As we covered in Mandatory Paid Sick Leave for California Employees, all companies with employees working in California are subject to this state’s paid sick leave law (Assembly Bill [AB] 1522), effective July 1, 2015. AB 1522 requires each employer, regardless of size (and except for those with collective bargaining agreements and other very limited exemptions), to provide paid sick leave benefits to any temporary, part-time and full-time employee once he or she has worked for that company in California for a certain period of time.

As an indicator of the confusions created by ambiguous language in this law, the state’s Division of Labor Standards Enforcement (DLSE) website now includes a second, expanded version of her agency’s frequently-asked questions (“FAQs”) (and answers) on employer AB 1522 obligations. That website also now includes a new “facts and resources” AB 1522 power point presentation.

1. UPDATED FAQS:

The updated FAQs, posted February 2015, seek to further clarify employers’ notice requirements, to explain how seasonal workers accrue paid sick leave benefits, and to specify how to provide benefits for part-time employees as well as those on alternative work schedules:

• Wage Theft Prevention Act Notice (“Notice Form”): In addition to providing this notice form to new hires, employers must also now provide it to each hourly employee hired prior to January 1, 2015 and within seven days of implementation of or changes to the company’s paid sick leave policy. In the newly revised FAQs, the DLSE directs that an employer need not issue this separate notice if that company conveys the required information by an authorized “alternative method,” e.g. a pay stub or itemized wage statement.
• Seasonal Employees: Under AB 1522, employees who work in California for at least 30 days within a year are eligible to earn/receive paid sick leave. However, newly hired employees cannot start taking paid sick leave until the 90^th day of their employment. This means that a seasonal worker who works 30 days or more but less than 90 in a year will be eligible for sick pay but ineligible to actually use it. The new revised FAQs specify a situation where such workers can use the benefit. If a seasonal employee leaves and returns to the same employer within one year, the 30 and 90 day counts will pick up where that worker left off for AB 1522 eligibility purposes. Thus, if a seasonal employee worked 60 days and then came back within a year, the re-hire date is equivalent to “day 61” of employment.
• However, if a seasonal worker worked 60 days and doesn’t come back within a year, the DLSE gives no guidance, stating this is a question “not addressed in the new law and will depend on the particular facts of the situation to answer.”
• Part-Time Employees: 1522 allows an employer to limit the amount of paid sick leave taken to 24 hours or three days. This leaves an ambiguity for part time workers. Is a part time employee who only works six hours daily eligible for only 18 hours (3 days x 6 hours/day = 18) or 24? The DLSE’s expanded FAQs direct that “24 hours or three days” should be read in the manner that benefits the employee more. Thus, except for workers on an properly constructed alternative workweek schedule (see below), no employee – regardless of a shortened scheduled – may receive any less that 24 hours of sick leave benefit.
• Alternative Workweek Schedules of Four 10-Hour Days: According to the updated FAQs, employees who work an authorized alternative workweek schedule of four 10-hour days are eligible for a minimum of three days or 30 hours of paid sick leave (the equivalent of three ten-hour days). Again, the Labor Commissioner interprets “24 hours or three days” as whichever benefits the employee more.

1. FACTS AND RESOURCES POWER POINT:

The DLSE’s new 21-page “facts and resources” power point presentation covers key 2015 implementation dates, facts on AB 1522, six steps to successful compliance, paid time off policies, exemptions, separation from employment, protection from retaliation, administrative penalties, and various hypothetical scenarios.

Perhaps the most interesting aspect of these new DLSE postings is that the agency issues no assurance that these publications will be the last it will issue before (or after) the July 1, 2015 effective date for AB 1522. Stay tuned.

For additional assistance understanding and implementing California’s paid sick leave benefits law, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

In our blog, “What is Intellectual Property?”, we identified several kinds of intellectual property, i.e., products created through one’s creativity and intellect, that others may not use without permission. One of those is trade secrets. The most famous example is the Coca-Cola formula, maintained as a trade secret since its creation.

Each state, including California, enacts its own trade secret laws. California Civil Code sections 3426 – 3426.11 define a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, or process” which meets two criteria. First it must have “independent economic value” whether “actual or potential,” based on the fact that it is not “generally known to the public” or to people who would be able to make money or gain other economic value from using or disclosing the information. Second, its owner must take reasonable efforts to keep it secret from unauthorized persons.

