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Posts Tagged ‘new law’

As of 1/1/19 California Lawyers & Clients Going To Mediation Have To Sign This

Posted on: December 19th, 2018

By: Greg Fayard

Come January 1, 2019, California lawyers who participate in mediations will need to provide written disclosures to their clients explaining mediation confidentiality. Further, California lawyers must get written acknowledgment from clients that they understand mediation confidentiality before participating in mediation. This requirement does not apply to class actions, however. The new law is a new statute in the Evidence Code pertaining to mediations–Section 1129.

The following disclosure satisfies the new law, so long as it is in 12-point font, in the preferred language of the client, and on a stand-alone, single page. Both the attorney and client have to sign and date the disclosure.

Mediation Disclosure Notification & Acknowledgment

To promote communication in mediation, California law generally makes mediation a confidential process. California’s mediation confidentiality laws are laid out in Sections 703.5 and 1115 to 1129, inclusive, of the Evidence Code. Those laws establish the confidentiality of mediation and limit the disclosure, admissibility, and a court’s consideration of communications, writings, and conduct in connection with a mediation. In general, those laws mean the following:

  • All communications, negotiations, or settlement offers in the course of a mediation must remain confidential.
  • Statements made and writings prepared in connection with a mediation are not admissible or subject to discovery or compelled disclosure in noncriminal proceedings.
  • A mediator’s report, opinion, recommendation, or finding about what occurred in a mediation may not be submitted to or considered by a court or another adjudicative body.
  • A mediator cannot testify in any subsequent civil proceeding about any communication or conduct occurring at, or in connection with, a mediation.

This means that all communications between you and your attorney made in preparation for a mediation, or during a mediation, are confidential and cannot be disclosed or used (except in extremely limited circumstances), even if you later decide to sue your attorney for malpractice because of something that happens during the mediation.

 

I, _____________ [Name of Client], understand that, unless all participants agree otherwise, no oral or written communication made during a mediation, or in preparation for a mediation, including communications between me and my attorney, can be used as evidence in any subsequent noncriminal legal action including an action against my attorney for malpractice or an ethical violation.

NOTE: This disclosure and signed acknowledgment does not limit your attorney’s potential liability to you for professional malpractice, or prevent you from (1) reporting any professional misconduct by your attorney to the State Bar of California or (2) cooperating with any disciplinary investigation or criminal prosecution of your attorney.

(Signature)

[Name of Client] [Date signed]

(Signature)

[Name of Attorney] [Date signed]”

 

This disclosure must be provided to clients and signed as soon as reasonably possible before the client agrees to mediate. However, not obtaining a proper signed acknowledgment from a client is not a basis to set aside an agreement prepared for, in the course of, or pursuant to mediation. (Evid. Code, § 1129, subd. (e)). Attorneys can be disciplined for not complying with the new law, however. (Evid. Code, § 1122,, subd. (a)(3)).

What prompted this new law? First, it addresses the lack of client awareness of confidentiality at mediation. Second, attorneys were able to avoid mediation professional liability claims through the cloak of confidentiality. To address attorneys escaping mediation liability claims, a communication, document or writing related to the attorney’s compliance with the new law is admissible in an attorney disciplinary proceeding (unless the document discloses something said or done during mediation).

In sum: If a California lawyer plans to mediate, he or she should prepare the above disclosure and calendar the client’s prompt signature before the mediation.

If you have any questions or would like more information, please contact Greg Fayard at [email protected].

Women On Board

Posted on: October 16th, 2018

By: Rebecca Smith

Nearly one-quarter of California-headquartered publicly held domestic or foreign corporations have no female directors.  No later than the close of the 2019 calendar year, those companies will need to add at least one.  Senate Bill 826 (SB 826) signed by Governor Brown on September 30, 2018 has mandated this change.  And, if the board of directors of a corporation is larger than four board members, the required number of women on the board increases.  If the number of directors is six or more, the corporation must have a minimum of three directors, if the number of directors is five, the corporation shall have a minimum of two directors.  Corporations will be allowed until the close of the 2021 calendar year to add the additional female directors beyond one.

There is a strong likelihood that this new law will be challenged in the courts.  The first argument being made is that the law will displace an existing member of the board of directors solely on the basis of gender.  The new law has attempted to address this by indicating:  “A corporation may increase the number of directors on its board to comply with this section.”  The argument being made is that the law focuses too narrowly on gender instead of other aspects of diversity, including race and sexual orientation.  The government may have to prove not only that there is disparity in board representation among men and women, but also that such a divide is a sufficient reason to create a special law for women.

