreements by terminating their employment or taking other retaliatory actions. Under the law, even and an opt out process is still considered a mandatory arbitration agreement. AB 51 does not apply to agreements that have already been signed before January 1, 2020, and only applies to those dated January 1, 2020, or after. Employers who violate the law as drafted could be subject to injunctive relief, lost wages, attorney’s fees, and a violation is considered a misdemeanor under California Labore Code section 433.

AB51’s Ban on Mandatory Arbitration Agreements was immediately challenged in court

In February 2020, Judge Mueller of the Eastern District of California issued a preliminary injunction (as a result of litigation brought by the Chamber of Commerce of the United States and other business groups. The injunction effectively prevented AB51’s ban on mandatory arbitration from taking effect. This is where our last article left off.

Between our last article and this article, California appealed……and there was the Covid-19 pandemic.

On September 15, 2021, a three judge Ninth Circuit panel held in a split decision that AB 51 is not fully preempted by the Federal Arbitration Act. In the panel’s decision in U.S. Chamber of Commerce et al. v. Rob Bonta et al., case number 20-15291, Judge Fletcher joined Judge Lucero’s majority opinion which concluded that the Federal Arbitration Act (“FAA”) doesn’t preclude arbitration agreements, but merely requires that arbitration agreements between workers and their employers be entered into voluntarily and consensually. Additionally, the panel ruled that the civil and criminal penalties associated with AB 51 “stand as an obstacle to the purpose of the FAA” and declared those aspects of AB 51 preempted by the FAA — in other words not enforceable.

What happened next?

On October 20, 2021, the Chamber of Commerce filed a petition for en banc review by the Ninth Circuit. As a result of this petition being granted, the Ninth Circuit panel’s September 15, 2021, decision to vacate the district court’s preliminary injunction is stayed, and therefore AB 51’s ban on mandatory arbitration agreements is still enjoined pending the outcome of future rulings.

On February 14, 2022, the same three judge Ninth Circuit panel announced that the rehearing en banc will be deferred until the U.S. Supreme Court decides relevant issues in Viking River Cruises Inc. v. Moriana. This decision was also split with Judges Lucero and Fletcher making the majority, and Judge Ikuta dissenting.

In Viking, the U.S. Supreme Court will decide whether claims brought under California’s Private Attorneys General Act, which allows workers to sue on behalf of the state of California for labor law violations, can survive federal arbitration requirements. Viking is scheduled for oral arguments on March 30, 2022.

With all this litigation activity at the federal and state level, for the moment, the court’s injunction prohibiting enforcement on AB 51’s ban on mandatory arbitration agreements remains in effect.

Employers with mandatory arbitration provisions in their handbooks should examine their options with the aid of experienced employment counsel.

For additional reading on arbitration agreements, visit Federal Judge Extends Restraining Order Preventing Ban on Employment Arbitration Agreements (AB51) – Adishian Law; California 2020: Employee v. Independent Contractors, Wage and Hour, Arbitration, Discrimination and more – Adishian Law; Arbitration Clauses in Employment Agreements, California Lawyers (adishianlaw.com) and Legal Update: California 2020 – Adishian Law

Up next in our blog: President Joe Biden signed the “Ending of Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFASASHA).”

Adishian Law Group is pleased to announce that PI San Francisco has completed its sale to Predictive Index, LLC. Terms are confidential.

ABOUT PI SAN FRANCISCO
Owned and operated by our client, “PI San Francisco” was a leading Predictive Index Certified Partner helping leaders and managers of public and private companies throughout California optimize their recruiting and management.

ABOUT PREDICTIVE INDEX
The Predictive Index was founded more than six decades ago, and in all that time, our mission has not changed. Our passion, inherited from our founder, is to understand people and teams—specifically what drives behaviors at work. Our quest, like yours, is to discover how to impact that behavior, ignite enthusiasm, and align business strategy with talent strategy. Since 1955 we have honed the wisdom, guidance, and tools that help inspire employees be their most productive and engaged.

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other M&A Press Releases.

For more information about this transaction, or if you need help with your sale or acquisition, please contact Chris Adishian:

EL SEGUNDO, CA (November 1, 2021)— Adishian Law Group is pleased to announce that Adishian Law Group, P.C. and Adishian Capital were profiled in the current issue of Southbay Magazine.

