August 2022 Many employers elect to pay salespersons commission-based wages. Employers can benefit by this arrangement as the salespeople are paid based on the amount and quality of their work. The salespeople also have the opportunity to earn higher wages for their hard work. Employers, however, need to ensure they are following the correct legal procedures for commission payments. Otherwise, they run the risk of owning considerable wages, fees, and penalties. A. Commissions Defined In 1998, the California Courts handed down the decision of Keyes Motors, Inc. v. DLSE. This case defined commissions as those payments arising from the […]

June 2022 There is often confusion as to when an insurance company must pay for an insured’s choice of counsel. In a number of states, an insurer’s agreement to defend a lawsuit against an insured, while reserving the right to deny liability for the outcome of a lawsuit, can trigger an obligation to provide independent counsel (commonly referred to as “Cumis counsel”). The duty to provide independent counsel is typically due to a conflict of interest, which arises when: (a) the insurer reserves the right to deny liability for the outcome of the lawsuit against its insured, (b) the insurer […]

  June 2022 Under California Labor Code § 226.7, and the Industrial Welfare Commission (“IWC”) wage orders, employers must provide employees with a premium payment of one-hours’ worth of wages for every non-compliant meal and rest breaks.  Non-compliant meal breaks include failing to provide employees with at least 30 minutes, failing to completely relieve employees of job duties during the meal break, and failing to provide employees with the opportunity to take a meal break within the first five-hours of employment.  Non-compliant rest breaks include failing to provide two 10-minute paid breaks during a regular eight-hour workday and failing to […]

May 2022 The opinion in Kim v. TWA Construction, Inc. (2022 Cal. App. LEXIS 412) issued by the Court of Appeal of California Sixth Appellate District, on May 13, 2022, makes it clear that a properly licensed general contractor cannot bring an action for compensation from an owner for work performed by an unlicensed subcontractor. California licensing law has long made explicit that an unlicensed contractor cannot bring or maintain any action to collect or recover compensation for work that contractor performed unless they were duly licensed at all times during the performance of that work. This new ruling extends […]

  California local public agencies and their contractors should take note of a recent appellate decision pertaining to late progress payments on public works projects. In Clark Bros., Inc. v. North Edwards Water Dist., 2022 Cal. App. LEXIS 331, filed on April 22, 2022, the Court of Appeal for the Fourth Appellate District held that a local agency’s late progress payments to a general contractor did not constitute breach of contract under the prompt payment penalty statute, Public Contract Code § 20104.50. Notwithstanding this holding, the contractor recovered damages, interest, fees, and costs in excess of its contract amount. In […]

March 2022 The pandemic certainly did not slow down California’s Legislature and appellate courts. The following five appellate decisions significantly impact businesses that use standard form agreements, employ mechanics lien and related remedies to ensure payment for labor or materials on construction projects, rely on website/online terms and conditions, and agree to resolve debts with written agreements. INCONSPICUOUS ARBITRATION (AND POSSIBLY OTHER CONTRACT) CLAUSES WILL NOT BE ENFORCED The Domestic Linen Supply Co., Inc. v. L J T Flowers, Inc., 58 Cal. App. 5th 180 (2020) case should encourage all distributors and manufacturers that utilize standard form credit, sales, or rental agreements […]

January 2022 Aas v. Superior Court (2000) 24 Cal. 4th 627 – economic loss rule Amelco Electric v. City of Thousand Oaks ( (2002) 27 Cal. 4th 228 – abandonment does not apply to public works – total cost theory is allowed Beacon Residential Community Association v. Skidmore, Owings & Merrill (2014) 59 Cal. 4th 568 – architect liable in absence of privity Cates Const., Inc. v. Talbot Partners (1999) 21 Cal.4th 28 – no tort recovery on bonds – performance bonds can cover contract warranties Condon-Johnson & Associates, Inc. v. Sacramento Municipal Utility Dist., 149 Cal. App. 4th 1384 […]

  November 2021 Employment arbitration agreements continue to be a hot button issue in California. We recently highlighted a ruling by the Ninth Circuit that upheld AB 51, California’s ban on mandatory employment arbitration agreements. While the AB 51 decision was bad news for employers, the newly decided Martinez-Gonzalez v. Elkhorn Packing Co. LLC provides some relief. The representative plaintiff in the Elkhorn Packing case was a former farm laborer who worked for Elkhorn Packing Company (“Elkhorn”), a farm labor contractor. The plaintiff brought a class action claim for wage and hour violations. Elkhorn moved to compel arbitration and the […]

    October 2021   As 2021 winds down, California has yet again passed a host of new employment laws that has been signed by Governor Newsom.  Most of these new laws will take effect on January 1, 2022. The new employment laws cover a wide swath of issues, including medical leave, wage theft, settlement and severance agreements, Cal/OSHA regulations, and, of course, COVID-19.   CHANGES TO THE CALIFORNIA FAMILY RIGHTS ACT (CFRA) Last year, California enacted sweeping changes to the California Family Rights Act (CFRA).  The CFRA is the California equivalent to the federal Family and Medical Leave Act […]

October 2021 In response to what has been described as an extreme shortage of affordable housing in the City of Los Angeles, the City has adopted civil and criminal remedies to curb unlawful harassment against tenants. As explained below, the new statute increases liabilities and risk to residential landlords. On August 6, 2021, the City passed an ordinance adding Article 5.3 to the Los Angeles Municipal Code establishing a Tenant Anti-Harassment Ordinance, and Section 151.33 incorporating the protections in the City’s Rent Stabilization Ordinance. The Tenant Anti-Harassment Ordinance is purported by the City to be in response to a 2018 […]