The other issue in the forefront is to which companies the law will apply.  While the statute provides that the companies will be determined by the location of the principal executive offices according to the corporation’s SEC 10-K form, challenges are being made that the law should not apply to businesses headquartered in California, but incorporated elsewhere.  The new Section 2115.5 of the Corporations Code has attempted to address this issue by indicating that the new requirements shall apply to a foreign corporation that is a publicly held corporation to the exclusion of the law of the jurisdiction in which the foreign corporation is incorporated.  That being said, the “internal affairs doctrine” may provide a basis for the challenge.  The internal affairs doctrine, a choice of law rule in corporation law, provides that the internal affairs of a corporation will be governed by the corporate statutes and case law of the state in which the corporation is incorporated.

So what happens if a company does not comply:  A fine of $100,000 for a first violation, and a fine of $300,000 for a second or subsequent violation.  For purposes of imposing the fine, each director seat required by the section to be held by a female, which is not held by a female during at least a portion of the calendar year is considered a violation.  For the time being, California companies with their principal executive offices in California should start to think about how to comply with the law by the end of 2019 and stay tuned for any changes.

If you have any questions or would like more information, please contact Rebecca Smith at [email protected].

California Attacks Arbitration Agreements …. Yet Again!

Posted on: August 24th, 2018

By: Dave Daniels

On August 22, 2018, the California Senate voted to approve AB 3080, a bill prompted by the #MeToo movement against sexual harassment. Nominally, the bill is intended to combat the use of mandatory arbitration agreements and confidentiality clauses to prevent the public disclosure of workplace sexual harassment, a practice vigorously opposed by the #MeToo movement. As written, however, AB 3080 goes much further, imposing a ban on mandatory arbitration agreements for all claims of employment discrimination, retaliation, and harassment, as well as wage and hour claims.

The bill is currently on Governor Jerry Brown’s desk, awaiting his signature or veto. If signed, the new law would apply to any employment contracts “entered into, modified, or extended” on or after January 1, 2019, and would make several sweeping changes to the California employment law landscape:

Ban on Mandatory Arbitration Agreements

Arbitration agreements are ubiquitous in employment contracts and provide for a low-cost, efficient means of resolving employment disputes.

AB 3080 would put a stop to this by adding Section 432.6 to the Labor Code, which would prohibit any person from requiring an applicant or employee, “as a condition of employment, continued employment, the receipt of any employment-related benefit, or as a condition of entering into a contractual agreement,” “to waive any right, forum, or procedure” for claimed violations of the California Fair Employment and Housing Act (“FEHA”) or the California Labor Code.

In other words, if AB 3080 is signed, it will be unlawful—indeed a misdemeanor—for an employer to require its employees to enter into mandatory arbitration agreements for any claims covered by FEHA (i.e., discrimination, retaliation, harassment) or the Labor Code (i.e., wage and hour claims).

While the bill only applies to mandatory arbitration agreements, Section 432.6(c) makes clear that employers will not be able to sidestep the new prohibitions by using opt-out clauses or otherwise requiring an employee to “take any affirmative action to preserve their rights.”  Moreover, Section 432.6(b) prohibits employers from threatening, terminating, retaliating against, or discriminating against any employee or applicant who refuses to voluntarily sign an arbitration agreement.

Finally, because these new provisions appear in the Labor Code, violations could subject employers to civil penalties under the California Labor Code Private Attorneys General Act, also known as PAGA.

Elimination of Settlement Agreements

Because AB 3080 prohibits any person from requiring an applicant or employee “to waive any right, forum or procedure” “as a condition of entering into a contractual agreement,” it arguably also eliminates or curtails employers’ ability to enter into settlement and general release agreements with their employees for FEHA and Labor Code claims.  Given that the vast majority of these types of claims are settled, the full extent of AB 3080’s impact remains uncertain.

Ban on Confidentiality Agreements for Sexual Harassment

AB 3080 would also add Section 432.4 to the Labor Code, which would bar any person from prohibiting an applicant, employee, or independent contractor, “as a condition of employment, continued employment, the receipt of any employment-related benefit, or as a condition of entering into a contractual agreement,” from “disclosing to any person an instance of sexual harassment that the employee or independent contractor suffers, witnesses, or discovers in the workplace or in the performance of the contract.”

In short, employers will no longer be able to impose confidentiality obligations on their employees or independent contractors with respect to claims of sexual harassment.

Individual Liability

Importantly, AB 3080 applies to any “person” who commits any of the above-noted violations, not just an employer.  An earlier version of the bill was restricted to “an employer,” but was subsequently amended to replace “an employer” with “a person,” signaling the Legislature’s intent to impose individual liability for violations.

What Employers Should Know Now

For the moment, as it awaits Governor Brown’s signature, AB 3080 is still not the law.  In 2015, Governor Brown vetoed a similar bill, AB 465, which would have outlawed the use of mandatory arbitration agreements as a condition of employment.  In his veto message, Governor Brown noted that there is significant debate about whether arbitration is less fair to employees, and explained that he was “not prepared to take the far-reaching step proposed by this bill.”  Remember, however, that Governor Brown’s term ends in January 2019, and a re-introduced version of the bill could find a more sympathetic audience in his successor.

