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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Prove It! Conkle Firm Attorney Publishes National Article

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Conkle, Kremer & Engel attorney Eric S. Engel has extensive experience in matters affecting manufacturers, distributors and sales representatives.  From drafting and negotiating contracts between principals and agents to litigating disputes over such matters as commissions and trade secrets, Eric brings deep knowledge of the dynamics of the independent commissioned sales relationships to the benefit of clients across a wide range of industries.  Among his achievements is leading the trial team to a jury trial verdict and judgment of $6.2 million in treble damages against a manufacturer who cheated a commissioned sales representative.  The judgment was fully upheld on appeal in the precedent-setting decision of Reilly v. Inquest Technology, Inc., 218 Cal. App. 4th 536 (2013).

Eric has been recognized as a “Rep Savvy Attorney” by the Manufacturers & Agents National Association (MANA).  Rep Savvy Attorneys are acknowledged for their acumen in handling disputes involving principals and agents concerning independent commissioned sales relationships.  In that role, Eric is pleased to offer his legal insight through legal articles published in MANA’s monthly magazine, Agency Sales, which receives national distribution.  Most recently, Eric wrote an article on preserving evidence to support your claims and defenses when a dispute arises:  Prove It!  Why Reps and Principals Need to Keep the Evidence, Agency Sales Magazine, May 2015

The Prove It! article focuses on the need to document the significant events that arise in parties’ commercial relationships, starting with a signed written contract that correctly states the terms of the parties’ agreement in a straightforward manner.  Then, events during performance, such as exceptions to the contractual terms and issues in obtaining performance by the other party, should be documented in plain and clear English by email or even by good old letters or faxes.  Documents that were created during the relationship should be carefully saved – a document that once existed but cannot be located can be as bad or worse than a document that never existed in the first place, as it raises the potential for spoliation of evidence penalties that can be very serious.  The Prove It! article is written for agents and principals, but the information contained in the article can be applied to almost any commercial situation.

CK&E attorneys are well versed in commercial disputes of all types and are ready to help you document your position and maintain good records of what you documented, so that you can position yourself as strongly as possible if a dispute arises.

 

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Last Call for 2013 CARB Survey Submissions; Deadline for 2014 Survey Coming Soon

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The limited reprieve granted to small businesses for complying with the 2013 Consumer and Commercial Products Survey is coming to an end: Small businesses – defined as companies with 25 or fewer employees – must report 2013 sales and formulation data to the California Air Resources Board (CARB) by no later than July 1, 2015.

For other businesses, the deadline to report 2013 data has passed. Unless they have been granted an extension from CARB, formulators were required to comply by April 1, 2015 and all other businesses, by March 1, 2015.

The 2013 Consumer and Commercial Products Survey is part of a comprehensive three-year data collection effort by CARB, which is authorized by law to collect data about chemically formulated products. The Survey collects formulation data and sales information for chemically formulated consumer and commercial products sold or supplied for use in California during the 2013 calendar year. Compliance with the Survey is mandatory.

The Survey is remarkable in its breadth, targeting virtually all consumer and commercial products. The Survey requires that each “responsible party” listed on the label of a consumer or commercial product that was sold or supplied for use in California during the calendar year, and falls into a category listed on that year’s Survey Category List, is required to report detailed product ingredient information, as well as annual sales on a per-product basis, to CARB through the online Consumer Products Reporting Tool.

The general categories of consumer products that are subject to reporting in 2013 are personal care products, adhesives, sealants and related products, household and institutional products, pesticide products, solvent and thinning-related products, vehicle and marine vessel aftermarket products, and aerosol coating products.

In addition, updated data for the 2014 and 2015 calendar years must also be reported to CARB. Businesses who are required to report should plan for timely compliance with the 2014 Survey, which opens on July 1, 2015. The deadline for reporting 2014 Survey data – including 2014 sales – is November 1, 2015. In addition, CARB expects to begin collecting 2015 data on July 1, 2016 with all 2015 data due by November 1, 2016.

Conkle, Kremer & Engel provides expert guidance to clients as they navigate compliance with California’s complex and ever-changing regulatory requirements, including the Consumer and Commercial Products Survey.

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California ARB Announces Extensions to Respond to 2013 Survey

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On February 19, 2015, California Air Resources Board extended the response time to the 2013 Consumer and Commercial Products Survey (2013 Survey).  But be careful – there are different extensions for different groups, and if businesses do not fall into the “Formulators” or “Small Business” groups, then they can only receive an extension if they apply by submitting the required email request by February 27, 2015.

Additional Extension Requests

The California Air Resources Board (ARB) recognized the substantial resources required to complete the 2013 Consumer and Commercial Products Survey (2013 Survey). In some cases, ARB announced, companies may need extra time to complete reporting of 2013 data beyond the 90 statutorily required days and the additional 90-days ARB staff already issued due to the 2013 Survey scope. Below is a summary of the additional extension request process announced by ARB.

1.   Formulators: All formulators will receive a 30-day extension to submit formulation data to ARB. The due date for formulators is extended to April 1, 2015.  Formulators automatically receive the extension and do not need to send an email to request one.

2.   Small Businesses: Responsible parties who are also a small business have an additional extension until July 1, 2015 for reporting 2013 data. For purposes of the 2013 Survey, a small business is defined as a company or entity with 25 or less full-time, part-time and contract employees combined. The 25 employee count must also include seasonal workers. For example, a salon with their own product line of hair care products with a 12 part-time employees would quality for this extension. Small businesses automatically receive the extension and do not need to send an email to request one.

