Page 3 – Adishian Law

Areas of Law: This newsletter touches on several intertwined areas of business and employment law that are impacted by California’s new laws: (1) Employee v. Independent Contractor plus Wage and Hour; (2) Arbitration; (3) Discrimination and (4) Other areas.

Why it Matters?: In our opinion, any business — whether it has 5, 50, 500 or 5,000 employees — should pay close attention to all of these changes as any one can be the trigger for significant financial liability. If your business needs help addressing these issues, please contact our firm.

1. Independent Contractor v. Employee (Dynamex and Borello)
AB5 codified the Dynamex ruling from the California Supreme Court, which applied the ABC test (see our August 2, 2018 update, “The ABCs of Independent Contractors“) to determine whether a worker is an independent contractor. In summary, to be an independent contractor the worker must (a) be “free from control and direction”; (b) “perform work outside the usual course of the hiring entity business” and (c) “customarily engaged in an independently established trade.” Under this ABC test, we believe it is very difficult for a business to establish that a worker is an independent contractor. There is some minor flexibility for businesses hiring licensed professionals or receiving professional services as these relationships are analyzed under another test (Borello).

Our business has always used a lot of Independent Contractors, what could go wrong?
Well, everything. Lawyers often use the phrase a “parade of horribles”, and that would be appropriate here. A single alleged independent contractor could (a) file a complaint for workers compensation, (b) file an unemployment insurance claim; (c) file a labor claim for overtime, or (d) hire an attorney to file a “wage and hour” claim (including pay stub compliance, meal break violations, rest break violations and failure to pay overtime). If a wage and hour claim is filed, the damages escalate quickly including statutory penalties and attorney’s fees…and there is no insurance.

Wage and hour claims are frequently filed as class actions.Likewise, there could be an EDD audit. In a “misclassification” based action, the Company’s only defense will be that the worker is an independent contractor, which was always hard to establish, and just became much more difficult. Bottom line, in most situations, the Company will lose the independent contractor battle in our opinion. If you are a business owner with a history of hiring a lot of independent contractors, we recommend that you consult with law firm to see what can be done to lessen your exposure. There may be lawful steps you can take before a lawsuit is filed. If you would like us to confidentially review your situation, please contact our firm.

2. Changes to Arbitration: Immediately challenged
AB51 banned mandatory arbitration agreements and prohibits employers from requiring applicants or existing employees to waive any right, forum or procedure for any employer violations of FEHA, the Labor Code or other statutes governing employment as a condition of employment, continued employment or the receipt of employment related benefits. The bill also prohibits an employer from threatening, retaliating or discriminating against, or terminating any applicant for employment or any employee because of the refusal to consent to the waiver of any right, forum, or procedure for a violation of specific statutes governing employment. SB707 also requires that in an employment or consumer arbitration where the drafting party is required to pay for arbitration and fails to do so within 30 days after the due day, the drafting party will waive arbitration and face drastic monetary and non-monetary sanctions.

AB51 has been challenged in federal court, and the court issued a 10 day temporary restraining order (TRO). Stay tuned.

3. Changes to Discrimination law: Lactation Rooms, Hair Styles, Training and Time.
There are a number of important changes. SB142 requires a lactation room or location that includes prescribed features with close proximity to a refrigerator and sink. SB188 adds “hairstyles: to the list of potential basis for race discrimination. AB9 extends the time to file a discrimination complaint with FEHA from 1 to 3 years. SB788 extends the time to comply with sexual harassment training for employers with 5 or more employees. For help here, contact our firm.

4. Other updates.
California also passed the following employment related laws, which we will just list in summary form here:

AB749 prohibits No Rehire clauses in settlement agreements
AB673 and SB 688 provide additional remedies for failure to pay wages
SB83 increases the maximum wages replacement under California paid family leave
AB35 strengthens law protecting employees from toxic materials
AB203 requires Valley Fever awareness training is expected to be working near substantial dust disturbance
AB1223 requires private employers with 15 or more employees to provide leave of absence with pay for organ donation
AB1554 requires new notice requirements for Flexible Spending Accounts (FSA)
AB1804-1805 address the law regarding occupational injuries
IRS New W4

If you have a concern that touches on one of these other areas, please contact our firm.