Even if Governor Brown signs the bill, there will be immediate legal challenges arguing that the bill is unenforceable under the Federal Arbitration Act, which the United States Supreme Court has steadfastly enforced, most recently in Epic Systems Corp. v. Lewis. AB 3080 is just the latest in a long history of California’s antagonism towards arbitration agreements, both in the employment context and beyond.

Notwithstanding the hurdles that AB 3080 faces, employers should now begin reviewing their arbitration agreements and practices in light of these potential changes.  In particular, employers will want to think about best approaches to take during the period after the bill is signed and legal challenges work their way through the courts.

If you have any questions regarding the state of arbitration agreements in the Golden State, please feel free to contact Dave Daniels in our Sacramento office at 916-472-3301 or [email protected].

Georgians: Hang Up and Drive

Posted on: May 9th, 2018

By: Wesley C.  Jackson

Beginning July 1, 2018, it will be illegal for Georgians to hold their phones while driving. The new law was signed by Governor Nathan Deal on Wednesday May 2, 2018.

How might this new law effect auto-accident litigation in Georgia? A motorist injured by a distracted driver must establish that the distracted driver acted negligently. Formerly, the injured motorist would have to convince a jury that the distracted driver’s conduct breached his duty to exercise ordinary care. But now, if a distracted driver violates the new hands-free law, he will be presumed to have breached this duty as a matter of law due to the doctrine of “negligence per se.”

When a defendant violates a statute and injures someone the statute was designed to protect, the doctrine of negligence per se shifts the burden of proof at trial from the plaintiff to the defendant. The plaintiff no longer needs to prove that the defendant acted negligently; instead, the defendant is presumed to have acted negligently unless he can show that he unintentionally violated the statute and otherwise exercised ordinary care.

So, if a driver causes an accident while on his phone and is convicted of violating the new hands-free statute, a plaintiff could argue that the defendant was presumptively negligent because the defendant violated a statute that was intended to protect other motorists from auto accidents caused by distracted drivers. The injured driver would still have to prove that the distracted driver’s negligence caused her injuries, but the bar for recovery will be lower if the distracted driver violated the new law.

Hopefully, Georgia’s new law will encourage drivers to keep their hands on the wheel and their eyes on the road. But when accidents (and lawsuits) occur, injured plaintiffs may have a new offensive strategy with the negligence per se doctrine.

If you have any questions or would like more information, please contact Wes Jackson at [email protected]. If you send Mr. Jackson an email, please do not do so while driving.

California’s Protecting Immigrant Worker Protection Act (AB-450)

Posted on: January 11th, 2018

By: Layli Eskandari Deal

On October 5, 2017 Governor Brown signed AB-450 into law further taking California into the federal immigration landscape.  The new State law took effect on January 1, 2018.

Here are some key elements:

  1. Employers no longer can voluntarily grant access to nonpublic areas of the company to any immigration enforcement agent.  Access can only be granted when presented with a judicial warrant.
  2. The new law does not restrict Department of Homeland Security from providing a Notice of Inspection (NOI) to an employer demanding the employer’s I-9 forms within 3 days of service.  The employer must honor the NOI.
  3. If a NOI is received, the employer must post a notice at the worksite, in the language the employer normally uses to communicate information with employees, within 72 hours of receipt.  The notice must communicate the following:
    1. [Name of Issuing authority] has issued a Notice of Inspection and will be conducting an inspection of Employee Form I-9s or other employment records;
    2. Date of receipt of NOI
    3. The “nature of the inspection” – to the extent known by the employer.
  4. Give notice to the “employee’s authorized representative” (any collective bargaining representative), if any, within 72 hours of the receipt of the NOI.
  5. Provide a copy of the NOI to any “affected employee” upon reasonable request.
  6. Notify “affected employees” within 72 hours of the agency’s inspection results as well as written notice of the obligations of the employer and employee arising from the inspection.
  7. Employers are prohibited from reverifying the employment eligibility of any current employee at a time or manner not required by law or that would violate employer’s E-Verify Memorandum of Understanding.
  8. Penalties: First offense – $2,000 -$5,000 / each subsequent offense – $5,000-$10,000.

We expect that the Department of Homeland Security will conduct more inspections this year.  It would be beneficial for California employers to have policies in place to handle these situations if they should arise.

For additional information related to this topic and for advice regarding how to navigate U.S. immigration laws you may contact Layli Eskandari Deal of the law firm of Freeman Mathis & Gary, LLP at (770-551-2700) or [email protected].