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AdobeStock_314925095-300x200The Supreme Court of California recently issued an opinion with significant consequences for any business that enters into contracts. This opinion addresses liability for interfering with an at-will contract, as well as the limits of the few exceptions to the statutory ban on non-compete agreements in our state. It is essential for business owners to understand the implications of this ruling in order to enter into enforceable contracts that will not leave them liable for damages, court costs, and other costly expenses.

The Latest Supreme Court Ruling

On August 3, 2020, the Supreme Court of California issued an opinion that answered critical questions about how California law on tortious interference with business relations applies to an at-will contract. The Court ruled that companies are not liable for encouraging others to end an at-will contract unless there is “independent wrongfulness.” This analysis relied heavily on the uncertain nature of an at-will contract. While parties to a binding contract are negotiating for certainty in their future business relationship, there is no such certainty in an at-will contract. For this reason, legitimate business competition takes precedence over the terminable relationship in such a contract.

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covid-court-300x200In the wake of the COVID-19 pandemic, the State and Federal Court in California have become severely backlogged. For months, the courts were closed entirely, hearing only the most urgent cases (such as domestic violence, restraining orders and other protective order type cases). The courts have slowly expanded operations and started hearing other non-urgent matters by video conference. Unfortunately, jury tirals are still on hold and these limited operations have not begun to make a significant dent in the major backlog of cases to be heard. There is a reported backlog of over a thousand criminal trials in California courts. Criminal defendants have the right to a speedy trial, so these cases must generally be given priority over civil matters.

California Statutes That Create Civil Trial Preferences

Without any relief, the current backlog means that it could be months or even years before a civil case is scheduled for trial on a normal court docket. That being said, the California Code of Civil Procedure does create specific categories that allow a civil case to be given preference in trial scheduling. An experienced civil litigator can explain which, if any, of the following circumstances apply to an individual’s case:

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AdobeStock_359775405-300x200Tenants across America have faced unprecedented challenges during the COVID-19 pandemic. Most of the eviction moratoriums have focused on residential leases, in order to keep Californians home and healthy during these dangerous times. Small business owners have also been granted some eviction protections. Regardless of your business size, you might be surprised to learn just how much leverage you have in your commercial lease. Below are three critical strategies that can help your business try to remain financially healthy during and in the wake of the coronavirus.

Renew Your Current Lease

Businesses that are on relatively strong financial footing, and whose leases are expiring in the next six to eighteen months, may find themselves with greater leverage to negotiate renewal terms. Landlords are hesitant to lease to new tenants (who they may not be able to evict). With the U.S. economy is in downturn and the economic future uncertain, landlords are also worried about their future rental prospects. In such conditions, commercial tenants who have remained in good financial health and standing with their current landlord will be well-positioned to negotiate lease renewals with favorable terms.

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The coronavirus pandemic has drastically affected the American workplace. Throughout the country, employees are working from home, and companies are radically changing the way they get business done. Many of these creative solutions are changing California businesses for the better. Existing employment laws still apply to the new workplace. As an employer, you need to be aware of certain issues that could expose you to liability.

Scheduling Changes

Many companies have been forced to lay off workers or reduce hours to stay in business. Before you make any decisions about firing or layoffs, you should be aware of the potential legal consequences of doing so. Employees who have a written employment contract or are part of a union may have protections against these actions, even in the unprecedented circumstances of a global pandemic. Even changing shifts or job responsibilities could trigger the provisions of such a contract. Consult with an employment lawyer before implementing changes that could expose your business to liability.

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AdobeStock_336124038-300x200The coronavirus pandemic has caused drastic changes in almost every facet of life in California. For instance, federal, state, and local courts are all facing a major backlog. Many courts were shut down entirely for months, open to only the most urgent cases (such as restraining orders). Now courts have reopened, but many are operating at reduced capacity, meaning they have been making slow progress through the serious backlog of cases. Litigants should be aware of how this backlog will affect their legal claims.

