The Conkle Firm Joins PCPC California Lobby Day 2016

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Conkle, Kremer & Engel attorney John Conkle is proud to have again been invited to join the Personal Care Products Council’s delegation for California Lobby Day, an annual PCPC event held at the Capitol in Sacramento, California.  The Personal Care Products Council (PCPC) represents the personal care products, beauty and cosmetics industry at the federal, state and local level on issues of interest to the industry.

California Lobby Day represents a unique opportunity for industry leaders to meet with legislators including Leadership, key Committee Chairs and members of the Legislative Women’s Caucus, state officials, and their staff members and to engage in open discussions about legislative and regulatory issues affecting the personal care products industry.  The day is expected to include briefings in the Governor’s Office by the executive department personnel and meetings with staff in the offices of members of the State Legislature, as well as a reception for members of the California Legislature, personnel from the Office of Governor Brown, and PCPC members and staff.  Among those with whom John is expecting to meet are Nancy McFadden (Executive Secretary to Governor Brown); Carol Monahan-Cummings (Office of Environmental Health Hazard Assessment); Meredith Williams (Deputy Director of Safer Consumer Products and Workplaces Program, Department of Toxic Substances Control); and Panorea Advis (Director of the Governor’s Office of Business and Economic Development).

Conkle, Kremer & Engel is proud to be an active member of the Personal Care Products Council.  Over the years, CK&E has provided legal expertise to the PCPC and its member companies by presenting at conferences organized by the PCPC on legal and regulatory matters, as well as representing many PCPC member companies.  CK&E has also been a frequent sponsor of conferences organized by the PCPC and has participated in numerous events hosted by the PCPC.

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The Conkle Firm Helps Electronics Business Owners Strenghten Their Hands at ERA SoCal Event

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Conkle, Kremer & Engel attorney Eric Engel was pleased to have been invited for a return engagement to present to the Electronic Representatives Association for Southern California, at the ERA SoCal Owners’ Forum in Carlsbad on April 6, 2016.  ERA is the international association of professional manufacturers representatives firms and electronics industry manufacturers who use independent sales reps.  ERA’s member firms sell more than $40 billion annually in electronics products for thousands of manufacturers in industries ranging from consumer to military and aerospace.  ERA SoCal is one of the most proactive chapters in ERA, covering Central California through Los Angeles, Orange and San Diego counties, and extending into Southern Nevada and Mexico.  ERA SoCal sponsors frequent events to promote, educate and protect manufacturer’s representatives.

The theme of this ERA SoCal roundtable forum was “Strengthening Your Hand,” and featured Eric’s presentation on ways that business owners can improve their contracts, business relations and collection rates.  The focus was on avoiding disputes that can lead to litigation, and being prepared to present a strong hand if a dispute does arise.

The open forum included many thoughtful questions and comments by business owners, who shared their industry experiences and challenges they have faced.  In addition to outlining important terms that should be included in written contracts, discussion also concerned the application of the Independent Wholesale Sales Representatives Contractual Relations Act, California Civil Code §§ 1738.10 et seq., a “pro-representative” law in California that requires manufacturers to have a signed written contract with sales reps, and provide written accountings with every payment of commissions.  When a manufacturer willfully fails to comply with requirements of the Act, the sales rep agency is entitled to “treble damages” – three times the unpaid commissions – plus attorney fees.

Eric has handled commission matters for many years, and was lead trial attorney in Reilly v. Inquest Technology.  The Reilly case was the first precedent in California that enforced the full remedy of treble damages under the Act, resulting in $2.1 million jury verdict becoming a judgment for $6.2 million, plus attorney fees and interest.  ERA and its partner organization, Manufacturers’ Agents National Association (MANA), were important sponsors of the Act and similar legislation enacted in about 36 other states to protect the rights of independent wholesale sales representatives.  CK&E is proud to be able to help sales representatives create contracts that protect their rights to be paid for their services, and to help them enforce their rights when disputes arise.