Chris Adishian, Founder Adishian Law Group, PC Adishian Capital — Chris Adishian, Founder
Adishian Law Group, PC
Adishian Capital

As the magazine states, “Adishian Law Group advises clients in two main areas: businesses and business owners with revenues of $10 to $200 million, and clients who are active in commercial real estate. Owner Chris Adishian is rated “AV-Preeminent” by his peers, which designates attorneys who are ranked at the highest level of professional excellence for their legal expertise, communication skills and ethical standards. Adishian Capital provides property management and select brokerage services.”

How did the pandemic impact your business?

“2020 was a time of forced change and reflection. Our clients who navigated the pandemic most successfully marshaled the necessary resources—legal, financial, operational—to meet the challenges in front of them and also used the shutdowns to reflect upon their mission, goals and operations to be even better going forward.”

Tell us about some recent client success stories.

“This year we closed our largest mergers and acquisitions transaction to date: a health care deal at a near $180 million enterprise value. It was complex, with private equity and two national law firms. For another client, we served as borrower’s counsel on a $6 million term loan under the Federal Reserve’s Main Street Lending Program. We also recently represented a serial entrepreneur in the sale of his ownership interest to his partner.”

What is the most valuable skill you offer clients?

“My core skill set is along the lines of an ‘expert generalist.’ When we look at a challenge or opportunity, we start with legal expertise. To that we bring multidisciplinary experience in math, finance, strategy, governance and negotiation.”

What can our readers learn from your most successful clients?

“They are committed to improving their decision-making process in business and life. They understand that the two great equalizers are time and decisions. Over time, the compounded results from a good decision process (and avoiding the compounded result of a bad decision process) dwarf any legal fees. Quite often, the best decision is deciding to not do something.”

Three recent reads?

“Buffettology; Thinking, Fast and Slow; and Range.”

What are your favorite podcasts?

“I enjoy listening to The Knowledge Project by Shane Parrish, WTF by Marc Maron and ESPN’s 30 for 30.

Download a .PDF of the original article.

To arrange a call with Adishian Law Group or for more information about this article appearing in Southbay Magazine 2021, please Contact Us.

BrandJump Announces Buyout of Co-Founders Jeff Skippon and Misty Skippon

LOS ANGELES — April 9, 2021 — BrandJump a leading ecommerce sales and marketing firm in the home furnishings industry, announced today that it has acquired Partner and Co-Founders Jeff and Misty Skippon’s interest in BrandJump, LLC.

Founded in 2014, the Los Angeles-based company has built a reputation for enhancing the online presence for their portfolio of brands across more than 50+ retail channels such as Wayfair, YDesign Group, Home Depot, and Amazon. Exclusively specializing in home furnishings and décor, BrandJump works with manufacturers in multiple categories, including furniture, decorative lighting, textiles, outdoor living and accessories.

Over the last 7 years, BrandJump has grown to a team of nearly 40 and prides itself on its talented team with deep industry experience coupled with its increasingly best-in-class technology.

“I’m extremely grateful for our partnership and what we’ve built together over the last 7 years. Jeff’s presence and guidance will be missed, though I’m excited about the next chapter for our company,” said Walter.

“Conceptualizing, creating, pioneering and being a part of building BrandJump into the unique business model that it is today has been one of the most rewarding business experiences of my life. I’m so very thankful for the privilege of coming to know the many wonderful people along the way,” said Skippon.

ABOUT BRANDJUMP
BrandJump is a Los Angeles-based ecommerce sales and marketing company, focused on bringing customized online strategies to manufacturers in the home furnishings space. BrandJump’s unique model delivers merchandising, content, and marketing expertise to optimize their clients’ online presence and drive revenue through internet retail channels. Founded in 2014, BrandJump’s team brings a rare blend of seasoned home furnishings experience with deep ecommerce knowledge to its client base. For more information visit www.brandjump.com.

ABOUT ADISHIAN LAW GROUP, P.C.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other M&A Press Releases.

