California Litigation Newsletter

Labor & Employment

Ninth Circuit: Employers May Not Consider Salary History in Deciding to Pay Men and Woman Differently (GT Alert)
By James N. BoudreauChristiana L. Signs, and Sarah R. Goodman
 
The day before Equal Pay Day, the U.S. Court of Appeals for the Ninth Circuit, sitting en banc, ruled that employers defending claims under the Equal Pay Act cannot rely on workers’ past salaries in any respect in trying to justify pay disparities between women and men. Aileen Rizo v. Jim Yovino, 16-15372, 2018 WL 1702982 (9th Cir. Apr. 9, 2018) (en banc). This ruling expressly overturns the Ninth Circuit’s prior holding in Kouba v. Allstate Insurance Co., 691 F.2d 873 (9th Cir. 1982), conflicts with rulings from other circuits, and tees up a very important issue for potential Supreme Court review.
 
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California Supreme Court Creates New Worker Classification Test (GT Alert)
By Lindsay E. Hutner and Brenda L. Rosales
 
On Monday, April 30, 2018, the California Supreme Court issued its long-awaited ruling in Dynamex Operations West v. Superior Court. The ruling adopts a new worker classification test and makes it easier for independent contractors to be found to be employees under California Industrial Welfare Commission (IWC) wage orders, which impose obligations relating to minimum wages, maximum hours, overtime, and a number of very basic working conditions, such as required meal and rest breaks. Whether it will impact compliance issues beyond the Wage Orders remains to be seen.  This decision will impact employers who rely on independent contractors to conduct their business. 
 
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U.S. Supreme Court to Reconsider Whether Employees May Be Forced to Pay Fair Share Fees to Unions (The Recorder)
By Charles S. Birenbaum, Jamie R. Rich and Brenda L. Rosales
 
Public sector employees may no longer have to make financial contributions to their unions. This term, the issue before the U.S. Supreme Court in Janus v. AFSCME is whether public-sector “agency shop” arrangements should be invalidated under the First Amendment. Agency shop arrangements require employees who are not members of a union to pay “agency fees” or “fair share fees,” which are a proportionate share of the costs of union representation. Fair share fees may not to be used by unions to further political purposes. Forty years ago, the Abood Court held that agency shop clauses were valid insofar as the service charge is used to finance the union’s expenditures for collective bargaining, contract administration, and grievance adjustment.
 
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SCOTUS Rules Dodd-Frank Does Not Protect Internal Whistleblowing (GT Alert)
By Terence P. McCourt, Todd D. Wozniak, and Jack S. Gearan
 
On Feb. 21, 2018, the U.S. Supreme Court held that the anti-retaliation provision of the Dodd-Frank Act (DFA) protects only employees who complain to the Securities and Exchange Commission (SEC) and not those who make only internal complaints. In a unanimous decision, the justices ruled in favor of Digital Realty Trust (Digital Realty), finding that employees who bring securities law complaints against their employers must first take their allegations to the SEC to be protected by the DFA anti-retaliation provisions.
 
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Multi-Country InfoPAK Survey on Covenants Not to Compete  (Association of Corporate Counsel)
 
Kurt A. Kappes, Jordan W. Cowman, and International GT team members recently published a Multi-Country Survey InfoPAK with the Association of Corporate Counsel on Covenants Not to Compete. The survey is a resource for in-house counsel considering utilizing covenants not to compete to protect their company’s proprietary information, including trade secrets, intellectual property, and other confidential information. 
 
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Joint-employer Standard Left Unsettled after NLRB Vacates Ruling (Daily Journal – Subscription only)
By Charles S. Birenbaum, Jamie R. Rich, Lindsay E. Hutner, and Brenda L. Rosales
 
Charles S. Birenbaum, Jamie R. Rich, Lindsay E. Hutner, and Brenda L. Rosales authored a Daily Journal article titled “Joint-employer Standard Left Unsettled after NLRB Vacates Ruling.” The article discussed a recent order by the National Labor Relations Board vacating its decision in Hy-Brand Industrial Contractors, Ltd. and Brandt Construction Co. 

For more on the subject, see the recent GT Alert by Katie Molloy, David W. Oppenheim, and Tristan J. Reiniers titled “NLRB Returns to Browning-Ferris Test for Joint Employment.”
 
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Employee Status in the Age of the Gig Economy (Daily Journal – Subscription only)
By James M. Nelson
 
James M. Nelson authored a Daily Journal article titled “Employee Status in the Age of the Gig Economy.” The article examined the effort to reconcile traditional notions of employee versus independent contractor status in California with what is now popularly known as the “gig economy.”

For more on Greenberg Traurig’s Benefits & Compensation Practice, including recent articles and alerts, please visit our website.

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Tax

California Documentary Transfer Tax Litigation Update (GT Alert)
By Bradley R. MarshCris K. O'NeallC. Stephen Davis, and Marvin A. Kirsner
 
California’s Documentary Transfer Tax Act (Rev. & Tax. Code §§ 11901, et seq.) is based upon the former federal Documentary Stamp Tax Act first enacted by Congress to raise revenues for the Spanish-American War.  The federal law was repealed, effective Jan. 1, 1968, and simultaneously California, like many other states, picked up the tax with conforming legislation authorizing counties and cities to adopt their own documentary stamp tax on transferring of interests in real property.  This means that in California, in most situations, there are three levels of code related to any imposition of tax:  state, county, and city.
 
