Blog No. 162 

February 28, 2023

 Recent and Major Business / Real Estate Law Developments

By Mack W. Borgen

University of California at Berkeley (Honors, Economics); Harvard Law School; National Award-Winning Author.

Call Me Anytime

General Business Planning

or Corporate, Business or Real Property Law Matters

805-450-2602

—

Please See My Personal Note at End of This Writing 

——-

Recent Business, Contract, and Real Estate Cases and Developments

General Sources: Daily or Periodic Judicial and Legislative Reports from various sources including the California Lawyers Association Daily Reports, the CLA’s Monthly Business Law News, and Announcements and Press Releases from the (California) State Attorney General Office.

1.   Businesses – Changes in California Employment Law. Effective January 1, 2023, there were a number of important changes in California employment law. The following is a (very) brief summary of some of those major changes: 

A.  Minimum Wage increased to $15.50 for all employees (Effective Jan. 1, 2023).

B.  Expanded Definition of “Family Member” allowed to take unpaid, job-protected leave to care for such family member. The definition is limited to one designated person per 12-month period.

C.  Bereavement Leave. With respect to all businesses with five or more employees, then persons who have been employees for at least 30 days have the right to take up to five (5) days of bereavement leave (days need not be compensated). Employers have the right to confirmation evidence (e.g., death certificate, obituary).

D. Reproductive Rights Protection. Employers are prohibited from discriminating against any employee or job applicant based upon their reproductive health care decisions.

E. Off-the-Job Protections for Cannabis Users. Effective next year, employers are prohibited from discriminating against any employee or job applicant based upon such person’s use of cannabis off the job and away from the workplace.

F. Workplace Safety. Employees cannot be retaliated against for refusal to report to work during emergency conditions or if they have a “reasonable belief that the workplace is unsafe.” NOTE: The statute specifically provides that a health pandemic does not constitute an emergency condition.

 G. Pay Scale Transparency and Disclosure Requirements. Employers are now required to make pay scale information available to job applicants, and there has been a considerable expansion of California’s pay data reporting requirements.

2. Corporations – Manufacturing – Minimization of Plastic and Recyclability Litigation. There is a growing trend of citizen advocates and environmental groups to file litigation asserting a wide range of novel theories with respect to companies that use or rely upon plastic – even if the companies do not produce a plastic product or are not involved in the disposal of plastic products. Basically, this trend is another dimension of ESG-based litigation, and it is poised to soon affect companies in virtually all industries. Senior management and the Board of Directors need to be aware of these types of litigation risks because the steep increase in such lawsuits is expected to continue and, in the opinion of some, could reach the litigation level previously associated with asbestos, tobacco, and opioids.

3. Corporations – Online Business Websites Not Deemed “Public Accommodations” for Purposes of the ADA. A California appellate court has ruled that online-only businesses are not “public accommodations” for purposes of the Americans with Disabilities Act. This finding was in response to a number of ADA-based lawsuits which alleged that such website-based businesses discriminated against the visually impaired.

4. Real Property Law – Purchase of Property Does Not Transfer a “Takings Claims.” A buyer of real property may conduct relatively thorough due diligence but may still only become aware of a cause of action based upon a taking or inverse condemnation after the property is acquired. Based upon a new California ruling, the transfer of real property normally does not include an assignment of inverse condemnation cause(s) of action. The court held that the cause of action shall not be deemed to have been automatically transferee unless there is “clear manifestation” of the intention to so assign such intended claim. The ruling is unclear as to whether the claim must be specifically identified at the time of such transfer. I believe that in light of this decision, real estate attorneys should adjust our documentation so as to expressly provide that any inverse condemnation rights or actions are included within the definition of the assets being conveyed.

5. Corporations and Other Businesses – Rights of Passive Owners to Review Corporate Records. Whether or not a passive owner of corporate shares or LLC interests can have access to the books and records of the business depends upon multiple factors. Such factors include the following: (a) type of business, (b) whether the business is a corporation or LLC, (c) what types of records are being sought, (d) whether the business formation documents address such access matters, (e) the petitioner’s percentage ownership interest in the business and how long the owner has held such ownership interest, and (f) even the purpose of the request. To avoid what can be combative litigation about such access, the rights and limits of the owners to access business records (and the procedures therefor) should prudently be set forth in the organizational documents.

6. Stocks and Investments – Requested Clarification and Disclosure of an Investment Adviser’s Criteria with respect to a Company’s Proposed ESG Investments. Many investment companies now offer funds that purport to prioritize ESG factors. However, it has been determined that, in reality, these funds sometimes only give little consideration to these factors. Instead, the funds are touted as ESG investments merely as a way to lure investors who or which may want to invest according to certain ESG criteria. For this reason, the California AG has expressed support for a recent SEC proposal to increase transparency and accountability of funds claiming to prioritize ESG factors.

7. Delaware Corporation – Even More Liability Protection for Corporate Officers. Some businesses elect to incorporate in Delaware because of the state’s general corporate-friendly environment and, more specifically, because of the considerable level of protection offered to such corporations and their directors under Delaware law. For example, since 1986, Delaware has allowed a corporation to eliminate or limit a director’s personal liability to the corporation and its shareholders for monetary damages – even for breaches of fiduciary duty (!) so long as liability limitation provisions are set forth in their certificate of incorporation. Effective August 2022, Delaware (absurdly) went even further. It will now also extend liability exculpation rights to certain officers of a corporation including, without limitation, the corporation’s President, CEO, COO, CFO, Chief legal officer, controller, treasurer, and chief accounting officer.

The White Binder

A Personal Note

Some of us – I know – not you!! Are getting older.

I recently completed my own personal copy of my The White Binder.

It is unique. It organizes the information which will be necessary for heirs, relatives, and friends.

It is detailed. It took me three (3) days to insert my information in my own copy.

As the author of this book, I am biased, but I highly recommend that you (and your spouse or life partner) get and complete your copy(ies) today.

I have the highest regard for estate planning attorneys and the critical services they provide,

But 

ESTATE PLANS (AND TRUSTS AND WILLS) ARE NOT ENOUGH.

Each copy of The White Binder is personalized for you. It uses a fill-in-the-blanks format and is shipped in an easy-to-use binder.

I already have shipped more than 135 copies to friends and associates.

Get Your Copy Today

The White Binder

(3^rd Edition) (2022) (124 pages of questions, fill-in blanks, and reminders)

(Questions, reminders, fill-in blanks, contacts, weapons, cash stashes, passwords, personal bequests, and on and on)

Just email me at mwborgen@live.com (or call me at 805-450-2602)

• Give me your mailing addresses and the number of copies you want. Please allow me 10-15 business days to print your copy.

Binder format $49.95 plus $6.95 Shipping

You Can Pay After Delivery.

Get a copy for yourself, your spouse or life partner, and even for your brothers and sisters!! We all will need it.

–

Copyright 2023 by Mack W. Borgen. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, except in the case of brief quotations embedded in critical articles or reviews, without prior written permission by the author.