For more information about this transaction, or if you need help with your sale or acquisition, please contact Chris Adishian:

During the covid-19 pandemic, our firm faced all the same challenges as our clients, while we worked to assist them in navigating the changes and challenges brought on by the pandemic. We’re proud that we were able to continue delivering a high level of service to our clients throughout 2020.

Firm Updates

During the past year, we also made significant changes at our firm.

We Now Have Client Portals and Are 100% Cloud

“Re-Platfoming” happened here too. In the fall of 2020, we migrated to a new practice management software platform after many years. The new program is entirely cloud based, with user-friendly client features such as full Client Portals and integrated electronic document signing.

Towards the end of last year, we migrated entirely off our own servers to a 100% Microsoft cloud environment. While these migrations are always a project, it went fairly smoothly without interruption for our firm or clients. It provides a highly-secure and flexible environment for us and our clients going forward.

We Launched A Refreshed AdishianLaw.com

We are excited to announce that in late 2020, after nearly six months of work, the new www.AdishianLaw.com website went live! Our goals were to (1) modernize the navigation and flow to make it easier to find content and (2) update the look and feel. We invite you to browse around, let us know how we did and connect with us if you have any suggestions.

Practice Update

Our practice is now heavily focused on advising clients and leading transactions in the areas of business, real estate and employment. Over the past year, our firm has been very active in sell-side M&A assignments and financing transactions. We expect the M&A activity to continue at a high rate as baby boomers retire or look to exit over the next decade, private equity funds sit on record amounts of cash and interest rates on cash remain close to zero. Keep an eye out for highlighted transactions in upcoming newsletters.

If you happen to have a legal matter outside our practice areas, we can often assist through our referral network of trusted attorneys.

Observations From The Pandemic

“It is not about avoiding all crises, because you cannot”

There is a quote that I’m fond of that is attributed to a former Nestle CEO: “We have crises and all that. My job is not to manage the crisis. My job is to make sure we have the capabilities of mastering them.”

From its inception, the pandemic created a lot of uncertainty and chaos (and nobody knows what the delta or other variants may bring). Our clients who navigated the pandemic most successfully embraced the truth of the above quote and acted upon it. They focused on marshalling the necessary resources — legal, financial, operational — and rapidly adapting their business processes to weather the storm and be prepared when the pandemic abated.

“The pandemic highlighted enterprise financial fragility”

The pandemic put a renewed emphasis on healthy, liquid balance sheets. From late March 2020 through July 2020 a broad range of businesses were partially or completely shut down, some industry shutdowns lasted much, much longer. The health crises became a financial crisis for many firms across the country, leading to business failures or severely weakened businesses. Companies and organizations with a culture of healthy cash balances, conservative leverage and low cost operations were better able to survive the pandemic.

The time to instill and maintain this culture is before the (next) crisis.

“For investors and entrepreneurs the rate of change appears to be accelerating, and what seemed reliable became risky”

A few examples…. For many years, residential real estate was seen as one of the safest, most reliable ways to build wealth. During the pandemic, vacancies spiked and many tenants couldn’t or didn’t pay rent. Prior to the pandemic, commercial real estate was one of the best performing asset classes. During the pandemic, it was very painful to be a shopping center or commercial real estate owner. Separate from the pandemic, minor league baseball was always viewed as a safe haven for nearly a century due to its alignment with Major League Baseball. In 2020, MLB dropped forty teams from affiliation. Some of these changes appear relatively short term while some appear permanent.

Entrepreneuring has always been risky and the old saying, “the only constant is change” is even more true today. The right team of advisors can help you de-risk your operations, prepare for the next change and take advantage of it when it comes.

We hope that you have been able to stay healthy and safe during the pandemic and continue to do so during the reopening.

We look forward to brighter days ahead which we are confident will bring their own challenges. We’ll be here for you.

We served as Borrower’s counsel on a $6,000,000 Main Street Loan under the Federal Reserve’s Main Street Lending Program.

Area of Law: Business

ALG Represented: Borrower

Transaction Type: Main Street Loan – $6,000,000, Five-year term loan

Year: 2020

Transaction Overview: Main Street Loans v. PPP: The Federal Reserve established the Main Street Lending Program (MSLP) to support lending to small and medium-sized for profit businesses and nonprofit organizations that were in sound financial condition before the onset of the COVID-19 pandemic. The Program terminated on January 8, 2021.