The Incentive to Settle

Parties have the option of settling their claims out of court before trial. Whether they choose to do so depends on a wide range of factors, including:

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AdobeStock_359915477-300x200Existing employee safety laws can be applied to workers who are exposed to the coronavirus. While it is not yet clear exactly how insurance companies and courts will treat these claims, what is clear is that employers must take precautions to mitigate their liability for COVID-19 exposure in the workplace.

How to Minimize Your Liability for Exposure

In almost every type of civil case, the defendant’s conduct is measured against a standard of reasonable behavior. There are a few instances of strict liability, in which the defendant is liable no matter how reasonable their behavior, but these are limited to inherently dangerous scenarios that are clearly defined under existing torts law.

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AdobeStock_83043455-300x200It is never easy to break into the competitive world of technology. Now, in the midst of a once-in-a-lifetime global pandemic, new businesses face more challenges than ever. The good news is that there are still funding programs available to small business owners and startup companies in California.

What is CalCAP?

The California Capital Access Program (CalCAP) is a program designed to offer financial assistance to small business owners in California. CalCAP assists banks and other financial institutions in making loans and funding more available to small businesses. CalCAP is a reserve that acts to underwrite losses that financial institutions sustain on small business loans. This allows them to make more loans available to small business owners.  Loans are available for startup capital, expansion funds, and even for working capital to keep your business afloat during production shutdowns and loss of business due to COVID-19.

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Flatten-Curve-COVID-300x115Is your business in compliance? The guidelines for operating your business while preventing the spread of COVID-19 are constantly changing. As your trusted business advisors, we would like to keep you updated with the most relevant information. It is imperative that you update your business’s Social Distancing Protocol to stay in compliance or your business could be fined by the County or forced to close.

Per the July 13th Statewide Public Health Officer Order, all bars, pubs, breweries and brewhouses whether indoors or outdoors must close. Indoor operations for the following businesses have also been restricted:

  • Dine-in restaurants must close indoor seating, but may continue operating outdoor dining, takeout and delivery.
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AdobeStock_263358883-300x200Mergers and acquisitions are an important tool for expanding your business in the competitive field of technology. Unfortunately, hidden debts and liabilities can impose serious financial burdens on an unassuming buyer. Some buyers try to avoid this situation by purchasing assets rather than an entire company. This approach can still leave a buyer assuming debts that are secured by the assets being purchased.  When structuring a transaction as an asset purchase instead of a stock purchase, it is important to understand what debts or other liabilities exist that can become obligations of the asset buyer.

The Benefits of Structuring a Deal as an Asset Purchase Agreement

When one company acquires or merges with another company, the buyer is not only receiving the assets of the target company but also its debts and liabilities if they are not discharged prior to the sale.  The assumed debts and liabilities can even include ones that are unknown to the buyer.  If a buyer does not conduct proper due diligence prior to an acquisition, a buyer may assume liabilities that it is not aware of and courts can deem the buyer to have had “constructive knowledge” of those debts and liabilities.   Constructive knowledge is when one is presumed by law to have knowledge of a fact, regardless of whether or not one has actual knowledge of the fact, since that knowledge can be obtained by the exercise of reasonable care.

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AdobeStock_279822215-300x200You might be surprised to learn that an ownership interest in an LLC can be governed by securities law. There are certain circumstances in which an ownership interest is a security subject to federal and state securities laws. Even if an exception applies, you still might be required to file an exemption notice with the government. Be sure to consult with a Silicon Valley business lawyer about which securities regulations apply before buying or selling any ownership interest in an LLC.

What is a Security?

A security is a negotiable financial interest with monetary value. Equity securities represent an ownership interest in a business entity (whether it is a corporation, partnership, trust, or LLC). Debt securities are financial instruments that represent money owed, along with repayment terms such as interest and due dates. A debt security can be either secured by collateral or unsecured. If it is secured, it may be subject to various securities regulations.

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