Key Takeaways: What Should a California Business Owner Do?
If you own a business in California with a substantial pool of employees, you might be feeling overwhelmed with all these changes, the associated risks and the potential financial exposure. What should you do? Our recommendations:

1. Get an attorney involved on your side. If you don’t have a general counsel or employment attorney, or your attorney is not experienced with these issues, contact our firm.

2. Review your independent contractor / wage and hour exposure. We have helped several clients address these issues. Work with an attorney immediately (i.e. don’t wait until the lawsuit is filed), and if you receive an EDD audit have your CPA work with your attorney.

3. Improve your payroll systems and processes. You may need to redesign your compensation plans, and processes to get into compliance and minimize future risks.

4. Revise your handbooks. If you don’t have a handbook, get one. We offer a flat rate for our California 2020 handbook, and a reduced rate for annual updates, with reduced rates for multi-company engagements. Contact us for information.

How do businesses navigate the new California laws affecting independent contractors, wage and hour, discrimination and arbitration? Read on.

Given the many significant changes to California law affecting businesses, this newsletter is longer than usual.

Areas of Law: This newsletter touches on several intertwined areas of business and employment law that are impacted by California’s new laws: (1) Employee v. Independent Contractor plus Wage and Hour; (2) Arbitration; (3) Discrimination and (4) Other areas.
Why it Matters?: In our opinion, any business — whether it has 5, 50, 500 or 5,000 employees — should pay close attention to all of these changes as any one can be the trigger for significant financial liability. If your business needs help addressing these issues, please contact our firm.

AB51 has been challenged in federal court, and the court issued a 10 day temporary restraining order (TRO). Stay tuned.

4. Other updates.
California also passed the following employment related laws, which we will just list in summary form here:

If you have a concern that touches on one of these other areas, please contact our firm.

Key Takeaways, What Should a California Business Owner Do?
If you own a business in California with a substantial pool of employees, you might be feeling overwhelmed with all these changes, the associated risks and the potential financial exposure. What should you do? Our recommendations:
1. Get an attorney involved on your side. If you don’t have a general counsel or employment attorney, or your attorney is not experienced with these issues, contact our firm.

Left to Right: Cynthia Sun, Esq., Chris Adishian, Esq., Trevor Zeiler, Esq. (Not Pictured: Laura Mayer)

EL SEGUNDO, CA (November 15, 2019)— Adishian Law Group is pleased to announce that Adishian Law Group, P.C. and Adishian Capital were profiled in the Southbay Magazine 2019 Trusted Advisors Issue.

As the magazine states, “Adishian Law Group practices business, employment and real estate law. The firms work includes leading mission-critical transactions and litigation, and high-stakes employment cases involving highly compensated professionals. Adishian Capital is a licensed real estate brokerage that provides property management services and select brokerage services. Together the companies assist clients with all their real estate activities. Owner Chris Adishian earned his math economics degree Berkeley, with a business minor from Haas School of Business and was a Dean’s Scholarship recipient at Loyola Law School. He is rated an AV-Preeminent attorney by his peers”

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 results of a bad decision process) dwarf any legal fees. Sometimes the best decision is deciding to not do something.”

What business lessons have you learned running your own companies?

“There are so many. Here are some of the most important in our view: setting the culture of the firm, recruiting/retaining the right people, working for clients we enjoy and of course, delivering the highest level professional service and advice.”

Why did you choose to work in this profession?

“When I graduated from law school, practicing law was the last thing on my mind. I was fortunate to meet a number of outstanding individuals — some significantly more experienced that I was — who were kind, strong, wise, fair-minded, lived balanced lives, contributed significantly to their community and were financially comfortable. They had one other thing in common: all were lawyers running smaller practices. Eventually that made a lot of sense to me. This fall is our 16th anniversary.”

What is the best legal advice you ever received?

“I read this in a business book, probably long before I went to law school. The more important term in the contract isn’t in the contract; it’s dealing with people who are honest.”