While, the MSLP (aka Main Street Loan) was never as widely known as the PPP (Paycheck Protection Program) it served a critical and different role — shoring up the capital base for previously profitable, financial sound businesses that suffered due to the pandemic. A simple, although not complete, way to compare the two programs is that PPP was designed to avoid massive layoffs by providing eligible enterprises money to pay salaries and retain employees. PPP money was to be received and spent within a relatively brief amount of time. Main Street Loans, on the other hand, were intended to shore up the capital base of eligible firms by making five-year loans to eligible businesses on favorable terms at a critical time when loans were scarce. Main Street Loans were fully collateralized by the business’ assets, personal guaranties from the owners and the owners’ assets.

Documents and Work. On behalf of our client, our firm led the legal work on the transaction from initial documents through Closing. This transaction involved the following documents: Credit Agreement, Term Note, Security Agreement, Pledge Agreement, Owner Guaranties, Deeds of Trust and certain MSLP specific documents along with other ancillary agreements.

Commentary.
A Distributed Transaction and Parties. In today’s legal practice, it is common for us to see parties spread out across several states. Here, the commercial bank lender was in North Carolina, their attorneys were in Minnesota, the Federal Reserve Bank was in Boston and our client is here in California. Over the last few years we are seeing more and more transactions with participants located outside of California who are eager to access the California market either by providing financing or acquiring.

Entrepreneuring is not for the faint of heart. There is a common anecdote that if most entrepreneurs knew at the outset what they would have had to go through to build and sell their business, many of them would have said, “No, thanks!” Creative problem solving, honesty, persistence, flexibility, prudent risk taking, faith and yes luck are just some of what you need to make it….everyday, every week and every year. We also think it helps to have a good law firm along the journey.

Roots in Banking. This financing transaction offered Chris, a former collegiate extern at the San Francisco Federal Reserve Bank and at the Board of Governors of the Federal Reserve, the opportunity to represent the client in a transaction sponsored by the Board of Governors of the Federal Reserve and administered through the Federal Reserve Bank of Boston via designated commercial bank lenders.

Client Update: Since the transaction closed in late 2020, the client’s business has rebounded sharply with the rise in vaccination rates and the return of economic activity. Less than two years into the loan term, the client has repaid half of the principal balance.

Adishian Law Group is a California law firm with a statewide M&A practice led by Chris Adishian. To see other transactions, please view our Case Studies and review other Press Releases.

For more information about this transaction, or if you need help with your sale or acquisition, Contact Us:

We are pleased to announce that Chris Adishian has been appointed to the Boards of Malaga Financial Corporation (OTC: MLGF) and Malaga Bank, FSB. The full press release is included below.

Malaga Financial Corporation Announces the Retirement of Founding Director Leo Lee and Two New Appointments
to Its Board of Directors
September 11, 2020 13:31 ET | Source: Malaga Financial Corp.

PALOS VERDES ESTATES, Calif., Sept. 11, 2020 (GLOBE NEWSWIRE) — Malaga Financial Corporation (OTCPink:MLGF) – Randy Bowers, Chairman of the Board and President/CEO, today announced the retirement of founding director, Leo Lee, from the Board of Directors of Malaga Financial Corporation and its wholly owned subsidiary Malaga Bank, FSB.

Mr. Bowers remarked, “We are extremely grateful to Mr. Leo Lee for his more than 35 years of service on the boards of both Malaga Financial Corporation and Malaga Bank. Mr. Lee’s wisdom and business judgment were invaluable to the success of the bank, including his term as Chairman of the Board in 2013-2014.” Mr. Lee offers his resignation so he can attend to family matters in Taiwan, and will continue to be a part of the Malaga family and the bank he helped establish.

Bowers also announced the appointment of two new directors to the boards of both Malaga Financial Corporation and Malaga Bank, Herbert Ming Chang Lee and Christopher M. Adishian.

Mr. Herbert Ming Chang Lee has over 20 years of experience in commercial real estate development and management in Southern California markets, in addition to his background in investment analysis. He attended the University of California San Diego for his undergraduate degree in Economics and the University of California Irvine for his Master’s in Business Administration. Herbert has strong ties in the Palos Verdes community, having lived here most of his life, and is active in a number of community organizations.