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No Fooling! On April 1, Almost All Employers are Subject to New Employment Regulations in California

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Effective April 1, 2016, new regulations of the California Department of Fair Employment and Housing (DFEH) impose stringent new anti-discrimination and anti-harassment requirements on almost all employers having any employees in California.  Unlike in the past, the new amendments to regulations under California’s Fair Employment and Housing Act (FEHA) apply to any employer having five or more “employees,” any of whom are located in California.  The word “employees” is important, because the new FEHA regulations count toward the minimum of five “employees” unpaid interns, volunteers and persons out on leave from active employment.  Further, it appears that this new FEHA regulation is intended to apply even to employers with headquarters outside of California if any of their employees are located in California.

The FEHA regulatory amendments require all affected employers to have written policies prohibiting workplace discrimination and harassment.  The policies must apply to prohibit discrimination and harassment by co-workers, who are made individually liable for their own violations, and by third parties such as vendors in the workplace.  The regulations demand that the written policy list all currently-protected categories protected under FEHA:  Race, religion, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, and military or veteran status.  Prohibited “sex discrimination” includes discrimination based on pregnancy, childbirth, breastfeeding and related medical conditions.  Interestingly, the regulations also prohibit discrimination against employment applicants holding a special California driver’s license issued to persons without proof of legal presence in the United States.  It is not yet clear how this will work in conjunction with the employer’s existing Federal obligation to confirm eligibility for employment.

The employer’s written policy must specify a confidential complaint process that satisfies a number of criteria.  Workplace retaliation for making good faith complaints of perceived discrimination or harassment is prohibited.  The written policy must be publicized to all employees, with tracking of its receipt by employees.  If 10% of the employer’s work force speaks a language other than English, the written policy must be translated to that language.

Further, the new regulations attempt to resolve a number of uncertainties about who is protected, specifying that both males and females are protected from gender discrimination, and requiring that transgender persons be treated and provided facilities consistent with their gender identity.  There are many other changes, such as a new entitlement to four months for pregnancy leave that is not required to be taken continuously.  If an employer has more than 50 employees, there are additional requirements, such as periodic sexual harassment prevention training for supervisors.

Employers operating in California are well advised to review their policies and practices, and to consult with qualified counsel regarding changes that may be required.  Conkle, Kremer & Engel attorneys help clients remain compliant with laws, regulations and case developments affecting employers in California.

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California Pavilion Exhibitors Achieve Goals at Cosmoprof Bologna

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Positive Global Sales

Cosmoprof Bologna came to a successful close on March 21.  The overall show statistics are not available yet, but participants in the California Pavilion experienced brisk business.  The California Pavilion this year expanded to two islands with 18 exhibitors, and booths were often crowded with interested buyers.  The CK&E lounge at the center of the California Pavilion buzzed with deal negotiations, and CK&E attorneys Mark Kremer and Eric Engel were glad to be able to lend their assistance to help participants expand their global reach.

Mark Kremer and Eric Engel at Cosmoprof Bologna 2016

Mark Kremer and Eric Engel at the CK&E Lounge in the California Pavilion

Organizer Cesar Arellanes of California Trade Alliance commented that California Pavilion participants reported meeting or exceeding their goals for the show, expanding and strengthening their international business.

CK&E attorneys advise clients to prepare for major trade shows, particularly foreign shows, by verifying that they have taken all appropriate steps to protect their trademarks, trade dress and other valuable intellectual property, before problems arise.  To help one well-prepared client, Mark Kremer successfully initiated an immediate takedown of counterfeit products being sold in another hall.  CK&E attorneys attend major beauty industry trade shows to help protect clients’ brands, to keep current on trends, and to assist clients with the full range of legal skills needed to grow their businesses internationally.