If you have an invention, source code, a chemical formula that you are developing to create some product, an idea or prototype for some device, or anything with current or potential economic value, you can claim trade secret protection. An advantage over patents is that trade secrets are not filed with the government and thus not made public.

However, to claim trade secret protection, it is crucial that you comply with the second requirement by taking reasonable measures to safeguard the secrecy of the information that fit the situation. For example, you developed source code for a new computer app, but need funding to market it. If you give a potential funding source your source code to review without any confidentiality measures, you are not making reasonable efforts to keep the source code secret. On the other hand, if you have an attorney create a strong non-disclosure agreement (NDA) and require the potential funding source and its staff to sign that document in advance of disclosure, this could well be deemed a reasonable effort. In 2012, a small company, TechForward, won a $27 million verdict against Best Buy for misappropriating its trade secrets because it had done that.

If you left the papers containing such source code lying around the office conference room where unauthorized persons might be able to pick it up, you would not be taking reasonable efforts to keep it secret. Such material should be stored securely with access permitted only by people with a need to know and obligated to non-disclosure by an adequate, signed NDA. Your measures might also include non-disclosure of access passwords or encryption codes by otherwise authorized persons as well as other special technological procedures, such as required deletion or erasure by any employee who inadvertently receives trade secret data he or she is not permitted to hold.

What measures will be deemed reasonable under the trade secret law depends on various factors, such as the value of the trade secret, the size and income of your company, and the likelihood of industrial espionage in your industry aimed at the particular type of property. For the Coca-Cola Company, this meant specially constructing a large vault to protect its trade secret.

A downside to relying on trade secret protection is that if it does get out in spite of your efforts and becomes generally known to the public or to those who can profit from using it, that protection likely will be lost. A decision to treat information as a trade secret – as well as just what confidentiality measures are necessary to protect it – should be made deliberately with skilled attorney assistance.

For any questions concerning trade secrets, please contact attorney Helena Kobrin.

Helena Kobrin
February 18, 2015

In our blog, “What is Intellectual Property?”, we identified several kinds of intellectual property, i.e., products created through one’s creativity and intellect, that others may not use without permission. One of those is trade secrets. The most famous example is the Coca-Cola formula, maintained as a trade secret since its creation.

Each state, including California, enacts its own trade secret laws. California Civil Code sections 3426 – 3426.11 define a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, or process” which meets two criteria. First it must have “independent economic value” whether “actual or potential,” based on the fact that it is not “generally known to the public” or to people who would be able to make money or gain other economic value from using or disclosing the information. Second, its owner must take reasonable efforts to keep it secret from unauthorized persons.

If you have an invention, source code, a chemical formula that you are developing to create some product, an idea or prototype for some device, or anything with current or potential economic value, you can claim trade secret protection. An advantage over patents is that trade secrets are not filed with the government and thus not made public.

However, to claim trade secret protection, it is crucial that you comply with the second requirement by taking reasonable measures to safeguard the secrecy of the information that fit the situation. For example, you developed source code for a new computer app, but need funding to market it. If you give a potential funding source your source code to review without any confidentiality measures, you are not making reasonable efforts to keep the source code secret. On the other hand, if you have an attorney create a strong non-disclosure agreement (NDA) and require the potential funding source and its staff to sign that document in advance of disclosure, this could well be deemed a reasonable effort. In 2012, a small company, TechForward, won a $27 million verdict against Best Buy for misappropriating its trade secrets because it had done that.

If you left the papers containing such source code lying around the office conference room where unauthorized persons might be able to pick it up, you would not be taking reasonable efforts to keep it secret. Such material should be stored securely with access permitted only by people with a need to know and obligated to non-disclosure by an adequate, signed NDA. Your measures might also include non-disclosure of access passwords or encryption codes by otherwise authorized persons as well as other special technological procedures, such as required deletion or erasure by any employee who inadvertently receives trade secret data he or she is not permitted to hold.

What measures will be deemed reasonable under the trade secret law depends on various factors, such as the value of the trade secret, the size and income of your company, and the likelihood of industrial espionage in your industry aimed at the particular type of property. For the Coca-Cola Company, this meant specially constructing a large vault to protect its trade secret.

A downside to relying on trade secret protection is that if it does get out in spite of your efforts and becomes generally known to the public or to those who can profit from using it, that protection likely will be lost. A decision to treat information as a trade secret – as well as just what confidentiality measures are necessary to protect it – should be made deliberately with skilled attorney assistance.