Mr. Christopher M. Adishian joins Malaga Financial Corporation and Malaga Bank boards with impressive legal, financial, and investment experience, including his current legal practice, Adishian Law Group, and as a licensed California real estate broker. Christopher graduated with a degree in Mathematical Economics from University of California Berkeley and interned at the San Francisco Federal Reserve and the Board of Governors of the Federal Reserve in Washington D.C. Mr. Adishian received his law degree from Loyola Law School and is a member of several local bar associations. Having grown up in Palos Verdes, Christopher remains involved in the South Bay community and is active in many community organizations.

“We are pleased to welcome Herbert and Chris as new directors,” said Bowers. “Their success and knowledge in their respective industries, along with their life-long connection to the community, complement the strengths of the current Directors. They will both be valuable additions to Malaga Financial Corporation and Malaga Bank, FSB as we continue to execute our business strategy.”

Malaga Bank, a subsidiary of Malaga Financial Corporation, is a full-service community bank headquartered on the Palos Verdes Peninsula with six offices located in the South Bay area of Los Angeles. Malaga Bank has been named by DepositAccounts.com as one of the Top 200 Healthiest Banks out of the 5,035 banks analyzed across the United States. A more detailed breakdown of Malaga Bank’s A+ health score may be found in the health section of its dedicated page at www.depositaccounts.com/banks/malaga-bank-fsb.html#health. For over ten years Malaga Bank has been consistently recommended by one of the nation’s leading independent bank rating and research firms, Bauer Financial Inc. Malaga Bank was awarded Bauer’s premier Top 5-Star rating for the 51^st consecutive quarter as of June 2020. Since 1985 Malaga has been delivering competitive banking services to residents and businesses of the South Bay, including real estate loan products custom-tailored to consumers and investors. As the largest community bank in the South Bay, Malaga is proud of its continuing tradition of relationship-based banking and legendary customer service. The Bank’s web site is located at www.malagabank.com.

Randy Bowers
                        Chairman of the Board, President and Chief Executive Officer
                        Malaga Financial Corporation
                        310-375-9000
                        rbowers@malagabank.com

Sexual harassment law has changed significantly in California. For employers or employees needing more information, contact us.

Area of Law: Employment Law
General Background: The California legislature and courts have continued their tradition of showing a willingness to “lead” the country in many areas of law, this time with sexual harassment in the workplace. In 2018, California passed new employment related and labor-related laws. In this newsletter, we will highlight the key changes under the new law. In summary, the pendulum has swung.
“Severe and Pervasive” becomes “Single incident”.
Prior law required the plaintiff (usually a woman) to establish that the conduct was “severe and pervasive.” In practice, this became a high hurdle as courts have held that an employee “must demonstrate that the conduct complained of was severe enough or sufficiently pervasive to alter the conditions of employment and create a work environment that qualifies as hostile or abusive to employees because of their sex, and harassment that is “occasional, isolated, sporadic, or trivial” generally fails to meet this standard.” McCoy v. Pacific Maritime Association (App, 2 Dist. 2013)

Now California SB 1300 provides that a “single incident of harassment” may be sufficient to establish a triable claim for hostile work environment.

Previously “Stray Remarks” were not enough for Plaintiffs, now Courts may consider “Stray Remarks.”
Under prior law, the “stray remarks doctrine” empowered a court to grant summary judgment. For example, “[u]nder the stray remarks doctrine, on summary judgment on a Fair Employment and Housing Act (FEHA) claim, a “stray” discriminatory remark that a court determines is unconnected to the adverse employment action is insufficient evidence of a discriminatory motive, as a matter of law, and may be wholly disregarded by the court. Serri v. Santa Clara University (App. 6 Dist. 2014). “Coworker’s stray remarks, while in poor taste, did not amount to discrimination, as required to support employee’s Fair Employment and Housing Act (FEHA) action against employer alleging race discrimination, where employee conceded that she did not believe coworker was acting out of his own personal racial animus.” Patterson v. Apple Computer, Inc. C.A. 9 (Cal.) 2007.

