Author: mskllp

Since 1908, Mitchell Silberberg & Knupp LLP (MSK) has proven its ability to understand the complex, demystify the mysterious, and define the unknown. With more than 130 lawyers and offices in Los Angeles, New York, and Washington D.C., MSK is often distinguished as a “go-to” firm by industry and legal insiders, and has extensive experience in a variety of practice areas, including Entertainment & IP Litigation, Labor & Employment, Motion Picture, Television & Music Transactions, Immigration, Corporate Securities, Regulatory, Tax, Trusts & Estates, Real Estate and International Trade. Relentlessly innovative, our lawyers have developed groundbreaking legislation, established influential precedents, and shaped the legal landscape. For more information, visit www.msk.com.

MORE BAD NEWS FOR CALIFORNIA EMPLOYERS AS GOVERNOR SIGNS BILLS INTO LAW
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Written by Jeremy Mittman

Recently, we informed our readers about a new law making it more difficult to classify independent contractors as such.  Unfortunately, that was just the tip of the iceberg.  A number of additional new employment-related bills recently signed into law by Governor Gavin Newsom will have a negative impact on California employers. Unless specifically noted, these laws go into effect on January 1, 2020.  MSK recommends that any employer with California employees should consult with their employment counsel to address questions regarding changes to current policies/procedures in light of these new laws.  (more…)

California Consumer Privacy Act: Are You Ready? (Part 2)
Data Security system Shield Protection Verification

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By Susan Kohn Ross

In Part 1, we summarized the recent legislative changes regarding the California Consumer Privacy Act (“CCPA”). Bearing in mind the CCPA takes effect on January 1, 2020 and the Attorney General is required to issue regulations by July 1, 2020, these regulations both meet that time frame, but also seek to provide much-needed guidance to industry.

Most of the legislative changes focused on narrowing the definition of personal information, clarified the time frame which applies when a consumer demands information the business possesses about him or her, and also confirmed the CCPA applies to businesses, not non-profits or government entities. In this Alert, we summarize the regulations which were recently issued. However, even in the regulatory context, the starting point remains the same. Companies should begin by asking the following questions: (more…)

California Consumer Privacy Act: Are You Ready? (Part 1)
CCPA California Consumer Privacy Act Lock Orange and Gold

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By Susan Kohn Ross

In the last few weeks we have seen both regulatory and legislative action that has helped to clarify the scope and impact of the California Consumer Privacy Act (“CCPA”). By way of a refresher, the CCPA seeks to protect the personal information of California consumers by giving them greater knowledge about the nature and extent of the data collected about them, how it is used (sold or shared) by those who possess it, and how the individual consumer can control the use of his/her personal data. The CCPA applies to companies, regardless of where they are located, which:

  • Have annual gross revenues in excess of $25 million;
  • Alone or in conjunction with others annually buy, sell, receive or share for commercial purposes, the personal information of 50,000 or more consumers, households, or devices; or
  • Derive 50% or more of their annual revenues from selling consumer personal information.

This framework leaves companies to ask some very basic questions before deciding next steps:

  • What is our annual gross revenue (not limited to California income)?
  • Do we have the personal information of at least 50,000 consumers, households or devices located in California?
  • Do we sell the personal data we have of those California consumers, households or devices? If so, do we derive 50% or more of our annual revenues from those sales?
  • Even if we do not sell that personal data, do we disclose any portion of it to any third parties?

If you answered more than $25 million to the first question or yes to any of the remaining questions, you could be subject to the CCPA, but there is more to the analysis. The next important question is: do you hold personal data belonging to any California consumers, households or devices? If you answered no, you can breathe a sigh of relief. If not, get ready for the year-end push! (more…)

Test the Waters, but Don’t Make Waves

SEC Adopts New Rule Allowing All Issuers to Test the Waters in Registered Offerings

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By Latore Price and Nimish Patel

On September 26, 2019, the SEC announced that all issuers —including non-reporting issuers and investment companies (including registered investment companies and business development companies) will soon be able to “test-the-waters” in initial public offerings and other registered securities offerings. Under the newly adopted Rule 163B, any issuer will be able to engage in “test-the-waters” communications with qualified institutional buyers and institutional accredited investors.

Previously, under the Jumpstart Our Business Startups Act, only emerging growth companies were permitted to engage in “test-the-waters” communications. Rule 163B provides relief from the from restrictions imposed by Section 5 of the Securities Act on written and oral offers prior to, or after filing, a registration statement for issuers who do not qualify as emerging growth companies. This will give all issuers “flexibility in determining whether to proceed with a registered public offering while maintaining appropriate investor protections.”

Once in effect, communications made under Rule 163B will: (more…)

BITE YOUR TONGUE: NLRB RULES THAT PRODUCE COMPANY’S MEDIA, CONFIDENTIALITY POLICIES ARE LAWFUL
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Written by Jonathan Turner

The NLRB under the current administration continues to issue decisions that factor in legitimate business considerations of employers when evaluating rules that are alleged to restrict employee protections under the NLRA.  One such recently issued decision, LA Specialty Produce Company, 368 NLRB No. 93 (October 10, 2019), may have particular significance to many of MSK’s clients because it addresses an important issue on which we frequently have consulted with clients in the past — restrictions on communications responsive to inquiries from the media.

