PCPC’s California Lobby Day was a Great Success

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On April 12, 2016, Conkle, Kremer & Engel attorney John Conkle flew to Sacramento to be part of Personal Care Products Council’s delegation for California Lobby Day. The Personal Care Products Council (PCPC) advocates for the personal care products, beauty and cosmetics industry at federal, state and local levels on legislative priorities and regulatory issues.

Conferences held in the Governor’s Council Room featured presentations by Nancy McFadden (Executive Secretary to Governor Edmund G. Brown), Graciela Castillo-Krings (Deputy Legislative Secretary to Governor Edmund G. Brown, Jr.), Dr. Meredith Williams (Deputy Director of Safer Products and Workplaces Program Director, Department of Toxics & Substance Control), and Elise Rothschild (Deputy Director of the Hazardous Waste Management Program, Department of Toxics & Substance Control).  John joined teams of PCPC staff and member companies who met with legislative offices to discuss the economic impact of the industry and legislation pending before the California legislature. The day’s events were capped with a reception at which PCPC staff and members were joined by California State Legislators.

Conkle, Kremer & Engel is a proud and active member of the Personal Care Products Council.  CK&E attorneys are glad to lend their legal expertise to the PCPC and its member companies by participating in PCPC conferences and industry advocacy efforts..

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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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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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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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The Conkle Firm Will Attend Cosmoprof Asia November 12-14, 2014

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Conkle, Kremer & Engel attorneys John Conkle and Kim Sim will attend the Cosmoprof event for the Asia Pacific region in Hong Kong on Nov. 12-14, 2014.  Cosmoprof Asia will feature more than 2,350 exhibitors in the beauty industry, and expects more than 64,000 visitors from all over the world.  There will be 22 national and group pavilions.  Given the prominence of California’s personal care product industry, CK&E is proud to attend the Hong Kong event in association with the California Pavilion organized by the California Trade Alliance.  CK&E will meet with clients and correspondent counsel to facilitate business between manufacturers, distributors and vendors in the Asia Pacific region and the United States, with particular emphasis on California businesses.  Brand protection and distributor relations are always a major concern when doing business between the U.S. and Asia, and CK&E attorneys are there to help.  If you will be attending Cosmoprof Asia this year, please let us know and we will try to make arrangements for a meeting at the event.

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The Conkle Firm Successfully Defends Employee Wage and Hour Claim

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If you’re a California employer, how well do you keep track of your employees’ meal and rest periods?  California law requires that employees be provided at least a ten-minute rest period every four hours, and a 30-minute meal period after five hours.  Non-exempt employees who work more than eight hours in a day, and more than 40 hours in a week, must be paid overtime.  Employers are required to maintain accurate records of employees’ timesheets and pay.  It sounds simple, but the devil is in the details.  If you have employees, it is important to put policies in place to ensure that all employees are taking their breaks and being paid for any overtime work.

If an employee believes he or she was deprived of meal and rest periods or not paid for overtime hours worked, the employee can file a complaint with the California Labor Commissioner.  The Labor Commissioner’s Office, also known as the Division of Labor Standards Enforcement (DLSE), is the forum for adjudication of such claims.  Often, this kind of complaint is filed after an employee is terminated.  Employers should realize that, regardless of the reasons for termination, in a wage and hour claim the deck is stacked against them from the start – it is the employer’s burden to show that the employee took breaks and was properly paid.

CK&E attorneys routinely advise clients about navigating California’s complex employer workplace requirements, and advocate for clients in disputes before the California Labor Commissioner and California state and federal courts.

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Timed Out vs Youabian: The Conkle Firm Establishes that the Right of Publicity is an Assignable Property Right

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It is virtually impossible to get through a day without seeing the “right of publicity” in action.  Everywhere, there are advertisements featuring photographs of professional models and celebrities of every variety published to sell all types of products and services.  It is strange, then, that no statute or case precedent in California specifically established that models and celebrities have the ability to assign or license those publicity rights for proper use and for enforcement if their likenesses are misused.  Until now.