What are your favorite podcasts?

“During my commute, I enjoy listening to “The Knowledge Project,” “On Being” and “How I Built This.”

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To arrange a call with Adishian Law Group or for more information about this article appearing in Southbay Magazine 2019, please Contact Us.

We are pleased to announce that Chris Adishian recently spoke at LMU about commercial real estate as part of LMU’s REAG/REAC event.

About the Event.
On November 7, 2019, Chris Adishian was invited to speak to an audience of students, alumni, colleagues, parents, faculty and staff as part of a panel discussion titled “How to Get Started and Succeed In Investment Real Estate.” The event was held at the Hilton building on LMU’s campus. The event featured questions from the moderator followed by open Q&A from the audience and a reception afterwards. The event was organized by LMU’s Real Estate Alumni Group (REAG) and Real Estate Alumni Council (REAC).

“I’ve spoken on a number of panels over the years and I always enjoy them. The LMU event was a great opportunity to share some expertise, experience and stories with the community. There was great energy interacting with my fellow panelists and the audience,” said Chris Adishian. “Edgard and the Real Estate Alumni Council put on a wonderful evening event.”

Want Chris Adishian to Speak to Your Class, Organization or Business? If you would like Chris to speak to your class, organization or business, either individually or on a panel, please contact our firm with the date and time of your event. Chris is typically asked to speak about employment law, business law and real estate law. For samples of prior speaking engagements, you can visit our YouTube Channel to see video clips of Chris speaking to the South Bay Association of Realtors Commercial Attorney Panel. (The older ones were shot in low-res, and the more recent ones were shot in HD).

We are pleased to announce that the legal profession’s most prestigious rating service has recognized Chris Adishian with its highest Peer Review Rating^TM: AV Preeminent

Dear Clients and Friends of the Firm,

We are delighted to inform you that Chris Adishian has received Martindale-Hubbell’s Highest Peer Review Rating^TM.

Chris received an “AV Preeminent” rating from his professional peers, which means that he was deemed to have preeminent legal ability and very high professional ethics. The AV Preeminent rating designates attorneys who are ranked at the highest level of professional excellence for their legal expertise, communication skills and ethical standards by their peers.

Martindale-Hubbell Peer Review Ratings were created in 1887 as an objective tool that would attest to a lawyer’s ability and professional ethics, based on the confidential opinions of other lawyers and judges who have worked with the attorneys they are evaluating. Back then the simple goal was to provide “lawyers, bankers, wholesale merchants, manufacturers, real estate agents and all others….the address of one reliable law firm… in every city in the United States.” With all the advances in technology since that time, the same need still exists.

The Martindale-Hubbell Peer Review Ratings process evaluates lawyers based on the anonymous opinions of members of the Bar and the Judiciary, including both those who are rated and those who are not. Reviewers are instructed to assess their colleagues’ general ethical standards and legal ability in a specific area of practice.

The Martindale-Hubbell Peer Review Ratings have remained the most prestigious and widely respected lawyer rating system in the world for over one hundred years.

In this highly competitive environment for legal services, the Martindale-Hubbell Peer Review Rating is often one of the only means to differentiate lawyers who may otherwise appear comparable in their credentials.

This is important on a variety of levels – from the in-house counsel trying to determine which one of his outside law firms should be assigned a new matter to the private practice attorney seeking to refer a case to another lawyer with the appropriate expertise in a specific area of practice.

We’re honored and grateful to receive this recognition from our peers.

To arrange a call with Chris Adishian at Adishian Law Group or for more information about this rating, please Contact Us.

Thank you for your ongoing support, and it you know a potential client who could benefit from our legal services, we always welcome the opportunity to meet referrals from our clients and friends of the firm.

Regards,

Adishian Law Group, P.C.

EL SEGUNDO, CA (June 20, 2019)—Adishian Law Group Advises Premier World Discovery on Acquisition of AFC Vacations.