California SB 1300 now provides that “a discriminatory remark, even if not made directly in the context of an employment decision or uttered by a nondecisionmaker, may be relevant, circumstantial evidence of discrimination.” Cal. Gov’t Code. 12923(c).

Previously Summary Judgment was a credible option for Employers, now Summary Judgment is “rarely appropriate.”
Under prior law, an attorney defending a company could look to the “severe and pervasive” standard, and the “stray remarks doctrine” to drive discovery. If the facts developed showed that the conduct did not meet the “severe and pervasive” (or some say “severe or pervasive”) standard, or the facts showed that there was just a “stray remark(s)”, summary judgment in the Company’s favor was a viable goal.

California SB 1300 now makes it clear that these cases should go to trial. “Harassment cases are rarely appropriate for disposition on summary judgment…..hostile working environment cases involve issues “not determinable on paper.” Cal. Gov’t Code 12923(e).

What You Need to Know.
Even some attorneys who represent only plaintiffs think that this new law may have gone too far. Yet this is the law as it currently stands.

For plaintiffs and potential plaintiffs. In our opinion, if you are an employee, and you believe that you have suffered sexual harassment, by all appearances your path to trial just became much easier. What does that mean? In practice, typically a more credible chance of going to trial means higher settlements. However, none of these changes mean that all plaintiffs will win their cases, nor do these changes make a clearly bad case a good case. If you or someone you know has a harassment claim, please contact us via this link: Contact Adishian Law

For employers. In our opinion, if you are an employer, simply put you’ve lost two good arguments to defeat the claims, and by extension, your chances of winning at summary judgment on a harassment claim are not nearly as good as they were prior to the law change. Again, what does that mean? In practice, typically a more credible chance of going to trial means higher settlements. However, it is not all bad news, as employers can still mount a credible defense by meeting their training obligation and by taking “immediate and appropriate corrective action” once on notice of the complaint. Employers can take additional steps to reduce their risk, improve their defenses and mitigate the cost of litigation.

This case is focused on the battle regarding employment arbitration agreements in California.

Quoting from the Federal Docket:

“MINUTE ORDER issued by Courtroom Deputy C. Schultz for Chief District Judge Kimberly J. Mueller: On January 10, 2020, the court heard oral argument on plaintiffs’ motion to preliminarily enjoin enforcement of California Assembly Bill 51 (“AB 51”). ECF No. 5. At hearing, the court granted each party opportunity to file a supplemental brief addressing the issues of jurisdiction and severability. See ECF Nos. 37 , 40 . The court also ordered the temporary restraining order previously imposed, ECF No. 24 , remain in effect until January 31, 2020.

Now, having carefully considered all relevant briefing, including supplemental briefing, the court GRANTS plaintiffs’ motion for a preliminary injunction in full. (emphasis added). In the coming days the court will explain its reasoning in a detailed, written order; however, as of this minute order, the following preliminary injunction shall take effect:

1. Defendant Xavier Becerra, in his official capacity as the Attorney General of the State of California, Lilia Garcia Brower, in her official capacity as the Labor Commissioner of the State of California, Julia A. Su, in her official capacity as the Secretary of the California Labor and Workforce Development Agency, and Kevin Kish, in his official capacity as Director of the California Department of Fair Employment and Housing are:

a. Enjoined from enforcing sections 432.6(a), (b), and (c) of the California Labor Code where the alleged “waiver of any right, forum, or procedure” is the entry into an arbitration agreement covered by the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (“FAA”); and

b. Enjoined from enforcing section 12953 of the California Government Code where the alleged violation of “Section 432.6 of the Labor Code” is entering into an arbitration agreement covered by the FAA.

2. There is no realistic likelihood of harm to defendants from preliminarily enjoining enforcement of AB 51, so no security bond is required. It is so ordered.

(Text Only Entry) (Schultz, C) (Entered: 01/31/2020) “

==========

At the time of this article, this was the current state of play in the ongoing battle over employment arbitration agreements in California.

So we will wait for the Court’s detailed reasoning regarding employment arbitration agreements. For now though, as of February 3, 2020, AB51 remains unenforceable.

For more information about this topic, please Contact Us.