3.   Responsible Parties (other than those who qualify as “Small Businesses”): Responsible party requests will be handled on a case-by-case basis, and must request an extension by email no later than February 27, 2015.  To request an extension from the original survey due date of March 2, 2015, responsible parties must email csmrprod@arb.ca.gov by February 27, 2015 to make a request, and the email must have the following title: “2013 Survey Additional Extension Request – Company Name (add your company name here)”.   In order to receive an extension, responsible parties will need to provide the following information:

a) When did you learn about the 2013 Survey?

b) When did you start working on the 2013 Survey?

c) When did you finish your data collection effort for the 2013 Survey?

d) Approximately how many products will you report? labels?

e) How far along are you in entering data into the Consumer Products Reporting Tool (CPRT)?

f) How much time are you requesting to complete the 2013 Survey?

ARB staff will notify each company the results of their request via email.

ARB also reminded survey participants to submit complete data reports, as partial data sets will not be accepted.

Conkle, Kremer & Engel attorneys keep abreast of the latest developments in California regulatory laws to guide the firm’s clients through the shifting labyrinth that they must navigate.

 

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Beware of Scam Trademark Solicitations

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Trademark applicants and registrants take notice:  There are increasing numbers of domestic and international outfits that issue trademark compliance and renewal notices that look like legitimate invoices or governmental requests.  In actuality, these notices are sent by private individuals or entities trying to make a quick buck.  Some of these notices are solicitations from companies offering to file renewals with the United States Patent & Trademark Office (USPTO) for an exorbitant fee.  Using deceptively official-sounding names such as “United States Trademark Registration Office”, “Trademark and Patent Office” and “Patent & Trademark Agency”, these companies charge excessive fees for routine or unnecessary services or worse, take your money and disappear.  Others, such as IP Data in the Czech Republic, seek to charge a “filing fee” of over $2,400 to publish your trademark in their own private Internet database – an expensive exercise that is not an application for trademark registration and confers no trademark rights.

This problem has become so widespread and severe that the World Intellectual Property Organization (WIPO) published a list of known international trademark registration scams.   The USPTO keeps a similar scammer database, identifying the following organizations that sent non-USPTO solicitations, prompting consumer complaints to the USPTO:

  • TM-DB Register of Protected Trademarks
  • Trademark and Patent Office
  • Trademark Compliance Center (See an example of a scam solicitation sent by TCC)
  • Trademark Registration and Monitoring Office
  • United States Trademark Registration Office
  • Patent & Trademark Agency
  • United States Trademark Maintenance Service
  • U.S. Trademark Compliance Service
  • WDTP
  • WIPT
  • TM Collection
  • TM Edition
  • Patent Trademark Register
  • Register of International Patents and Trademarks
  • Trademark Renewal Service
  • Trademark Safeguard – Trademark Monitoring Service
  • Intellectual Property Agency Ltd.
  • IOPR – Intellectual Property Register
  • GBO, Inc.
  • Intellectual Property Services USA Incorporated
  • USTM Information Services
  • Brand Registration Office

In October 2014, a New York firm successfully won a lawsuit against “Patent & Trademark Agency LLC” for unfair competition and deceptive marketing practices, putting the company out of business.  A Final Consent Judgment was entered against Patent & Trademark Agency LLC, by which it agreed to permanently discontinue marketing and selling trademark registration or renewal services in the United States.

If you receive any unexpected email or correspondence regarding a trademark registration, you should immediately contact the USPTO or your counsel to verify the veracity of the sender and the correspondence.  Conkle, Kremer & Engel assists individuals and companies in all aspects of intellectual property protection, including the filing and maintenance of trademark registrations – and we know how to discriminate legitimate vendors from scammers.

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California Proposition 65 Warnings for DINP Exposure are Required Soon

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Starting December 20, 2014, products sold in California that contain diisononyl phthalate (DINP) will require a Proposition 65 warning.

DINP is found is many soft plastic and vinyl products.  DINP is used as a plasticizer in a wide variety of products including apparel, footwear, sporting goods, gloves, fashion accessories, school supplies, shower curtains, bath mats and other home accessories, garden hoses, toys, vinyl flooring, and electrical wire and cables.

DINP was added to the Proposition 65 list of chemicals on December 20, 2013 as a chemical known to the State of California to cause cancer.  By law, the warning requirements go into effect one year after the listing.  Accordingly, the Proposition 65 warning requirement for products causing an exposure to DINP will start on December 20, 2014.

Businesses that manufacture, sell, or distribute products in California containing DINP are required to provide a warning to consumers that the product contains a chemical known to the State of California to cause cancer.  The warning is required unless the exposure is so low as to pose no significant risk to cancer.  The Office of Environmental Health Hazard Assessment (OEHHA) has not established a safe harbor level for DINP.

The phthalate DINP is presently banned in certain children’s toys and products in concentrations of greater than 0.1 percent under the Consumer Product Safety Improvement Act (CPSIA) of 2008.  Other phthalates that are already on the Proposition 65 chemical list include di (2-ethylhexyl) phthalate (DEHP), di-n-butyl phthalate (DBP), di-n-hexyl phthalate (DnHP), butyl benzyl phthalate (BBP) and di-isodecyl phthalate (DIDP).

Companies that have not reformulated their products to remove DINP, or that fail to provide a Proposition 65 warning on products containing DINP, by December 20, 2014 are at risk of receiving a “Notice of Violation” from private enforcers seeking tens of thousands of dollars in penalties and attorneys’ fees.  A Notice of Violation typically precedes a lawsuit for violation of Proposition 65.

Conkle, Kremer & Engel has extensive experience in the area of Proposition 65.  CK&E provides businesses with legal counseling and guidance on compliance with Proposition 65.  CK&E also regularly assists businesses in responding to Notices of Violation and defending claims for violation of Proposition 65 in litigation.

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