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White Collar Defense & Special Investigations

New Tax Law Fundamentally Changes Tax Deductions for White Collar Clients (Women’s White Collar Defense Association)
By Carolyn F. McNiven and Marvin A. Kirsner
 
Companies doing business in California should be aware of a provision in the recent Tax Cuts and Jobs Act (TCJA) that requires government agencies to report to the IRS civil settlements and criminal judgments and alters what types of costs commonly associated with a white collar matter or other government enforcement matter are deductible. In a nutshell, TCJA will make it more expensive on an after-tax basis for corporate clients to investigate and then settle enforcement actions brought by government agencies, including white collar criminal matters. It also creates a duty on government agencies to report to the IRS and the taxpayer the amount of the settlement or order and separately identify the portions of that total amount that are attributable to restitution or remediation of property, or correction of non-compliance.
 
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Intellectual Property & Technology

Data Breach Standing Ruling Invites Review (Daily Journal – Subscription only)
By Ian C. Ballon
 
Ian C. Ballon authored an article in the Daily Journal titled “Data Breach Standing Ruling Invites Review.” The article discusses a circuit split on Article III standing in cases where a plaintiff alleges that personal information was exposed in a data breach, but does not allege that the data was used for improper purposes.
 
Drafting Patent Settlements and Licenses: 5 Rules  (Daily Journal – Subscription only)
By Nicholas A. Brown
 
Nicholas A. Brown authored an article in the Daily Journal’s Top Intellectual Property Lawyers special report, outlining five default rules worth remembering in drafting patent settlements and licenses, including: 1) “a patent license cannot be transferred by the licensee”; 2) “a patent license binds subsequent owners of the licensed patent”; 3) “a patent license includes all acts that would otherwise be infringements, including making, using, offering for sale, selling, or importing”; 4) “a patent license includes at least continuations and reissues of a the licensed patent”; and 5) “a patent license includes ‘have made’ rights.”
 
For more on Greenberg Traurig’s Global Intellectual Property & Technology Practice, including recent articles and alerts, please visit our website.

Health Care & FDA Practice

Ruling in Proposition 65 coffee case not entirely unpredictable (Daily Journal)
By Anthony J. Cortez and Will Wagner
 
A Los Angeles judge has ground the coffee industry to a halt by ruling that both ready-to-drink and bagged coffee sold in California must be accompanied by a cancer warning. The lawsuits alleged that Starbucks plus 90 other entities were violating the Safe Drinking Water and Toxic Enforcement Act of 1986 – aka Proposition 65. The ruling was based on the presence of acrylamide in coffee products, a chemical present in many foods and beverages consumed on a daily basis and could have wide-ranging implications for not only the coffee industry but for many other industries currently involved in acrylamide-related litigation.
 
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FCA Traps, Zaps and Zingers (Daily Journal – Subscription only)
By Carolyn F. McNiven
 
Defense attorneys are applauding a Florida district judge’s recent decision to throw out a $350 million judgment in a Florida False Claims Act case, wrote Greenberg Traurig’s Carolyn McNiven in the Daily Journal.

For more on the subject, see Francis J. Serbaroli’s recent alert, “Justice Department Outlines Factors that May Lead to Dismissal of More False Claims Act Cases.”
 
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Awards and Mentions

Magan Pritam Ray was recently selected for the San Francisco Business Times’ “Most Influential Women in Business” list, as well as the Silicon Valley Business Journal’s “Women of Influence” list.
 
Ian C. Ballon and Susan L. Heller were named among the “Top Intellectual Property Lawyers in California” for 2018 by Daily Journal

Susan L. Heller was also selected as one of the 2018 “Top Women Lawyers” by the Daily Journal.  
 
Daniel J. Tyukody was quoted in the Daily Journal article, “Merger-objection suits drove securities class actions to new highs.”
 
The Sacramento office’s addition of environmental litigator Tim Swickard—the former director of California’s Department of Toxic Substances Control—was featured in the Daily Journal, Law360, and The Recorder.
 
Natassia Kwan was recently appointed to the California Minority Counsel Program (CMCP) Ambassadors Council.
 
Ian C. Ballon was profiled in a Los Angeles and San Francisco Daily Journal supplement of “Top Cyber/Artificial Intelligence Lawyers 2018.”

Featured Event

2018 Trends & Important Legal Developments in Cybersecurity, Data Privacy & TCPA Class Action Litigation
 
Greenberg Traurig’s Ian C. Ballon and Lori Chang will discuss defense strategies for cybersecurity, data privacy, and TCPA class action suits. Part of a series of class action seminars throughout 2018, this program will address class action updates in the following areas:

  • New trends in enforcement of Terms of Use, Privacy Policies and Arbitration provisions in mobile and online contracts
  • Latest trends, lessons and practice tips gleaned from data privacy, cybersecurity, VPPA and TCPA class action suits
  • New fast track rules for TCPA texting cases and their impact on in-house marketing programs
  • Settlement trends in data privacy, security breach and TCPA cases
  • Class certification

Thursday, June 7
12:30 p.m. - Lunch and Check-In
1:00 p.m. Program

Greenberg Traurig, LLP
1840 Century Park East, Suite 1900
Los Angeles, CA 90067

RSVP