On September 12, 2014, the California Court of Appeal agreed with the arguments of Eric Engel of the Conkle Firm (working with co-counsel at Hall & Lim), and established the first published precedent in California that explicitly holds that the right of publicity is assignable.  In Timed Out, LLC v. Youabian, Inc., Case No. B242820, the Second District Court of Appeal finally settled a long-simmering dispute that had confused many lower courts:  Whether the right of publicity is a “personal right” that can only be exercised during lifetime by the individual owner, or whether the right of publicity is a form of intellectual property that can be freely assigned and licensed to others for use and enforcement.

The dispute had its origin many years ago, when an influential tort law treatise by famed Professor Prosser observed that the right of publicity historically derived from the “right of privacy.”  The classic form of the “right of privacy” is protection against hurt feelings and injury to personal reputation that can occur when personal information about a private individual is published without her consent.  That type of injury is considered personal in nature and cannot generally be assigned.  But, as the Timed Out decision observed, the right of publicity has evolved away from its origin into a distinctly commercial and non-personal interest.

The right of publicity is now virtually the opposite of the original right of privacy:  The right of publicity is the ability of a person to control the commercial value of the use of her image and information.  Timed Out recognizes that a person’s likeness, voice, signature or other identifying characteristics can have substantial commercial value, regardless of whether the person is a celebrity and regardless of whether the commercial value of the identified person’s “persona” is created by happenstance or by investment of great time and effort.  Timed Out finally establishes that the value created is a form of property, freely assignable by the person who owns it.

The Court of Appeal also resolved a separate important issue that is frequently in dispute in right of publicity actions:  Whether federal copyright law subsumes and preempts right of publicity claims.  Timed Out v. Youabian established that the right of publicity is distinct from copyright interests in a photograph or image, and that right of publicity claims generally are not preempted by federal copyright laws.

The effect of Timed Out LLC v. Youabian, Inc. for models, celebrities, manufacturers, advertisers and resellers is to finally establish that the right of publicity can be licensed and assigned to third parties, and enforced by third parties such as Timed Out, and that such rights are independent of federal copyright interests.  That means models and celebrities no longer have to make the difficult decision whether it is worth their time, expense and effort to pursue claims when their publicity rights are violated – they can assign the affected publicity rights to agencies such as Timed Out to pursue the claims.  Manufacturers, advertisers and resellers will no longer waste effort and time attempting to determine whether the publicity rights were assignable.  They can and should instead focus on establishing whether they had the necessary rights to use the image, photograph, likeness, voice or other identifying characteristic of the “persona” of the model or celebrity.  This puts a premium on making sure that any “model releases” obtained prior to advertising are well-written and appropriate for each particular use of the model or celebrity’s photograph, image, likeness or other identifying features.

Conkle, Kremer & Engel counsels and helps clients avoid these kinds of issues with effective model releases, licenses and assignments.  Timed Out v. Youabian demonstrates that CK&E is also at the forefront of enforcing the right of publicity when model and celebrity rights are violated.

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You Shook Hands – But Do You Have a Deal?

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Courts have held that, in business negotiations, “Handshakes are significant. When people shake hands, it means something.”  Unfortunately, they have also held that when people shake hands, “several meanings are possible.”

In Rennick v. O.P.T.I.O.N. Care, the Ninth Circuit Court of Appeal considered a party’s contention that a deal was struck when, after months of discussion and a 4-hour negotiating session, the parties “got up and circulated around the room and shook hands with each other on having made the deal.”  The Rennick case observed that a jury could reasonably find that “the handshake was confirmation of a contract, or that it was an expression of friendship and the absence of ill will after a day of hard bargaining.”  So, given the uncertainty of its meaning, should we stop shaking hands when discussing business?  Of course not.  Indeed, the Court noted that, “By custom, it is a rude insult to reject an outstretched hand in most circumstances, and to do so at the end of a long business meeting would likely prevent a future deal.”

The issue of the parties’ intent upon shaking hands is not a small one.  In August 2014, Charles Wang, the owner of the New York Islanders was sued by a hedge fund manager who claimed that the parties had shaken hands on a deal to buy the NHA hockey team for $420 million, and that Wang had breached their agreement by demanding more money.  The frustrated purchaser sued to either enforce an apparently unsigned 70-page agreement to conclude the sale of the team, or recover a $10 million break up fee that he claims was among the terms agreed upon with a handshake.

Courts struggle with this kind of issue, with or without handshakes.  In contract disputes, courts try to enforce the parties’ expressed intentions. For example, where the parties clearly express that they do not intend to be bound until they sign a formal written contract, courts will try to honor that intention by finding that no contract exists unless a written agreement was fully signed.  Indeed, negotiating parties usually can express almost any manner of requirement before an agreement becomes enforceable.  Quentin Tarantino’s civil war era film Django Unchained featured a climactic scene in which the odious character Calvin Candie extorted Dr. King Schultz into signing an outrageous contract, and then insisted that the signed contract was meaningless unless Dr. Schultz also shook his hand.  As a general point of law that was a doubtful proposition even in Mississippi in 1858, but if the parties had been careful to express that intention in their written agreement it probably would have been an enforceable prerequisite to the validity of the contract.

In reality, too often there is no such clear delineation.  If the parties do not eliminate such possibilities by an express statement of their intentions, oral expressions or an exchange of emails or text messages might create an enforceable agreement.  That is because, when the parties aren’t careful about expressing their intentions, courts are left to divine whether the parties intended an agreement with or without signatures on paper.  Courts consider testimony about what was said and evidence of what was written and the activities that took place before, during and after the time of the purported agreement to draw conclusions about what the parties’ intentions really were. Often, the parties’ contemporaneous correspondence is the most important evidence of whether the parties intended to have a binding agreement immediately, or whether the parties intended only to express their good will or intention to negotiate further.

To avoid unnecessary disputes, a cautious businessperson should make a point to express clearly his or her intentions.  The best approach is to plan ahead and be as clear as possible in a written expression as to when the deal is considered enforceable.  The Conkle law firm counsels and represents businesses in negotiations to achieve those ends, or in disputes that can arise when the businesses handled negotiations themselves and come to Conkle, Kremer & Engel attorneys only after things did not turn out as intended.

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gTLDs are Already Causing Confusion – Just Ask Wayne Knight and TMZ

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UPDATED July 15, 2015

Actor Wayne Knight (best known as Newman on Seinfeld) was forced to tweet his “proof of life” on Twitter, after a website that uses the domain name TMZ.today reported that he was killed in a traffic accident and the story went viral.  It has been reported that many users credited the story of the death of Wayne Knight because it was circulated with attribution to the website TMZ.today.  TMZ is well known as a major source of real entertainment news and celebrity gossip.  TMZ uses the domain name TMZ.com, but the domain name TMZ.today links to an entirely different website called ebuzzd.com that is actually an unrelated, deliberately fake news website – a website dedicated to hoaxes.

Wayne Knight’s concerns aside, this story presents important lessons for trademark holders and domain name registrants:  New generic Top Level Domains (gTLDs) are here and must be reckoned with.  TMZ.com is not TMZ.today, but it’s a good bet that a substantial portion of the consuming public does not know that.  Will the consuming public realize that your company website “XYZ.com” is not affiliated with XYZ.Today, XYZ.News, XYZ.Info, XYZ.Web, XYZ.Blog, XYZ.Corp, XYZ.Inc, XYZ.London, XYZ.Charity or XYZ.Porn, or any of the 600+ other non-branded gTLDs that are available now and coming online within the next two years?

For a trademark holder, it can be a daunting prospect to try to police that many possible confusing domain names, but there are cost-effective brand protection strategies and solutions.  They begin with recognizing the issue, and making sure that you have taken all appropriate steps to protect your trademarks and domain names.  The most basic step is to obtain U.S. trademark registrations for your important trademarks – especially for your primary brand.  That is the key to many of the solutions that are offered at http://trademark-clearinghouse.com/, the administrative service established by ICANN to help control issuance of gTLDs.   Then, set a strategy that includes monitoring the “Sunrise Periods,” during which registered trademark holders can take the most efficient steps to protect against spurious registrations of confusingly similar domain names with the new gTLDs.

The best and most cost-effective methods of protection against gTLD infringers and domain name cybersquatters will be discussed in future blog posts.  Available methods include preemptive registration, blocking and various forms of policing.  Conkle, Kremer & Engel routinely guides its clients to protect their valuable intellectual property and domain names, including taking proactive steps to address the new threats to trademarks posed by gTLDs.  Contact us if you have questions and need assistance.


 

UPDATE July 15, 2015:  Another example of misuse of gTLD domain extensions happened again and demonstrates that real money can change hands when gTLD domain name extensions are abused.  Twitter stock jumped on July 14, 2015 after what appeared to be the Bloomberg Business website posted a news article reporting that Twitter had received a $31 billion buyout offer.  The story was fake, but it passed for real news by being posted on a website designed as a counterfeit of the Bloomberg Business website and using a new gTLD:  www.bloomberg.market.  The real Bloomberg website is actually found at www.bloomberg.com.  To help make a convincing appearance, the www.bloomberg.market website included links back to the real www.bloomberg.com website.  Enough readers were fooled that Twitter stock price spiked after news of the purported buyout offer was picked up in legitimate media.  gTLD confusion may continue to be a problem for trademark holders until they take affirmative steps to limit the possibilities of confusion and abuse.

 

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Protecting Your Company When a Top Executive Leaves to Join a Competitor

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What do you do when a key member of your team goes to work for a rival firm? Or, perhaps worse, how do you react when you receive a competitor’s demand that your latest hire, a new sales manager, stop working for you?

John Conkle recently participated in a discussion of experienced practitioners which looked at these and related topics at the 2014 American Bar Association (ABA) Section of Litigation, Corporate Counsel Committee’s Continuing Legal Education Seminar held in Rancho Mirage, California. The topic of the presentation was what actions inside and outside counsel need to take when a top executive of the company leaves to joins a competitor, when the company’s reputation, confidential information, and business could all be at risk. The panel addressed practical and legal strategies to help navigate the pitfalls presented by this high-stakes dilemma.

Protecting Your Company - ABA 2014

John was joined on the panel by the Hon. Gail Andler, Judge of the Orange County California Superior Court; Elizabeth K. Deardorff, Associate General Counsel of Hewlett-Packard Company; and Steven A. Weiss, of Schopf & Weiss LLP, a Chicago litigation boutique firm. More than 300 attorneys from law firms and law departments throughout the United States and from several foreign countries attended this year’s seminar.

Written materials distributed at the seminar included an article written by John and Bill Garcia, Director of Legal Project Management at Thompson Hine LLP:    First Response to Surprise Departure of Top Executive to Marketplace Rival.  The article outlines first response actions to be taken by counsel in response to an executive’s departure. Bill Garcia had been scheduled to moderate the panel, which he helped conceive and orchestrate, but he was unfortunately snowed in and unable to leave Washington, D.C.

Losing a key executive to a competitor can be a serious and sensitive matter. CK&E is well versed in the options available to a company whose top executive leaves. CK&E has also represented the interests of the company acquiring the executive and employs various strategies and defenses to help resolve disputes over such hirings. CK&E lawyers have represented both sides of these issues, from recruitment of an entire sales team to competition by a former owner of an acquired business or product line.  CK&E’s vast experience in the area of employment law, non-competition and protection of trade secrets allows the firm to efficiently assist in-house counsel to reach a desired objective with a minimum of business disruption.

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