Adishian Law Group is pleased to announce that Premier World Discovery has completed the acquisition of AFC Vacations. The Company’s Press Release regarding the acquisition follows:

Redondo Beach, CA – June 20, 2019 – Premier World Discovery announced that it has acquired AFC Vacations, a tour operator offering affordable first class tours, river cruises and ocean cruise-tours. The purchase continues Premier World Discovery’s growth plan and will better serve the needs and service to all guests that travel with both companies.

Matthew Kennel, Co-owner and Co-President of Premier World Discovery noted, “The acquisition of AFC Vacations complements our overall global tour offerings and provides synergies that will produce greater opportunities and customer service for our guests. We have always been impressed with the tour and cruise offerings as well as the level of customer service that AFC Vacations has provided their guests over the past 37 years.”

Stephen Birkett, Founder and Co-President of Premier World Discovery also commented, “Our acquisition of AFC Vacations provides a major growth opportunity for both brands and offers an exciting opportunity to continue to evolve. The acquisition also supports our strategy in the group travel market and at the same time meet the demands and needs of future guests on our tours around the world in an ever changing global travel market.”

“AFC Vacations is very excited to join Premier World Discovery, this is a perfect match. Both companies share similar philosophies and values and we look forward to expanding our tour offerings to our guests and continue to grow the AFC Vacations brand under Premier World Discovery”, said Randy Case, Founder and President of AFC Vacations.

ABOUT PREMIER WORLD DISCOVERY

Premier World Discovery offers Worldwide Guided Travel with 2019 marking the company’s 20th year in business. The company employs a national sales team and has grown to offer more than 80 fully guided tour programs both domestically and internationally to more than 50 countries and 6 continents. Guests can choose from five distinct travel styles – One Hotel – Limited Hotel Stay Tours, Classic Tours, Rail Journeys & Train Tours, Exotic Discovery Tours and Exclusive European River Cruise Charters. To learn more about Premier World Discovery and its current tour offerings visit premierworlddiscovery.com.

ABOUT AFC VACATIONS

Founded in 1982, AFC Tours offered escorted tours both in North America and internationally. AFC Tours was eventually rebranded into AFC Vacations, with the acronym AFC meaning – Affordable First Class Vacations. Randy Case will continue to lead AFC Vacations as the President and the company will continue to be based in San Diego. AFC Vacations will run as a separate division with the same executive team and the same focus – offering unparalleled customer service, memorable vacations and unique lifetime experiences aimed at exceeding guests’ expectations. To learn more about AFC Vacations and its current tour offerings visit afcvacations.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:

For more information about this transaction, contact Chris Adishian:

General Background

The classification of an individual performing services for an operating company has long been an area of ambiguity and contention. Oftentimes, an employer may want to classify a new hire as an independent contractor. Oftentimes, an employee may want to be classified as an independent contractor. The critical hot buttons at issue with the classification are tax withholdings, tax deductions, eligibility for overtime, meal breaks, rest breaks and qualification for benefits.

The 9th Circuit’s Dynamex Decision: What You Need To Know

1. Dynamex DOES apply retroactively under California law. The Appellate Court affirmed the the California Supreme Court’s interpretation that Dynamex does apply retroactively, quoting it “is basic in our legal tradition” that “judicial decisions are given retroactive effect.” Ok, that resolves California law. But what about retroactive application under federal law? 2. Dynamex also DOES apply retroactively under Federal law. The defendant-appellee argued that retroactive application was a violation of Due Process. Here, the Court distinguished between retroactive application in a civil context versus a criminal context. As this was a civil matter, the Court referenced the analysis of a legislative act, quoting “adjusting the burdens and benefits of economic life come to the Court with a presumption of constitutionality” and are evaluated under a rational basis test. Here, we have a judicial rule (i.e. Dynamex) and not a legislative act. Therefore, the court reasoned, “[e]ven more deference is owed to judicial common-law developments, which by their nature must operate retroactively on the parties in the case.” 3. Where can an Employer Win on Summary Judgment (or where might there be no employer-employee relationship)? As we advise our client employers, Prong B of the ABC test provides the clearest opportunity. The example used is where a retail store hires a plumber to repair a bathroom leak, then in that situation the hiring entity (retail store) is not engaged in the same usual course of business as the putative employee (plumber). See our earlier articles regarding Dynamex for a review of the ABC test. 9th Circuit in a New York State of Mind: The 9th Circuit is frequently portrayed as populated by jurists from the West Coast or Pacific Northwest. However, this 9th Circuit decision was authored by the Honorable Frederic Block, Unted States District Judge for the Eastern District of New York, sitting by designation. ALG in the Courtroom: The Honorable William Alsup, District Judge was the Presiding Judge on the Appeal Panel. We recently appeared before Judge Alsup in a client matter. How Do You Manage the Risk?: Business and life is about risks, mitigating risks and managing risks. Litigation arising from misclassification is one of those risks. The first approach a company (or contractor) can take is to set up the work relationship as an employer-employee relationship. The second approach would be to set up the relationship as an independent contractor relationship after running through the test with your legal counsel, and with full appreciation of the risks of misclassification in financial terms. The third approach is to search for insurance to cover this risk. At the present time, we are not aware of any, but new products are being created all the time, so we recommend that employers revisit this issue with their insurance brokers periodically.