David Lester at Cosmoprof Bologna 2016

COOLA at California Pavilion

 

 

 

 

CK&E Lounge at the center of California Pavilion

CK&E Lounge at the center of California Pavilion

 

 

 

Daily Concepts and Afterspa in California Pavilion at Cosmoprof Bologna 2016

Daily Concepts and Afterspa in California Pavilion

 

 

 

 

Infinite Aloe booth at California Pavilion

Infinite Aloe at California Pavilion

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California Pavilion at Cosmoprof Bologna Opens

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Bologna FiereThe huge convention center in Italy known as Bologna Fiere sprang to life today with the opening of Cosmoprof Bologna, featuring the California Pavilion organized by California Trade Alliance.  Conkle, Kremer & Engel sent attorneys Mark Kremer and Eric Engel to help clients and other beauty industry participants groCK&E Lounge at California Pavilionw their businesses by expanding internationally.  Once again this year, CK&E is proud to sponsor the Exhibitor Lounge in the California Pavilion, which enables participants to work, meet and discuss international business deals.

Thirty-five California Pavilion participants began the event with a dinner to share ideas and stories.  The group was glad to be able to use the occasion to celebrate the special birthday of Emilio Smeke, of Daily Concepts and AfterSpa.  The California Pavilion has the unique position of being the only State Pavilion in the Hall of Country Pavilions, with a choice position adjacent to the USA Pavilion.  The prominence of the California Pavilion is a fitting tribute to the strength and growth potential of the California cosmetics business and the leadership of Cesar Arellanes and Jake Rubenstein of California Trade Alliance.California at Hall of National Pavilions in Cosmoprof Bologna 2016

Emilio Smeke Celebrates Birthday at Cosmoprof Bologna 2016Mark Kremer at California Pavilion Dinner

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Hot Yoga and Cold Law: Employment Retaliation Claims Can Arise Anywhere

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Most people would agree that working in a government office that supervises lawyers is quite different than working in a 104 degree “hot yoga” studio. But recent matters involving these two very different work environments show that employment retaliation claims can be asserted against any employer – whether you’re a yoga master or the master of all lawyers in California.

The California State Bar has the staid mission of regulating the admission of attorneys and investigating assertions of attorney misconduct. Yet in November 2015, the State Bar found itself charged with wrongful employment retaliation after it fired one of its top managers, John Noonen. Noonen asserted that the termination was retaliatory because, just a few weeks earlier, he submitted a 40-page internal complaint against the State Bar’s top attorney for allegedly failing to properly investigate complaints against the president of the State Bar. The State Bar has denied Noonen’s retaliation allegations and has said that Noonen’s position was eliminated as part of a cost-saving effort.

Less than two months later, the same types of claims led to a sizeable jury verdict against a completely different business run by famed yoga guru Bikram Choudhury. Choudhury made his fortune teaching yoga instructors his techniques and allowing graduates to operate yoga studios that feature a specific yoga sequence performed in a 104-degree room. In January 2016, a Los Angeles jury found that Choudhury sexually harassed his former legal advisor and wrongfully fired her for investigating others’ claims of sexual discrimination and assault against him. Choudhury asserted he had good cause to fire his legal advisor because she was not licensed to practice law in California. The jury first ordered Choudhury and his yoga business to pay $924,000 in compensatory damages, and the next day the jury upped the ante with a further award of $6.4 million in punitive damages.

In each of these recent cases, employees alleged that their bosses improperly “retaliated” against them for investigating workplace misconduct. Most employers and employees know that laws exist to protect employees from wrongful discrimination and harassment. The same laws also provide that employers cannot punish or “retaliate” against employees for making complaints about other potentially wrongful employment conduct, such as discrimination or harassment, or for participating in workplace investigations about such potential wrongful employment conduct.

“Retaliation” is prohibited by the same federal laws that prohibit employment discrimination based on race, color, sex, religion, national origin, age, disability and gender. “Retaliation” can take many forms, including termination, demotion, suspension or other employment discipline against the employee for engaging in protected activity, such as reporting perceived employer discrimination or other misconduct. Owing to its broad scope, retaliation is a claim commonly raised by disgruntled or terminated employees. In fact, according to the federal Equal Employment Opportunity Commission (“EEOC”), retaliation is the most common basis of discrimination claims in EEOC cases.