For any questions concerning trade secrets, please contact attorney Helena Kobrin.

Protecting your own copyrights is of paramount importance. See “Annals of Copyright Number 2.” Vigilance in avoiding violations of others’ copyrights is equally necessary to prevent expensive legal disputes. See “The Annals of Copyright Number 3”. Monster Energy has learned this the hard way in a lawsuit brought by Beastie Boys. See Beastie Boys v. Monster Energy Co.

To promote its products, Monster Energy engages in so-called “lifestyle marketing.” As the Beastie Boys judge observed: “This entails sponsoring action-sport athletes and musicians, promoting concert and “festival-styled” tours, and hosting events. Monster’s advertising goal is to create an aggressive and fun “brand personality,” which will lead consumers to associate its beverages with music, action sports, video games, and attractive girls … (“Monster is a lifestyle in a can.”).

Monster strayed into the copyright infringement minefield when it made a four minute, six second video filled with Beastie Boys’ music and containing other, written references to the group. Beastie Boys “made some noise” when they sued Monster for copyright infringement and false endorsement under the federal Lanham Act. This law protects against trademark infringement and other actions that are “likely to cause confusion . . . as to the origin, sponsorship or approval” of a person’s distinct product or service.

Monster Energy admitted to copyright infringement but claimed its actions were not intentional. The Beastie Boys pressed on through a jury trial on the false endorsement claim and on whether some 15 instances of copyright infringement were willful. The jury found Monster Energy liable for 10 infringements, awarding damages at $120,000 per instance. It also awarded $500,000 for the false endorsement claim, for a total of $1,620,000.

So how did a large company like Monster Energy go wrong? Its first error was “recklessly disregarding” Beastie Boys’ rights by making a video with five songs by the group without seeking any permission. The court found Monster Energy’s infringement “derived from a gross lack of attention at corporate level to others’ intellectual property rights.” In contrast with protecting its own copyrights vigorously, it lacked any copyright licensing policy or training for its staff using others’ music for videos or other purposes.

These days, it is common for companies and organizations to use copyrighted music and other content that they do not own for a variety of purposes. For some uses, including playing music at an event, there are licensing agencies – primarily BMI, ASCAP and SESAC – that provide licenses permitting the action. For other uses, such as putting music in commercials, multiple types of licenses may be required. As Monster Energy learned, if you do not seek help to ensure you are covered with all the needed licenses, it may turn into an expensive mistake. While the Beastie Boys set-back will not put Monster Energy out of business, a similar judgment against a smaller company might have that result.

For help in obtaining the appropriate licenses, contact Helena Kobrin, a knowledgeable copyright attorney.

Protecting your own copyrights is of paramount importance. See “Annals of Copyright Number 2.” Vigilance in avoiding violations of others’ copyrights is equally necessary to prevent expensive legal disputes. See “The Annals of Copyright Number 3”. Monster Energy has learned this the hard way in a lawsuit brought by Beastie Boys. See Beastie Boys v. Monster Energy Co.

To promote its products, Monster Energy engages in so-called “lifestyle marketing.” As the Beastie Boys judge observed: “This entails sponsoring action-sport athletes and musicians, promoting concert and “festival-styled” tours, and hosting events. Monster’s advertising goal is to create an aggressive and fun “brand personality,” which will lead consumers to associate its beverages with music, action sports, video games, and attractive girls … (“Monster is a lifestyle in a can.”).

Monster strayed into the copyright infringement minefield when it made a four minute, six second video filled with Beastie Boys’ music and containing other, written references to the group. Beastie Boys “made some noise” when they sued Monster for copyright infringement and false endorsement under the federal Lanham Act. This law protects against trademark infringement and other actions that are “likely to cause confusion . . . as to the origin, sponsorship or approval” of a person’s distinct product or service.

Monster Energy admitted to copyright infringement but claimed its actions were not intentional. The Beastie Boys pressed on through a jury trial on the false endorsement claim and on whether some 15 instances of copyright infringement were willful. The jury found Monster Energy liable for 10 infringements, awarding damages at $120,000 per instance. It also awarded $500,000 for the false endorsement claim, for a total of $1,620,000.

So how did a large company like Monster Energy go wrong? Its first error was “recklessly disregarding” Beastie Boys’ rights by making a video with five songs by the group without seeking any permission. The court found Monster Energy’s infringement “derived from a gross lack of attention at corporate level to others’ intellectual property rights.” In contrast with protecting its own copyrights vigorously, it lacked any copyright licensing policy or training for its staff using others’ music for videos or other purposes.