About Adishian Law Group, P.C.

Adishian Law Group (https://adishianlaw.com) is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. As of December 2018, the firm has represented corporate and individual clients located across 22 California counties, 13 States outside of California and 10 foreign countries in over 590 legal matters. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco.

For more information about this case, contact Chris Adishian:

The story of Adishian Law Group began 15 years ago, when we first opened our doors in San Francisco’s landmark Mills Building.

Back then….we only had 1 attorney, 1 laptop computer and no clients! Thanks to the support of people like you, some hard work and some good results, we are fulfilling the dream of building a law firm that is a hub for clients seeking trusted California counsel to assist them with their legal needs. In 2018, we added 49 new client matters, and we also welcomed some talented new team members.

We are grateful for the trust and confidence in our firm shown by you, our clients and our professional peers. As we turn to 2019 with optimism we are very pleased to have this opportunity to share with you a small sample of some of our more visible client successes from the past year.

General Counsel, M&A

Exclusive sell-side Counsel to Pioneer Magnetics in the sale of its 60 year-old global power supply business (design, manufacturing and repair) to U.S. Technologies.
Advised Welcome Group, Inc., a Japanese corporation, on the formation of a U.S. subsidiary to operate JAPAN HOUSE LA. To learn more about the global JAPAN HOUSE project promoting the Tokyo 2020 Games, please visit www.japanhouse.jp.
Defended holding company owner of high profile, venture-backed company (raised ~$46M) against breach of contract and fraud complaint.
Exclusive buy-side Counsel in acquisition of over the counter supplement manufacturer and distributor.

Real Estate

Exclusive buy-side Counsel to Malaga Bank (OTC: MLGF), a billion dollar asset community bank, in its acquisition of its corporate headquarters building, located in the iconic Malaga Cove Plaza in Palos Verdes Estates, California.
Represented Northern California homeowner in dispute with Pacific Gas & Electric regarding alleged encroachments on PG&E gas line easement. Case settled.

Employment

Represented a senior level, female employee bringing claims against her former employer including sexual discrimination, sexual harassment, failure to prevent discrimination and harassment and other claims. Case settled, pre-litigation.
Defended a number of Companies against misclassification and wage and hour allegations brought by former employees.

For 2019, we are looking for the following client referrals:

Residential/commercial real estate owners who can benefit from our unique pairing of a law firm (Adishian Law Group) with a property management firm (Adishian Capital Cal. BRE #01795301, www.AdishianCap.com);
Growing businesses ($10M to $200M) in need of sophisticated general counsel to guide growth, acquisitions and exits and
Families who have inherited significant wealth ($15 to $100M) seeking trusted, high-quality family general counsel

Click here to “Meet the Team“.

We wish you a happy, healthy and prosperous 2019, and look forward to seeing you in the New Year!

EL SEGUNDO, CA (November 15, 2018)— 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.