These cases illustrate some of the many circumstances in which employment issues can lead to litigation against a wide variety of employers. Conkle, Kremer & Engel regularly advises employer and individuals on workplace issues and the ramifications of retaliation and harassment claims so that all involved can take steps to resolve conflicts in a meaningful, efficient way. When circumstances do not do not allow a non-litigated solution, CK&E attorneys litigate and arbitrate employment disputes including retaliation claims, whether the claims are asserted individually or as a class action.

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Labels Matter: Consumer Class Actions are Available for Organic Labeling Violations

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The California Supreme Court has affirmed that “labels matter” to both buyers and sellers of consumer products. “They serve as markers for a host of tangible and intangible qualities consumers may come to associate with a particular source or method of production.” California protects consumers from mislabeling through a number of laws, including possible class action lawsuits under the Consumers Legal Remedies Act (Civil Code §§ 1750 et seq.), unfair competition laws (Bus. & Prof. Code §§ 17200 et seq.) and false advertising laws (Bus. & Prof. Code §§ 17500 et seq.)

Aside from California’s general false labeling laws, there are specific laws and regulations regarding organic product labeling. The California Organic Products Act (COPA), generally requires that multi-ingredient cosmetics labeled or sold as organic contain at least 70% organically produced ingredients. But COPA is designed to work in concert with Federal regulations that direct baseline standards for production, labeling and sale of organic products. The California Supreme Court recently addressed whether the Federal regulations of organic products in some manner preempt or supersede California’s consumer protection laws, so that only the very limited Federal remedies can be pursued when there are alleged violations of organic labeling laws.

In Quesada v. Herb Thyme Farms, Inc., the California Supreme Court determined that California’s general laws prohibiting labeling misrepresentation do not conflict with the Federal laws concerning organic production, labeling and sale, but rather complement those Federal laws by allowing additional remedies to be pursued when those laws are broken by fraudulent organic product labeling. The Supreme Court observed that “permitting state consumer fraud actions would advance, not impair” the goals of providing “a level playing field” to manufacturers of organic products and “enhance consumer confidence in meaningful labels and reduce the distribution network’s reluctance to carry organic products.” From this perspective, where products are fraudulently mislabeled as organic, “the prosecution of such fraud, whether by public prosecutors where resources and state laws permit, or through civil suits by individuals or groups of consumers, can only serve to deter mislabeling and enhance consumer confidence.”

The result for manufacturers, distributors and resellers is that organic product labeling can create concerns at multiple levels, including federal and state regulatory liability, and class actions under strong state consumer protection laws. All those involved in the chain of manufacturing and distribution of products labeled as organic should consult with experienced counsel to protect themselves from potential adverse outcomes that can come from several directions. Conkle, Kremer & Engel attorneys are well versed in helping their clients proactively avoid and resolve such problems.

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Seriously – Aloe Vera Whole Leaf Extract May be a Prop 65 Chemical

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We’ve recently written a series of articles about “natural” personal care products that may inadvertently run afoul of Prop 65 regulations.  You may be surprised to learn that such “natural” products may include ingredients that have been identified as “chemicals known to the State of California to cause cancer” under Proposition 65.

One of the more surprising of the proposed Prop 65 ingredients is Aloe Vera Whole Leaf Extract.  On April 23, 2015, California’s Office of Environmental Health Hazard Assessment (“OEHHA”) issued its notice of intent to list Aloe Vera Whole Leaf Extract as a chemical known to cause cancer. Although more than 420 species of Aloe plant exist, the specific form that is the subject of the proposed listing is: “Aloe Vera whole leaf extract” which “consists of the liquid portion of the Aloe Vera leaf and is a natural constituent of the Aloe barbadensis Miller plant.”  Fortunately, OEHHA specifically excludes Aloe Vera decolorized whole leaf extract, Aloe Vera gel, Aloe Vera gel extract and Aloe Vera latex, which are the more common forms used in personal care products.