These days, it is common for companies and organizations to use copyrighted music and other content that they do not own for a variety of purposes. For some uses, including playing music at an event, there are licensing agencies – primarily BMI, ASCAP and SESAC – that provide licenses permitting the action. For other uses, such as putting music in commercials, multiple types of licenses may be required. As Monster Energy learned, if you do not seek help to ensure you are covered with all the needed licenses, it may turn into an expensive mistake. While the Beastie Boys set-back will not put Monster Energy out of business, a similar judgment against a smaller company might have that result.
For help in obtaining the appropriate licenses, contact Helena Kobrin, a knowledgeable copyright attorney.

Helena Kobrin
February 4, 2015

A work that you create is copyrighted from the moment it is born. It need not be registered with the U.S. Copyright Office to be protected. See The Annals of Copyright Number 2 - You May Have a Copyrighted Work and Don’t Know It. So is there any real advantage to be gained from registering a copyright with that federal agency? The answer is “sometimes yes,” but not necessarily for every single thing you create.

Registration with the U.S. Copyright Office gives the copyright holder the right to file a lawsuit for infringement against an unauthorized user of that work. Title 17 United States Code section 411(a). It also enables the copyright holder to claim and possibly win actual or statutory damages (set amounts not requiring proof of actual loss) and attorney’s fees if the court confirms the infringement, section 412. A lot can be at stake. Statutory damages range from $200 for an innocent infringement to $150,000 for a willful one, for each violation.

Registration places the rest of the world on notice of the copyright and can thus deter a potential infringer.

Registration within the first five years after publication can add greater weight to the evidence that the work is original and protected.

Also, many registrations are easy and low cost, achievable online for as little as $35.00.

However, there are factors that might not favor registration. The number of copyrighted works one creates is a consideration. Whether the original work is central or incidental to one’s enterprise is another. For example, a performer who writes her or his own music might well be smart to register such creations. However, a band’s creation of throw-away promo for various live performances may not be worth the trouble because a lawsuit to protect those flyers might not ever be seriously considered.

Generally, the more valuable the copyright, i.e., the larger the audience for your work and the more you stand to profit from it, the more sense there is in prompt registration.

If you do choose to register any copyrights, it normally takes some time to receive confirmation. The Copyright Office currently advises that confirmation of online registration is taking up to eight months and up to 13 months for hard copy registrations. If you have any questions about copyright, including registration, fair use or other issues, contact our Of Counsel attorney, Helena Kobrin.

Registration with the U.S. Copyright Office gives the copyright holder the right to file a lawsuit for infringement against an unauthorized user of that work. Title 17 United States Code section 411(a). It also enables the copyright holder to claim and possibly win actual or statutory damages (set amounts not requiring proof of actual loss) and attorney’s fees if the court confirms the infringement, section 412. A lot can be at stake. Statutory damages range from $200 for an innocent infringement to $150,000 for a willful one, for each violation.

Registration places the rest of the world on notice of the copyright and can thus deter a potential infringer.

Registration within the first five years after publication can add greater weight to the evidence that the work is original and protected.

Also, many registrations are easy and low cost, achievable online for as little as $35.00.

However, there are factors that might not favor registration. The number of copyrighted works one creates is a consideration. Whether the original work is central or incidental to one’s enterprise is another. For example, a performer who writes her or his own music might well be smart to register such creations. However, a band’s creation of throw-away promo for various live performances may not be worth the trouble because a lawsuit to protect those flyers might not ever be seriously considered.

Generally, the more valuable the copyright, i.e., the larger the audience for your work and the more you stand to profit from it, the more sense there is in prompt registration.

If you do choose to register any copyrights, it normally takes some time to receive confirmation. The Copyright Office currently advises that confirmation of online registration is taking up to eight months and up to 13 months for hard copy registrations. If you have any questions about copyright, including registration, fair use or other issues, contact our Of Counsel attorney, Helena Kobrin.

Helena Kobrin
January 9, 2015

Effective January 1, 2015, California Assembly Bill 1443 plugs a gap that had left interns, trainees, and others lawfully involved in unpaid work experience unprotected from unlawful harassment and discrimination.

