Question: An employee filed a labor suit against my business, and is now seeking to have the case moved to Federal courts. Can this actually be a Federal case?
Nowland Law: It could. Many labor disputes start through California’s Labor Board, who handles disputes like misclassification, unpaid wages and overtime, etc. Others start in a local California court. However, one must remember that there are many federal laws on the books regarding employment regulations, and if the primary complaint of the suit relies on Federal laws, a plaintiff could move to have the case tried in Federal Courts.
What this means to your case is yet to be seen. In some cases you may have to find different legal counsel who are allowed to practice law in Federal courts. Some processes are different, and obviously, the case law will be different. In general, it is good to have a business law firm that is prepared to handle State Courts, Labor Board, and Federal Court employment disputes.
Question:
Restaurant equipment exploded in our workplace. I have worker’s compensation, but what legal risks am I looking at?
Nowland Law:
If you have worker’s compensation that will sufficiently cover any harm that was done to an employee, and those affected employees use those funds, that should subrogate a lawsuit, unless a case can be made that the damages were exceeding what was paid out. Without knowing specifics, it would be very hard to determine what other liabilities you were facing, so you should contact a knowledgeable business lawyer as soon as possible to assess your risks.
Question:
I’ve had a few employees move over to a competing business. I want to make sure my employees cannot join a competing company in a few months using the training I gave them. How do non-compete agreements work?
Nowland Law:
In California, most non-compete agreements are not enforceable. The California Civil Code specifically addresses this, and it was done very early in California’s history. This has not stopped a multitude of companies from using non-compete language in their contracts. Whether this is willful, or a side effect of companies using boilerplate legal documents, I’m not sure. Either way, a business will not be able to stop a California employee from working with a similar company. This includes cases in which an employee in any other state of the union has signed a non-compete, and then moves to California to work with a company in a similar industry. The employee will not have to comply with that part of the agreement, due to California law. There are very few exceptions.
If an owner is selling a business, they may be held to comply with non-competes. One can imagine a situation where this is entirely reasonable. Say, for example, John is selling his real estate negotiation consulting firm to Jim. Jim doesn’t want John to open a new consulting house a few weeks or months after the sale. The word would get out, some of Jim’s acquired clients may move to John’s new firm, and Jim would have essentially financed John.
The other situations in which California non-competes can be upheld are when they involve partnerships (for similar reasons.)
Notwithstanding, you should consult a business attorney about your specific situation.