When it issued the notice of intent to list Aloe Vera Whole Leaf Extract, OEHHA also issued a notice of intent to list Goldenseal Root Powder as a chemical known to cause cancer. OEHHA identified goldenseal root powder in the proposed listing as “the powdered dried roots and underground stems of goldenseal plants” and declared it to be “a natural constituent of the goldenseal plant.” OEHHA further specifies that Goldenseal is also known as Hydrastis Canadensis, orangeroot, Indian turmeric, and curcuma. Fortunately, OEHHA further specifies that the spice turmeric (Curcuma longa Linn.), frequently found in personal care products such as face and body lotions and cleansers, is not proposed for listing. The form of goldenseal root extract that is contemplated for addition to the Prop 65 list is most often used in the form of nutritional supplements.

Even when manufacturing or distributing “natural” products, beauty companies should take care to review the products’ current formulations to determine whether they contain an ingredient that is or may be on the Proposition 65 list, or whether any of their products contain an ingredient that may cause an exposure to a Prop 65 chemical.  It may be vital to work closely with manufacturers or suppliers, and have strong contracts to protect against Proposition 65 liability. Companies should be pro-active and consider reformulation if a proposed or actual Prop 65 chemical is being used.  And if a Proposition 65 Notice of Violation is received, affected companies should promptly contact counsel with experience in successfully resolving Prop 65 claims.

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Natural Products are Not Immune from Prop 65 – Beta Myrcene is a Listed Chemical

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The Conkle firm recently wrote about personal care product ingredients that are found in nature that are nonetheless among those that have been identified by the state of California to be “chemicals known to the State of California to cause cancer” under California’s Proposition 65.

On March 27, 2015, the Office of Environmental Health Hazard Assessment (“OEHHA”) added beta-myrcene (CAS No. 123-35-3) as a chemical known to cause cancer under Proposition 65.   This means that enforcement actions may commence starting March 27, 2016. Beta-myrcene is a natural constituent of food plants, such as hop, bay, verbena, lemongrass, citrus, pomegranate, and carrot, and of their juices and essential oils. Beta-myrcene is used as a fragrance in cosmetics and soaps, many of which are positioned  as “natural” products.  Other ingredients that are popularly used in “natural” beauty products are joining the list – check back for our additional blog posts on those in the near future.

In addition to such ingredients, businesses should be careful not to overlook diethanolamine (DEA), coconut oil diethanolamine (cocamide DEA) and benozphenone – three chemicals that became subject to enforcement action in June 2013 and which remain a favorite of Prop 65 plaintiffs. Thousands of companies, with particular focus on beauty industry manufacturers, distributors and retailers have been hit with Notices of Violation over these chemicals.

Beauty companies should review their current formulations to determine whether any of their products contain an ingredient that is or may be on the Proposition 65 list, or whether any of their products contain an ingredient that may cause an exposure to a Proposition 65 chemical. Companies should work closely with their manufacturer or supplier, and have strong contracts to insulate them from Proposition 65 liabilities. Companies should also consider being pro-active by reformulating chemicals out of their products early on, if possible.  If a Notice of Violation is received, contact counsel with experience in successfully resolving Prop 65 claims.

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Conkle Firm Article Explains Special Protections for Sales Representatives

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The Conkle firm published an article in the June 30, 2015 edition of the Electronics Representatives Association Southern California’s member newsletter to explain to ERASoCal members the special protections that California law provides for independent wholesale sales representatives.  Among other points, the article describes the requirements for a signed written contract, the types of information that manufacturers and distributors are required to provide to their independent sales reps, and the potential for treble damages (three times the actual damages) plus attorney’s fees for violations.

The article was written by Conkle, Kremer & Engel attorney Eric S. Engel and CK&E’s summer law clerk Ryan Fisher, a student at University of California, Irvine Law School.  CK&E is proud to be a member of ERASoCal, which is a trade association of independent manufacturers sales representative firms in Southern California’s vibrant electronics industry.  Eric has significant experience in sales commission claims, and he was lead trial counsel in the case that resulted in the first published decision in California applying the special protections of Civil Code Section 1738.10 et seq., including treble damages and attorney fees for unpaid sales commissions: Reilly v Inquest Court of Appeal Decision, Case No. G046291 (July 31, 2013)

 

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