As the magazine states, “Adishian Law Group practices business, employment and real estate law. Their work includes leading mission-critical transactions and litigation, and high-stakes employment cases involving highly compensated professionals. Adishian Capital is a licensed real estate brokerage that provides property management services and select brokerage services. Together the companies deliver “family office” real estate capabilities giving clients relationship continuity across all their real estate activities. Owner Chris Adishian earned his B.A. in mathematical economics from Berkeley, with a minor in business administration from the Haas School of Business, and his law degree from Loyola Law School.”

What is the best legal advice you have ever received?

“I read in a business book—probably long before I went to law school—that the most important term in the contract isn’t in the contract. It’s dealing with people who are honest.”

Share your thoughts about the value of the human connection in your industry.

“It’s everything. You have to know yourself, be yourself and connect with your fellow humans in a genuine manner, even in times of tough business negotiations or outright litigation. If you cannot genuinely connect with other humans, everything will be challenging.”

Tell us some recent client success stories.

“We served as counsel to our seller/developer client in the construction and sale of two office buildings that are now the corporate headquarters for Australian toy company Moose Toys. In another matter, a Japanese company retained our firm to form its U.S. subsidiary for #JapanHouse Los Angeles—a global project to promote Japanese culture, art, food, technology and fashion ahead of the Tokyo 2020 Olympic Games.”

L to R: Emily Zinn, Trevor Zeiler, Cynthia Sun, Chris Adishian, Tamara Cook, Julia Toscano, Laura Mayer

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: (1) time and (2) decisions. Over time, the compounded result of good decisions (and avoiding the compounded result of bad decisions) dwarfs any legal fees. Sometimes the best decisions are to not do something.”

What is the most valuable skill you offer?

“My individual core skill set is along the lines of an ‘expert generalist.’ When we look at a challenge or opportunity, we start with the legal expertise. That’s foundational. Along with our legal advice, we bring deep knowledge and multidisciplinary experience, which come together to inform the client’s business or litigation strategy and execution.”

Click this link to read the full-color original.

To arrange a call with Adishian Law Group or for more information about this article appearing in Southbay Magazine 2018, please Contact Us.

The California Supreme Court recently ruled against Starbucks regarding its practice of not paying employees for alleged “de minimis” work performed after clocking out. Starbucks had a practice of having their employees perform certain administrative and clean up duties after “clocking out” for the day. The effect was that the employees were not paid for this time. Allegedly, Starbucks thought it was okay because this was not a lot of money at issue (i.e. “de minimis“). Quoting from the opinion, “The de minimis doctrine is an application of the maxim de minimis non curat lex, which means ‘[t]he law does not concern itself with trifles.'” Here, though, the California Supreme Court did not view this as a trifle.

The California Supreme Court held that:

(1) California statutes and wage orders have not incorporated the Federal “de minimis doctrine” and
(2) California’s general background de minimis principle is not applicable here

Quoting Justice Liu:

“What Starbucks calls de minimis is not de minimis at all to many ordinary people who work for hourly wages.”

Applying the Starbucks Decision:

Our view is that in this context, “de minimis” is probably dead, so reliance on that concept for justifying post-closing, or pre-opening work “off-the-clock” is misplaced. Perhaps it was not previously, but things change. As Justice Liu wrote in his concluding paragraph of his opinion “The relevant statutes and wage order do not allow employers to require employees to routinely work for minutes off-the clock without compensation.”

How Do You Manage the Risk?:

Business and life is about risks, mitigating risks and managing risks. Litigation from arising from failing to fully pay employees is one of those risks, and it is significant. The first approach a company can take is to have employees perform all duties on the clock, and document that requirement in your policies and procedures. If you need an up to date California employer handbook, we can do that for you.

The second approach would be to test the boundaries of the word “routinely” and permit off the clock once in while, after running through the test with your legal counsel, and with full appreciation of the risks. We don’t advise this approach, but merely recognize that some could read the opinion that way.

About Adishian Law Group, P.C.

Adishian Law Group (https://adishianlaw.com) is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. As of December 2016, the firm has represented corporate and individual clients located across 22 California counties, 13 States outside of California and 10 foreign countries in over 520 legal matters. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco.

For more information about this case, contact Chris Adishian: