Do You Have to Pay Your Summer Interns?

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Do You Have to Pay Your Summer Interns?
Do I Have to Pay My Interns?

Spring will soon draw to a close.  As you prepare for the arrival of your summer interns, make sure you have asked yourself this question: Do I need to pay my interns?

The easiest answer is generally, YES!  But the easiest answer is not the whole story, because you do not have to pay your interns in accordance with wage and hour laws if the company-intern relationship meets the federal (and state, as applicable) test.

The U.S. Department of Labor’s New Test

Earlier this year, the U.S. Department of Labor helped private businesses out.  It announced that it would be using a new (more employer-friendly) test to determine whether an intern is an “employee” that must be paid in compliance with wage and hour laws.  Whether an intern must be paid in compliance with federal wage and hour laws now depends on seven factors:

  • The extent to which the intern and the company clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa;
  • The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions;
  • The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit;
  • The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar;
  • The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning;
  • The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and
  • The extent to which the intern and the company understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

According to the DOL, “no single factor is determinative.”  Thus, companies need to conduct a case-by-case analysis of each internship position to determine whether that intern should be paid.

I’m Located in California.  Do I Need to Be Concerned About State Laws Controlling Wage and Hour Requirements?

Here, the clear answer is YES!  For many years, the California Department of Labor Industrial Relations, Division of Labor Standards Enforcement (“DLSE”) has relied on the DOL’s old six-factor test.  For now, California businesses should also look to the DOL’s old six-factor test to determine whether they need to pay their interns.

The DOL’s adoption of this new seven-factor test this year followed a decision in the Ninth Circuit (which covers California).  In 2017, the federal Ninth Circuit Court of Appeals made a predictive statement, that the California Supreme Court would no longer use the old DOL test, and would instead apply a test more similar to the one set forth above.  Benjamin v. B & H Educ., Inc., 877 F.3d 1139 (9th Cir. 2017).  However, this statement is only predictive of what the federal court thinks the California courts would do, so it is not actually controlling law in California.

Thus, until the California state agencies and courts take a position on whether they will follow the Ninth Circuit and the DOL, companies should also check that they have considered the DLSE’s interns test to make their decision to pay (or not pay) interns.  That requires an analysis under the DOL’s old six-factor test:

  • The internship, even though it includes actual operation of the facilities of the company, is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The company that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The company and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If you have not examined your internship programs with these federal and state legal considerations in mind, you should do so immediately, before your summer interns arrive.  Review your internship materials, including your recruitment postings, company policies, and any other documents you anticipate having the intern sign before starting the summer program.

Conkle, Kremer & Engel attorneys are experienced with counseling employers in the face of a constantly changing legal landscape in employment law, and with helping companies identify and reduce areas of exposure to liability for employment claims, including wage and hour, discrimination, harassment, and retaliation claims.

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2
MAY
0

Banking and Finance, Beauty Industry, Employment Law, Fashion, Food, Craft Beer and Nutrition, Manufacturing, Real Estate & Construction, Sales, Technology

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Consumers are Exposed to Extreme Risks from Counterfeit Products

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Consumers are Exposed to Extreme Risks from Counterfeit Products
Some consumers may view offers of brand name goods from sellers not within the manufacturer’s regular distribution chain as just a way to “get a good deal.”  But those offers can result in purchasers receiving counterfeit products, which are no bargain and can expose unknowing consumers to some of the worst risks imaginable.

At the very least, counterfeit products are frauds – they are not from the manufacturer whose trademark appears on the product, so the consumer is cheated out of the quality that the brand represents.  But in reality, the consumer has absolutely no idea what the contents and construction of a counterfeit product may be – it is a product of unknown origin, regardless of whether the consumer purchased from a known reseller.  Because virtually any product a consumer can purchase can be counterfeited, consumers can be placed in great danger from unknowingly purchasing substandard products.  A couple of recent events in the news highlight the extreme risks of counterfeit products.

In April 2018, the Los Angeles Police Department announced that it had raided sellers of supposedly discount brand name cosmetics, and seized $700,000 of counterfeits.  Consumers had complained to the brand manufacturers that makeup products they purchased were causing rashes and bumps on their skin.  The products were determined to be counterfeits that tested positive for high levels of bacteria and animal waste.  This is undoubtedly because the counterfeits are not manufactured with any quality controls or regulatory oversight – they are the result of a black market, pirate operation.  LAPD Detective Rick Ishitani was quoted in the press as saying, “Those feces will just basically somehow get mixed into the product they’re manufacturing in their garage or in their bathroom — wherever they’re manufacturing this stuff.”  One of the brands asserted to be counterfeit was Kylie Cosmetics. Kylie Jenner’s sister, Kim Kardashian West, tweeted:  “Counterfeit Kylie lip kits seized in LAPD raid test positive for feces. SO GROSS! Never buy counterfeit products!”

The risks to consumers of counterfeits unfortunately do not stop even there.  An even more extreme case of product counterfeiting hit the press a few days later.  Tragically, famed rock artist Prince died in April 2016.  It was soon determined that he had died from an overdose of fentanyl, an extremely powerful and dangerous synthetic opioid.  But in April 2018, local prosecutors announced that Prince had consumed the fentanyl by taking tainted counterfeit Vicodin, a brand name medication of AbbVie, Inc.  There was no determination as to how Prince obtained the counterfeit Vicodin pharmaceuticals.  “In all likelihood, Prince had no idea he was taking a counterfeit pill that could kill him.  Others around Prince also likely did not know that the pills were counterfeit containing fentanyl,”  Carver County, Minnesota Attorney Mark Metz was quoted as saying at a news conference.

Some believe that counterfeits can be identified by the price alone, and warn against buying brand name products at steep discounts.  While an inexplicably low price is certainly a red flag of a potential counterfeit, in fact counterfeit products are often sold to consumers at prices very close to those of the brand name product.  This is often because many intermediaries have handled the product, taking a profit with each transaction, in the course of a murky gray market distribution process.

The popularity of online sales make the risks even worse for consumers, as it is nearly impossible for the consumer to inspect the product before purchase and delivery, and it is often very difficult for consumers to determine who is actually selling the product online.  For example, many popular online sellers act as marketplaces for innumerable third party sellers, and a purchaser cannot always determine which seller will actually deliver the product purchased.

If you are a consumer, you really need to exercise great caution when considering purchases of brand name products from sellers who are not in that manufacturer’s authorized distribution channels.  It generally matters little whether the seller is known to the consumer – it only matters where the seller obtained the product.

If you are a brand name manufacturer or trademark holder who suspects that unauthorized parallel market sellers may be offering counterfeit products, you are well advised to promptly contact counsel well-versed in the issues and methods of enforcement of your intellectual property rights.

 

 

 

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22
APR
0

Beauty Industry, Brand Protection, Copyrights, Fashion, Food, Craft Beer and Nutrition, Patents, Personal Care Products, Sales, Trademarks, Unfair Competition

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The Unintended Industry of Proposition 65: Plaintiffs’ Lawyers

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The Unintended Industry of Proposition 65: Plaintiffs’ Lawyers
One of the unfortunate and unintended consequences of California’s extensive regulatory efforts has been to create a small industry of plaintiffs’ law firms and repeat clients apparently determined to extract settlement money from businesses.  Proposition 65 was implemented with the best spirit of consumer protection in mind.  But those regulations have since transmogrified into tools that primarily profit a small group of plaintiffs’ attorneys, to an extent that has become increasingly burdensome for consumer product manufacturers, resellers and property owners.

Proposition 65 provides for private enforcement actions, which enable individuals or groups to enforce the statutes against consumer products companies, property owners and others.  Prop 65 is a “right to know” law intended to help consumers make informed decisions about their purchases. The combination of a growing list of substances, difficulty in determining exposure levels with scientific certainty, sparse judicial and government oversight, and a right to attorneys’ fee awards under the statute, have transformed Prop 65 into a lucrative business model for a handful of law firms and closely-related consumer groups.  Hundreds of Prop 65 actions are settled each year, with about 70% of the settlement money paid being allocated to attorneys’ fees for the plaintiffs’ lawyers.

California’s published statistics from 2013-2017 show an accelerating trend of more Notices of Violations filed each year.  In 2016 alone, for example, 1,576 Notices of Violation were sent to businesses selling products in California, while 2,710 Notices of Violation were sent in 2017.  The attorneys’ fee provisions of Prop 65 undoubtedly have much to do with that trend.  In 2016, 760 judgments or settlements were reached totaling $30,150,111, of which $20,062,247 was paid as attorneys’ fees to plaintiffs’ lawyers.  In 2017, 688 judgments or settlements were reached totaling $25,767,500, of which $19,486,362 was paid as attorneys’ fees to plaintiffs’ lawyers.

With that kind of monetary motivation, it is easy to see why some law firms make a practice of filing and serving Prop 65 Notices of Violations.  This effectively creates a small industry of lawyers who pursue Prop 65 claims, often for a small group of repeat-plaintiffs who appear again and again with the same lawyers.  Public records identify at least the following law firms, attorneys and their associated plaintiff clients, who pursue multiple Prop 65 claims:

  • The Chanler Group
    • Represents repeated Prop 65 plaintiffs Anthony Held, Ph.D., P.E.; Whitney R. Leeman, Ph.D; Mark Moorberg; John Moore; Paul Wozniak; and Laurence Vinocur
  • Lexington Law Group
    • Represents repeated Prop 65 plaintiff Center for Environmental Health
  • Yeroushalmi & Yeroushalmi
    • Represents repeated Prop 65 plaintiff Consumer Advocacy Group, Inc.
  • Aqua Terra Aeris Law Group
    • Represents repeated Prop 65 plaintiffs Environmental Research Center; and Center for Advanced Public Awareness, Inc. (“CAPA”)
  • Law Office of Daniel N. Greenbaum
    • Represents repeated Prop 65 plaintiff Shefa LMV, Inc.
  • Klamath
    • Represents repeated Prop 65 plaintiff Mateel Environmental Justice Foundation
  • Lucas T. Novak
    • Represents repeated Prop 65 plaintiff APS&EE, LLC
  • Custodio & Dubey
    • Represents repeated Prop 65 plaintiff Ecological Alliance, LLC
  • Sheffer Law Firm
    • Represents repeated Prop 65 plaintiff Susan Davia
  • O’Neil Dennis, Esq.
    • Represents repeated Prop 65 plaintiff Alicia Chin
  • Bush & Henry, Attorneys at Law, P.C.
    • Represents repeated Prop 65 plaintiff Michael DiPirro
  • Brodsky & Smith, LLC
    • Represents repeated Prop 65 plaintiffs Gabriel Espinosa; Kingpun Chen; Precila Balabbo; Ema Bell; and Anthony Ferreiro
  • Law Offices of Stephen Ure
    • Represents repeated Prop 65 plaintiff Evelyn Wimberley
  • Lozeau Drury
    • Represents repeated Prop 65 plaintiffs Environmental Research Center, Inc.; and Community Science Institute
  • Robert Hancock of Pacific Justice Center
    • Represents repeated Prop 65 plaintiff Erika McCartney
  • Khansari Law Corporation
    • Represents repeated Prop 65 plaintiff The Chemical Toxin Working Group, Inc.
  • Law Office of Joseph D. Agliozzo
    • Represents repeated Prop 65 plaintiff Sara Hammond
  • Glick Law Group
    • Represents repeated Prop 65 plaintiff Kim Embry

If you are unfortunate enough to receive a Prop 65 Notice of Violation from one of these lawyers or plaintiffs, or from any others, don’t ignore it.  The problem will probably not go away by ignoring it, and prompt action can help keep the matter from getting far worse.  Handling it yourself is also usually not a great plan.  Remember that the plaintiffs who sent the Notice of Violation are almost always represented by counsel experienced in Prop 65 matters.  You should contact experienced counsel to help you respond promptly and handle the matter with minimum disruption to your business.

Conkle, Kremer & Engel attorneys have many years of experience advising clients about how to avoid regulatory compliance issues, and we regularly defend clients against Notices of Violations of Proposition 65 and other California regulations. CK&E uses its extensive experience to help clients who are accused of regulatory violations quickly and effectively resolve claims, so clients can focus on growing their business.

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19
MAR
0

Beauty Industry, Fashion, Food, Craft Beer and Nutrition, Litigation, Arbitration and Mediation, Manufacturing, Personal Care Products, Proposition 65, Real Estate & Construction, Regulatory Compliance, Technology

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The Conkle Firm Addresses The Future of Fashion

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The Conkle Firm Addresses The Future of Fashion
On January 30, 2018, the USC Gould Law School presented “The Future of Fashion,” a panel discussion co-hosted by the IP & Technology Law and Art Law Societies at USC.  Conkle, Kremer & Engel attorney Aleen Tomassian was one of the expert panelists invited to discuss the current state of intellectual property law as it affects the fashion industry, and to discuss how recent court decisions affect the future of the industry.

USC Panel – Aleen Tomassian (Center)

A major point of discussion involved the impact of the Supreme Court’s recent Varsity Brands v. Star Athletica decision, a copyright case that concerned design features on cheerleading uniforms.  Historically, articles of clothing have not generally afforded copyright protection because they are considered “useful articles.”  But the Supreme Court held that the design features of the uniforms in issue were protectable because they were works of art which could be imagined separately from the useful article into which they were incorporated.    Many have suggested that the holding in Star Athletica signals that broad copyright protection would be available for articles of clothing.  But the USC panel discussion made  clear that Star Athletica affirmed that copyright protection is available for design elements as distinct from “useful articles,” and the recognized protection is not available to clothing in general.

The panel addressed the unique intellectual property issues that the fashion industry faces.  There was a broad discussion about the economic and moral impact of “copycat” designs on society and the effects of “knockoffs” on innovation.  Since fashion designs are not specifically protected under U.S. law, the conversation highlighted how attorneys skilled in fashion law use a combination of available forms of protection, including copyright, trademark, trade dress and design and utility patents.  A recent example is the pending case of Puma SE v. Forever 21, Inc., USDC Central District of California Case No. 2:17-cv-02523, in which Puma asserts that it has distinctive shoe designs in a line called Fenty Shoes that is promoted by singer Rhianna.  Puma contends that Forever 21 engaged in deliberate copying of some of its Fenty Shoes designs, notably the popular “Creeper”, “Fur Slide” and “Bow Slide” models.  To protect its designs, Puma alleged infringement of design patents, trade dress and false designation of origin under the Lanham Act, and copyright.  Puma’s copyright claims attempt to leverage the Star Athletica decision by contending that certain elements of the Fenty Shoes “can be perceived as a two- or three-dimensional works of art separate from the Fenty Shoes” and “would qualify as protectable pictorial, graphic, or sculptural works – either on their own or fixed in some other tangible medium of expression.”   Under the Star Athletica standard, to allow this type of copyright infringement claim, the court will have to determine that “the separately identified feature has the capacity to exist apart from the utilitarian aspects” of the shoe.  “If the feature is not capable of existing as a pictorial, graphic, or sculptural work once separated from the useful article” – the shoe – then it is a utilitarian feature and not subject to copyright protection.

The attorneys at Conkle, Kremer & Engel have years of experience navigating the complex legal and intellectual property issues faced by clients in the fashion industry.  Our attorneys help clients protect their brands to ensure their continued success in this demanding and fast-paced industry.

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6
FEB
0

Brand Protection, Copyrights, Fashion, Intellectual Property, Patents

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What’s in Your Packaging? Prop 65 Applies to PVDC

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What’s in Your Packaging? Prop 65 Applies to PVDC
Can your product wrap subject you to Proposition 65 warning requirements?  You bet.  California has added vinylidene chloride to its long list of chemicals to which Proposition 65 applies, effective on December 29, 2017.  The Office of Environmental Health Hazard Assessment (OEHHA) has not established a safe harbor level for vinylidene chloride, although that remains under consideration.

Vinylidene chloride is used in the production of polyvinylidene chloride (PVDC) copolymers. PVDC was developed by Dow Chemical Company, and was at one point used in the production of the popular food wrap product, Saran Wrap. PVDC has characteristics ideal for food packaging because it has low permeabiltiy to water vapor and gasses. While use of PVDC in Saran Wrap was later phased out due to cost and environmental concerns, other copolymers of vinylidene chloride are still commonly used in food packaging, including box overwrap, vertical form fill seal, horizontal form fill seal, and pre-made bags. Vinylidene chloride is also extensively used in a variety of other packing materials, as flame retardant coating for fiber and carpet backing and in piping, coating for steel pipes, and adhesive applications. Other common consumer products that may contain vinylidene chloride include cleaning cloths, filters, screens, tape, shower curtains, garden furniture, artificial turf, doll hair, stuffed animals, fabrics, fishnet, and shoe insoles.

Manufacturers, distributors and retailers are required to provide Prop 65 warnings to workers and consumers who are exposed to vinylidene chloride.  Companies have one year from the listing date to comply with Prop 65.  Companies that have not reformulated their products to remove vinylidene chloride, or that fail to provide a Proposition 65 warning on products containing it, by December 29, 2018 are at risk of receiving a “Notice of Violation” from private enforcers seeking to gain thousands of dollars in penalties and attorneys’ fees.  A Notice of Violation typically precedes a lawsuit for violation of Proposition 65.

The listing of vinylidene chloride as a chemical known to cause cancer by OEHHA is a reminder that not only product contents, but also packaging materials, are included within Prop 65 compliance requirements.  As we previously reported, since December 2014, products sold in California that contain diisononyl phthalate (DINP) have required a Proposition 65 warning.  DINP is found is many soft plastic and vinyl products, and purported violations have been found in seemingly innocuous packaging, such as gift bags for cosmetic products.

Conkle, Kremer & Engel has many years of experience advising clients with respect to Proposition 65 and other regulatory compliance issues. CK&E attorneys help clients stay out of legal crosshairs by working with them to ensure their products continue to meet all legal requirements, and helping them plan for foreseeable changes in the law.

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7
JAN
0

Beauty Industry, Fashion, Food, Craft Beer and Nutrition, Manufacturing, Personal Care Products, Proposition 65, Regulatory Compliance

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Counterfeits Can Take the Joy Out of the Holidays

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Counterfeits Can Take the Joy Out of the Holidays
As the holiday shopping season reaches peak fervor and consumers seek out the best deals available on hot products, gift-givers are more at risk of purchasing counterfeit products of all kinds.  Recently, news articles have warned of counterfeit Fingerlings – the latest “it” toy – along with fake versions of popular electronics, clothing, personal care products, and many other types of goods.  Government bureaus like the U.S. Customs and Border Patrol regularly release holiday bulletins advising of the escalating volume of phony products entering the United States (for example, https://www.ice.gov/news/releases/buyer-beware-counterfeit-goods-and-holiday-shopping-season).  Counterfeits are far from harmless.  Not only are these counterfeit goods generally inferior to authentic products in both quality and safety, fake products are fraud, theft, and infringements of valuable trademarks and other intellectual property.  Sales of counterfeit products can even be criminal.

As a consumer, what can you do to help ensure you’re receiving the genuine article?  The most obvious method is to avoid unfamiliar sources and to buy directly from the manufacturer’s website or from an authorized retailer whenever possible.  If buying on websites like Amazon and eBay (where products are often actually sold by unrelated third parties), it helps to make sure that the seller of the product is the manufacturer or Amazon itself, not an unknown third party.  Often times, third party sellers do not have the ability or desire to properly perform checks on the goods they are selling, and in many cases the third party sellers never actually possess the products – when they receive your order they simply forward the product from a warehouse they have never even seen.  While outlets like Amazon and eBay have some anti-counterfeiting policies and procedures, experience has shown that not every fake product will be screened out.  Consumers should also check the price of the goods to ensure that it is not abnormally low, and examine the packaging and presentation of the product as depicted on the website to help determine whether the product might be fake or foreign-labeled goods.  Compare the look of the product offered with the same product on the manufacturer’s website – if it’s different, that’s a red flag.  Consumers should also not hesitate to contact the manufacturer if they suspect that they have received counterfeit or foreign-labeled goods – in addition to being the primary victims, consumers are often the first line of defense in the fight against counterfeiting.

As a manufacturer or trademark owner, what can you do when you discover your products being sold in an unauthorized channel, with risk of counterfeiting?  Conkle, Kremer & Engel has extensive experience helping manufacturers and distributors to investigate and, when necessary, litigate counterfeit and other trademark- and intellectual property-infringement claims.  CK&E attorneys are well-versed in the careful initial steps that should promptly be taken when sales of illicit products are suspected.  If the seller is cooperative, litigation can often be avoided.  But if the seller is not, that is a strong indicator that the seller has been selling, and will continue to sell, infringing products unless stopped through litigation.  Whatever you choose to do, consult experienced counsel and decide on your course of action promptly – unreasonable delays can seriously harm your ability to protect your rights.

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14
DEC
0

Advertising and Labeling, Beauty Industry, Brand Protection, Copyrights, Fashion, Intellectual Property, Manufacturing, Personal Care Products, Sales, Technology, Trademarks, Unfair Competition

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WARNING: Are Your Products and Websites Ready for the New Prop 65 Requirements?

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WARNING: Are Your Products and Websites Ready for the New Prop 65 Requirements?
California’s Office of Health Hazard Assessment (OEHHA) has issued new Proposition 65 Warning Regulations that will go into effect on August 30, 2018. It is important for companies to understand the changed regulations and be proactive in adapting their product labels and even internet marketing to adapt to the new regulations.  The coming changes have introduced a variety of new concepts, imposing additional burdens on businesses selling their products in California, and making it easier for plaintiff Prop 65 attorneys and groups to bring costly private enforcement actions.

The OEHHA has made significant changes to the safe-harbor language requirements that govern the language, text, and format of such warnings. The new regulations introduce the concept of a “warning symbol,” which must be used on consumer products, though not on food products. The “warning symbol” must be printed in a size no smaller than the height of the word “WARNING,” and should be in black and yellow, but can be in black and white if the sign, label, or shelf tag for the product is not printed using the color yellow.

Warnings must now also specifically state at least one listed chemical found in the product and include a link to OEHHA’s new website www.P65Warnings.ca.gov.  These are examples of the new format for more specific warnings:

  • For exposure to carcinogens: “ WARNING: This product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.”
  • For exposure to reproductive toxins: “ WARNING: This product can expose you to chemicals including [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.”
  • For exposure to both carcinogens and reproductive toxins: “ WARNING: This product can expose you to chemicals including [name of one or more listed chemicals], which is [are] known to the State of California to cause cancer, and [name of one or more chemicals], which is [are] known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.”

Certain special categories of products, such as food and alcoholic beverages, have a specialized URL that must be used. For example, warnings on food products must display the URL www.P65Warnings.ca.gov/food.

Recognizing that many consumer products have limited space “on-product” to fit the long-form warnings, the OEHHA has enacted new regulations allowing abbreviated “on-product” warnings. This short warning is permissible only if printed on the immediate container, box or wrapper of the consumer product. An example of the required format for the abbreviated warnings is:

  • “ WARNING: Cancer and Reproductive Harm – www.P65Warnings.ca.gov

The new regulations also specifically address internet sales for the first time. Warnings must be provided with a clearly marked hyperlink on the product display page, or otherwise prominently displayed to the purchaser before completion of the transaction.  It will not be sufficient if the product sold on the internet bears the required label, but the internet point of purchase listing does not.

The particular requirements for each specific product can vary, so manufacturers and resellers are well-advised to seek qualified counsel to review their situation before committing to potentially costly label and website changes that may not comply with the new requirements.  Conkle, Kremer & Engel attorneys stay up to date on important regulatory developments affecting their clients in the manufacturing and resale industries, and are ready to help clients navigate the changing regulatory landscape in California and elsewhere.

Although the new regulations take effect August 30, 2018, and the new warning labels are required for products manufactured after that date, companies can begin using the changed labels now. It is definitely not advisable to wait until August 2018 to begin making the required changes.

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17
NOV
0

Advertising and Labeling, Alcoholic Beverages, Beauty Industry, California Trade Regulations, Fashion, Food, Craft Beer and Nutrition, Manufacturing, Personal Care Products, Proposition 65, Regulatory Compliance, Sales, Technology

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California Employers’ Risks of PAGA Exposure

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California Employers’ Risks of PAGA Exposure
If you’re a California employer, you may have heard people refer to “PAGA” and wondered what it’s all about.  PAGA is a legal device that employees can use to address Labor Code violations in a novel way, in which employee representatives are allowed to act as if they are government enforcement agents.

The California Labor and Workforce Development Agency (CLWDA) has authority to collect civil penalties against employers for Labor Code violations.  Seems simple enough.  But in an effort to relieve an agency with limited resources of the nearly impossible task of pursuing every possible Labor Code violation committed by employers, the California legislature passed the Private Attorney General Act of 2004 (“PAGA”).  PAGA grants aggrieved employees the right to bring a civil action and pursue civil penalties against their employers for Labor Code violations, acting on behalf of the State of California as if they were the CLWDA.  If the aggrieved employees prevail against the employer, the employees can collect 25% of the fines that the state of California would have collected if it had brought the action.

Penalties available for Labor Code violations can be steep – for some violations, the state of California can recover fines of $100 for an initial violation to $200 for subsequent violations, per aggrieved employee, per pay period.  These penalties can add up to serious money, especially if the aggrieved employee was with the company for some time.  But what makes PAGA particularly dangerous for employers is the ability of employees to bring a representative action (similar to a class action), in which they can pursue these penalties for violations of the Labor Code on behalf of not only themselves, but also all others similarly situated.  Under this scheme, an aggrieved employee can bring an action to pursue penalties on behalf of an entire class of current and former employees, thereby multiplying the penalties for which an employer can be on the hook and ballooning the risk of exposure.  That risk is further amplified because PAGA also permits plaintiff employment attorneys to recover their fees if their claim is successful.

There is an upward trend in use of PAGA against California employers.  A July 2017 California Supreme Court decision, Williams v. Superior Court, exacerbated the problem for employers:  The California Supreme Court decided that plaintiff employment attorneys can obtain from employer defendants the names and contact information of potentially affected current and former employees throughout the entire state of California.  This means the PAGA plaintiffs can initiate an action and then pursue discovery of all possible affected employees and former employees throughout California, which can greatly expand the pool of potential claimants and ratchet up the exposure risk for employers.

Employers in California need to be attuned to Labor Code requirements and careful in their manner of dealing with employees, so that they avoid exposure to PAGA liability to the extent possible.  Conkle, Kremer & Engel attorneys are familiar with the latest developments in employment liability and able to assist employers avoid trouble before it starts, or respond and defend themselves if problems have arisen.

 

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19
SEP
0

Banking and Finance, Beauty Industry, Class Actions, Contracts, Business and Finance, Employment Law, Fashion, Food, Craft Beer and Nutrition, Industries Represented, Manufacturing, Real Estate & Construction, Regulatory Compliance, Sales, Technology

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The Conkle Firm Attends INTA Annual Meeting in Orlando

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The Conkle Firm Attends INTA Annual Meeting in Orlando
Conkle, Kremer & Engel attorneys Mark Kremer and Zachary Page attended the Annual Meeting of the International Trademark Association (INTA) in Orlando, Florida this week. The Annual Meeting is INTA’s largest event of the year in which intellectual property attorneys, brand owners and administrative officials gather to discuss developments and trends in trademark law in the United States and across the globe. This year’s Annual Meeting included discussions about rule changes for proceedings in the Trademark Trial and Appeal Board, the impact of TTAB decisions on later litigation, anti-counterfeiting strategies, enforcement strategies in online marketplaces and social media, and changes to international trademark prosecution systems.

CK&E regularly works with clients to identify and protect their intellectual property both in the United States and abroad, and participates in industry conferences like INTA’s Annual Meeting and others to stay abreast of the developing issues affecting the firm’s clients.

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26
MAY
0

Beauty Industry, Brand Protection, Fashion, Food, Craft Beer and Nutrition, Intellectual Property, International Trade, Manufacturing, Personal Care Products, Sales, Technology, Trademarks

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Making a Federal Case of Trade Secret Misappropriation

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Making a Federal Case of Trade Secret Misappropriation
On April 27, 2016, the Defend Trade Secrets Act (DTSA) passed the House of Representatives and went to President Obama’s desk, where it is expected to be signed.  With that, trade secret misappropriation claims will exist under federal law and can be pursued in federal courts.

The DTSA will provide businesses with more effective new tools to protect their sensitive information from misappropriation.  In the context of trade secrets, misappropriation is generally considered the acquisition of hidden information through some improper means .  The broadly structured language of the DTSA extends its protection to “all forms and types of financial, business, scientific, technical, economic, or engineering information” so long as (1) the owner has taken reasonable steps to keep the information secret and (2) the information derives its value from that secrecy.  The DTSA largely tracks the concepts of trade secrets that have long existed in most states.  But under the DTSA, plaintiffs will be able to bring claims for misappropriation of trade secrets in federal court.

Previously, trade secrets have been an outlier in the world of intellectual property.  Unlike copyright, patent and trademark claims, which receive the wider benefit and protection of federal court jurisdiction, trade secret claims have mostly been litigated in state court.  The problem with this has been that, given the diffuse and global nature of business and commerce, state courts are often not the best venue for intellectual property claims.   If a misappropriation occurs across state or national borders, a federal court is better suited to address such jurisdictional conflicts.

To gain access to the DTSA, and federal court jurisdiction, all that is required is that the “trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.”  This is generally a very low threshold, as most products and services these days are used or intended for use in at least interstate commerce – only the most localized of businesses would not be able to meet this minimal requirement.

The DTSA will confer on trade secret holders a greater ability to pursue misappropriation beyond the borders of the United States, and can even pursue remedies before the International Trade Commission.  In addition, a secondary benefit gained from access to the federal court system is a potential for more uniform decisions and precedent than the more disparate and varied state courts decisions.

Another interesting development that the DTSA will usher in relates to injunction and damages.  Injunctions are often sought in trade secret cases to prevent the information at issue from being disclosed.  Previously,  under the Uniform Trade Secrets Act (UTSA), which almost all states have adopted in some form or another, the injunction would end when the trade secret ceased to exist or after an amount of time necessary to stop any potential commercial advantage being gained from a misappropriation.  The DTSA however contains no such limitation, which presumably will give courts more discretion in applying an extended injunction.  Also, where the UTSA allows for double damages in cases of “willful and malicious misappropriation”, the language of the DTSA has upped this to treble damages.

Perhaps the biggest tool in the DTSA tool belt is the ability to seek ex parte civil seizures.  What this means is that a plaintiff can, without giving a defendant notice, seek the seizure of property if the plaintiff can demonstrate that the defendant, or someone working in concert with the defendant, is likely to “destroy, move, hide, or otherwise make such matter inaccessible to the court”.  This type of ex parte seizure is a powerful new tool that will likely allow trade secret holders to better combat harm associated with a misappropriation.  And being a powerful tool, it may be subject to misuse among competitors.

Conkle, Kremer & Engel attorneys stay current on developments that may be important to their clients concerned about commercial and intellectual property issues.  If you have questions about the DTSA or other aspects of trade secret or intellectual property protection, we would be glad to hear from you.

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Banking and Finance, Beauty Industry, Contracts, Business and Finance, Fashion, Food, Craft Beer and Nutrition, Intellectual Property, Manufacturing, Sales, Technology, Trade Secret Misappropriation, Unfair Competition

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