Mind Your Business: Part Three – Agreements Among Founders and the Entity

There is a nearly infinite number of agreements founders can make amongst themselves and with the business. A few of the most common types are discussed below. Keep in mind that some agreements will not be valid if they contradict a statute that governs the operation of your particular entity type. This article does not take consideration of such statutes. As always, before drafting any agreements that will impact your business, you should consult with a knowledgeable attorney to discuss your goals and the best way to reach them. Founders’ Agreement A Founders’ Agreement is a great starting point when you first meet with your fellow founders to get in writing the things you expect from your business. It can also help to solidify your common goals and see the path of least resistance to get there. The Founder’s Agreement will often include the roles and responsibilities of each founder, the method for decision-making and operation of the business, ownership interest, how contributions will be valued, vesting of interest, and how to handle the voluntary (or involuntary) departure of a founder. It is important to keep in mind that the Founders’ Agreement is just a roadmap for the business and to be sure all appropriate topics are included in the operating documents of the entity.…

Fresh Off the Governor’s Desk: New Slate of Employment Laws for California Employers

Employers take note: a new slate of employment laws were signed into California law this month, with some taking effect as soon as January 1, 2018. Read on below to see how a few of these new developments may affect your business.   AB 450: Employers Prohibited from Consenting to ICE Searches   Signed by Governor Brown on October 5th, AB 450 prohibits California employers from voluntarily consenting to federal Immigration and Customs Enforcement (ICE) officers’ requests to search a workplace.  Like other searches conducted by government officials, workplace searches conducted to enforce federal immigration law require either a judicial warrant or consent to search.  AB 450 will remove the latter option, prohibiting employers from consenting to a search of any non-public premises or employee records and forcing immigration officials to pursue a judicial warrant in each case.   As part of a broader effort to make California a “Sanctuary State,” AB 450 is intended to frustrate the Trump administration’s more robust enforcement of federal immigration law.  However, in AB 450’s effort to protect undocumented workers and their employers from the hazards of immigration enforcement, the law puts employers in a tight spot between opposing state and federal interests.   A first-time violation will penalize an employer with a $2,000 to $5,000 civil penalty, which…

The EEOC’s Harassment Prevention Efforts Should Be Highlighted In The Wake of The Harvey Weinstein Debacle

The headlines in the news these last two weeks involving Hollywood producer Harvey Weinstein has put the spotlight on the issue of sexual harassment in the workplace.  But the Equal Employment Opportunity Commission (EEOC) has been attempting to focus our attention on the issue of workplace harassment for over a year now, when it issued a study of harassment in the workplace, in an effort to “reboot workplace harassment prevention efforts.”  The “Report of the Co-Chairs of the EEOC Select Task Force on the Study of Harassment in the Workplace” (“the Report”) came out in June 2016, finding that workplace harassment remains a persistent problem and too often goes unreported.   The Select Task Force consisted of two EEOC commissioners as well as outside experts from employer, employee, human resources, academic, and other communities. The focus of the report, authored by co-chairs Chai R. Feldblum and Victoria A. Lipnic, was unwelcome or offensive conduct based on a protected characteristic under employment anti-discrimination law.   The Report noted some interesting statistics regarding the prevalence of harassment-based complaints. In 2015, the EEOC received approximately 28,000 charges that alleged harassment from employees working for private or state or local government employers, and 6,741 charges from federal government employees. Broken down by protected characteristic, sex-based harassment was most prevalent in…

Federal Proclamation Effect on The Status of Employment Discrimination Laws in California

On October 4, 2017, Attorney General Jeff Sessions announced that under his interpretation of Title VII, gender identity and transgender status are not protected. According to Attorney General Sessions, “Title VII’s prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity per se, including transgender status.” The phrasing causes some pause, given that, in 1998, the United States Supreme Court held in Oncale v. Sundowner Offshore Services that Title VII also applies to harassment between members of the same gender. The Justice Department recently made the same argument with respect to sexual orientation at oral argument before the Second Circuit in Zarda v. Altitude Express. This is a significant departure from the Obama Administration as well as the current position of the Equal Employment Opportunity Commission, which interprets Title VII to prohibit such discrimination. While this topic continues to be debated, employers may be struggling to confirm they are in compliance with the ever-evolving legislation. Background Title VII of the Civil Rights Act of 1964, prohibits, in relevant part, discrimination and harassment “because of […] sex.” Title VII does not, however, explicitly prohibit discrimination based on sexual orientation, gender identity, transgender status, or gender expression. Until recently, Circuit Courts of Appeal unanimously interpreted the term “sex”…

Employment Discrimination on the Basis of Sex is Prohibited by Title VII of the Civil Rights Act, 42 U.S.C. §2000e(k).

A few weeks ago, the 11th Circuit of the United States Court of Appeals upheld a favorable jury verdict on behalf of a former Alabama police officer under the Pregnancy Discrimination Act (“PDA”) and the Family and Medical Leave Act (FMLA). The officer was working as an investigator on the narcotics task force when she became pregnant. Her supervisor told her on more than one occasion she should take only six weeks of FMLA leave however, the officer took twelve weeks of FMLA leave.   Prior to taking leave, the officer received a performance review which “exceeded expectations.”  However, on her first day back from leave she was written up. Eight days after returning from leave the officer was reassigned which resulted in losing her vehicle and weekends off as well as receiving a pay cut and different job duties. She also had to start wearing a ballistic vest all day as a patrol officer. She previously was not required to wear one in the narcotics task force.   Before beginning the patrol division, the officer took leave after being diagnosed with postpartum depression. The officer’s doctor wrote a letter to the Chief recommending she be considered for alternative duties because the ballistic vest she was now required to wear on patrol duty was restrictive and…