Since its enactment in 1980, California’s Fair Employment and Housing Act (FEHA) has prohibited employers from discriminating against “any person … in compensation or in terms, conditions, or privileges of employment” because of that person’s membership in a so-called “protected classification.” FEHA originally protected five such classifications: race, color, national origin, gender, and religious creed. That law now embraces some 15 protected categories, the rest added over the ensuing decades: ancestry, physical disability, mental disability, medical condition, genetic information, marital status, gender identity, gender expression, sexual orientation, age (40 or older), and military and veteran status. Government Code § 12940(c)

Unless a person’s inclusion in such a category has a direct bearing on job requirements (for example, a health club would obviously “discriminate” against men for a women’s locker room assistant position), FEHA deems an individual’s membership in a protected classification irrelevant to the hiring, promotion, pay level, benefits, discipline and termination of that person. The law is intended to level the playing field, confirming that businesses should base such employment decisions on competence and performance.

FEHA also prohibits workplace harassment to any of the above 15 protected categories against such employer behavior. Government Code § 12940(j)(l)

This law has varying definitions of “employer” obligated to comply with the above provisions. A company with five or more on its payroll over significant portions of the previous two calendar years is subject to FEHA’s discrimination provisions. Government Code § 12926(d) A company with but one employee is responsible for upholding FEHA’s harassment prohibitions. Government Code § 12940(j)(4)(A)

Until now, unpaid interns and trainees have fallen between the cracks, because such work experience programs were not included in the types of work covered by such FEHA protections. Government Code § 12940(c)

Beginning in 2015, a business employing five or more can no longer “discriminate against any person in the selection, termination, training, or other terms or treatment of that person in any apprenticeship training program, any other training program leading to employment, an unpaid internship, or another limited duration program to provide unpaid work experience for that person” based on his/her membership in a protected class. Government Code § 12940(c) (emphasis reflects amended language). Similarly, a business employing even one person cannot unlawfully harass such unpaid person interning or training with that company based on protected class membership. Government Code § 12940(j)(1) and (4)(A)

The new law separately requires that the religious observances of interns be protected and that they be free of any adverse actions – i.e., actions related to selection, termination, training, or other decisions – based on their religious beliefs. Government Code § 12940(l)(1)

While California businesses may not be legally obligated to pay interns or trainees and while such persons need not be included in all phases of operations, it has always been management’s safest course to afford them the same courtesies and protections extended to employees regarding discrimination and harassment. Now the law requires it.

If you need further information, please feel free to contact any of our attorneys – Tim Bowles, Cindy Bamforth, and Helena Kobrin.

Additional articles:
Who is an “Employee” Under California’s Anti-Discrimination Law?
Proving Workplace Discrimination is Now More Difficult in California
Age Discrimination in Employment
A California Employer’s Guide to New Laws 2012: Genetic Information Discrimination
Workplace Age Discrimination Laws Protect “Old People” Only

California Labor Code section 515.5 exempts certain employees in the computer software field from overtime compensation. The criteria include set minimum compensation. The California Department of Industrial Relations (DIR) recently increased this minimum, effective January 1, 2015.

To comply with the section 515.5 exemption, California employers will now have to pay otherwise qualified computer software employees a minimum hourly rate of $41.27, up from $40.38. The new rate translates to $7,165.12/month or $85,981.40/year.

While persons who qualify for this exemption need not be paid at “time-and-a-half” or “double time” rates for overtime hours, employers should accurately document the actual number of hours such qualified persons work. While companies commonly direct employees to track their hours worked, employers are primarily responsible for ensuring those records are truthful and complete.

An employee is an exempt computer professional only if he or she also meets each of the high-level skills and duties criteria for that exemption. An employer should ensure that any such worker meeting the very specific requirements laid out in Labor Code section 515.5. Among these, the employee must be “primarily engaged” (more than 50% of the time) in intellectual or creative work which requires “the exercise of discretion and independent judgment” applying systems analysis to determine the “functional specifications” of hardware, software or systems; designing computer systems or programs; and/or documenting, testing, creating or modifying computer programs related to computer systems software or hardware design.

If a computer professional meets all of section 515.5 requirements, he or she need not possess any particular academic degree to be eligible for this exemption.

Computer professionals also may be qualified for other exemptions, including the administrative or executive exemption. Each of those categories of course carries its distinct qualification rules.

For more information, please contact any of our office’s attorneys, Tim Bowles, Cindy Bamforth or Helena Kobrin.