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NLRB ADOPTS EMPLOYER-FRIENDLY STANDARD REGARDING WHAT CONSTITUTES A UNILATERAL CHANGE IN VIOLATION OF THE NLRA
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Written by Jonathan Turner

Spoiler Alert – unless you regularly deal with collective bargaining agreements you may find this a tad wonky.

The National Labor Relations Board (“NLRB” or the “Board”) recently fashioned a new, business-friendly standard for determining when an employer’s action taken in reliance on contractual provisions under a collective bargaining agreement (“CBA”) constitutes a “unilateral change” in violation of the National Labor Relations Act (“NLRA”).  Under the new standard, set forth in M.V. Transportation, Inc., 368 NLRB No. 66, the Board has adopted the “contract coverage” test fashioned and historically applied by the Court of Appeals for the District of Columbia.  In doing so, the Board abandoned the “clear and unmistakable waiver” test traditionally applied by the Board.  Under the new standard, the Board first determines if the contract provision relied on by the employer covers the employer’s action challenged by the union.  If so, the Board will conclude that “the agreement … authorized the employer to make the disputed change unilaterally, and the employer will not have violated [the NLRA].”  If, on the other hand, there are no provisions in the CBA that covers a disputed unilateral change, the Board then will consider whether the union nevertheless waived its right to bargain over the change.  In making this latter determination the Board will continue to apply the “clear and unmistakable waiver… analysis to determine whether some combination of contractual language, bargaining history, and past practice establishes that the union waived its right to bargain regarding a challenged unilateral change.” (more…)

PRINT SHOOT PAY DELAY
Model posing for a photograph during a photo shoot

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Written by Jeremy Mittman and Stephen Rossi

Finally, an employer-friendly law passed in California! Unfortunately, it only affects a small number of employees— but for those employers that are implicated, the law is a welcome reprieve.

 

On September 5, 2019, California Governor Gavin Newsom signed into law Senate Bill 671, the “Photoshoot Pay Easement Act,” which went into effect immediately.  This law specifies that any short-term print shoot employee (from models to crew members) can be paid on the employer’s next regular pay day (including by mail), rather than on the last day they work. (more…)

RAISING THE BAR: DOL UPS SALARY BASIS REQUIREMENT FOR OVERTIME EXEMPTIONS
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Written by Jeremy Mittman 

This week, the U.S. Department of Labor (“DOL”) unveiled the final version of its overtime exemption rule, which sets the annual salary threshold workers need to exceed to qualify for the Fair Labor Standards Act’s (“FLSA”) “white collar” exemptions at $35,568 per year (up from the current annual salary threshold of $23,660).  The DOL estimates that about 1.3 million workers who hadn’t previously been eligible for overtime will now stand to receive it once the rule takes effect on January 1, 2020.

 

The FLSA’s “white collar” exemptions apply to employees employed in bona fide administrative, executive, professional, and computer-related capacities, as well as outside sales employees.  If employees meet the requirements for these exemptions (including, where applicable, the salary basis requirement), employers need not pay them overtime for any time worked over 40 hours per week under federal law.

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HAVE INDEPENDENT CONTRACTORS IN CALIFORNIA? YOU MAY NEED TO RETHINK THAT.
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Written by Jeremy Mittman, Jeffrey Davine, Robert Lowe, Susan Kohn Ross and Samuel Richman 

On September 18, 2019, California Governor Gavin Newsom signed into law A.B. 5, codifying the “ABC test” adopted in the California Supreme Court decision, Dynamex (see, e.g. prior posts here, here, and here) and ensuring that most California workers should appropriately be classified as employees instead of independent contractors.  The bill goes into effect January 1, 2020.

Though supporters state that the bill is aimed primarily at the so-called “gig economy,” in reality A.B. 5 affects virtually every type of business in California.

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CALIFORNIA ARBITRATION ROUNDUP: EMPLOYERS ARE 3-1 FOR FAVORABLE ARBITRATION RULINGS
definition of arbitration

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Written by Jeremy Mittman

California employers received mostly good news this past month on the arbitration front, with a trio of pro-employer arbitration-related rulings.  The California Supreme Court’s recent ruling invalidating an employer’s arbitration agreement (discussed below) is a notable exception.

California Supreme Court Invalidates Employer’s Arbitration Agreement As Unconscionable.

In OTO LLC v. Ken Kho, the California Supreme Court ruled that an Oakland Toyota dealership’s arbitration agreement with a former employee was unenforceable and was so unfair and one-sided that it was procedurally and substantively unconscionable.  “Arbitration is premised on the parties’ mutual consent, not coercion, and the manner of the agreement’s imposition here raises serious concerns on that score,” the majority opinion said. (more…)