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Can California Employers Still Have Mandatory Arbitration Agreements with Employees?

Business owners and employers in Fremont and throughout Northern California should know that they may not be permitted to require employees to agree to arbitration clauses or agreement under particular circumstances, according to a new law in the state. The new law, Assembly Bill 51, limits the ways an employer can use an arbitration clause. In brief, you may not be able to require new employees to sign employment contracts that contain arbitration clauses. We want to provide you with more information about the new law, which was supposed to take effect in early 2020, and to explain what its implications might be for California businesses.

Understanding California Assembly Bill 51

California Governor Newsom signed Assembly Bill 51 into law in October 2019, to commence in January 2020. The law is designed to prohibit employment discrimination, and one aspect of the bill is that it prohibits employers from requiring job applicants or current employees, as a condition of their employment, to enter into arbitration agreements. The legislative reasoning behind this part of the bill was that arbitration agreements can unnecessarily silence employees and can prevent them from making concerns about sexual harassment at work, public.

Under the new law, it is unlawful (and actually criminal) for an employer to require a job applicant or an employee to agree to an arbitration under the California Fair Employment and Housing Act (FEHA) or the California Labor Code, as a condition of that person’s employment. The law does not invalidate currently existing arbitration agreements. Yet business advocates have filed a lawsuit to prevent the new law from taking effect, arguing that the Federal Arbitration Act (FAA) preempts AB 51. The U.S. District Court for the Eastern District of California recently issued a preliminary injunction that prevents California from enforcing the terms of AB 51. Until the case is ultimately decided, what should your business do?

Impact of AB 51 on Businesses in California

For many businesses in California, arbitration—including mandatory arbitration—can help to keep business costs down and can prevent costly business litigation in the event of an employment or other contract dispute. As such, it is in the interest of many small businesses in Northern California that the law be preempted by the FAA.

In the meantime, what should you, as a business owner in the Fremont area, do to ensure that you are in compliance with existing law? Most importantly, you should know that any arbitration agreement that existed prior to January 1, 2020—when AB 51 was supposed to take effect—does not fall under the new law at all. Even if it were to take effect, arbitration agreements in force prior to this date will remain lawful. Next, you should keep in mind that AB 51 only applies to claims under the FEHA or the California Labor Code. Accordingly, it is certainly lawful to require employees to agree to arbitration for disputes that would not arise under either of these laws.

If you want to require an employee or prospective employee to agree to arbitration for claims that could potentially be covered by AB 51, it is important to recognize that you are taking a risk as a business. If AB 51 is ultimately determined to be lawful and not preempted by the FAA, then any arbitration agreements you make after January 1, 2020 could result in both civil and criminal penalties. However, if AB 51 ultimately cannot take effect, an arbitration agreement that would otherwise be prohibited by AB 51 could be enforceable in California. If you have questions about your business’ situation, you should speak with a business lawyer as soon as possible.

Contact a Fremont, CA Business Law Attorney

If you have questions or concerns about how the new limits on arbitration could impact your business, it is important to speak with an experienced Fremont business law attorney as soon as possible. The law will have significant practical considerations for many small business owners, tech companies, and other businesses in the region.

Contact the Law Office of Lynnette Ariathurai online today or call us at 510-794-9290 to learn more about whether California employers can still have mandatory arbitration agreements with employees. We represent business owners across Northern California in Fremont, Hayward, Union City, Milpitas, and Newark.

arbitration clause, assembly bill 51, business law attorney, employment contracts, mandatory arbitration agreements

Top 5 Business Contracts Mistakes

Contracts and contract reviews are part of everyday life for Bay Area businesses. However, many business owners and managers make mistakes when creating, considering or approving a business contract that can have catastrophic ramifications on your business. Here are five common mistakes in business contracts and how to avoid them.

1. Using Internet or Ready-Made Contract Forms

There are several reasons a ready-made contract form will not work for you and your business. They include:

Contracts must be relevant in your locality. A form contract from Michigan may not contain clauses that are standard in California contracts.
State laws are varied. The law could be different from where and when the contract was originally drafted. You must review borrowed language from such a contract for amendments to relevant state law, including additions and subtractions to the various codes at play in the agreement.
Contracts are drafted from the perspective of one side over the other; is the form contract you are reviewing beneficial or detrimental to your deal?
Contracts for one type of entity may not be relevant for other types of entities

2. Seeking Legal Advice After Signing the Contract

Even if your deal is relying on a generic contract template you pulled from the Internet, have a business contract lawyer review it before you sign it to make sure it protects you and includes all of the terms it should and does not put your business at risk.

3. Forgetting the Recitals

A recital, in legal terms, is a preamble to the contract. It provides a general idea to the reader about who the parties are, what the contract is about, and why the parties are signing the contract. Often overlooked during the contract drafting and negotiation phases, when a dispute arises over contractual interpretation, the court or arbitrator may use the recitals as an aid to interpretation of the contract. Focus on the operative provisions of the commercial contract, but do not forget to set the scene and provide the reader of the contract with background information.

4. Not Knowing Which Clauses to Include and Which to Leave Out

Not understanding boilerplate (standard contract clauses) can come back to bite you when a dispute arises. A business lawyer provides advice as to which clauses should be included in your contract and which clauses should not.

For example, an assignment clause should be included in a commercial contract. An assignment clause will permit you to assign the contract to another entity (someone who buys your business). Without an assignment clause, the contract may not be sold or transferred should you sell your business after the commercial contract is signed.

Another issue that can be addressed by a business attorney is whether a contract should include an arbitration clause. The arbitration clause must also contain information about the impact of any decision by an arbitrator. With no or weak arbitration clause included, the statement may be advisory and not enforceable.

5. Forgetting That Words Have Meaning

Form contracts are notorious for containing vague and ambiguous language. Using words without clear definitions is dangerous to contracting parties because it places the interpretation of such language in the hands of someone else. Ambiguities are normally construed against the drafter of the contract. It is possible then that ambiguous language will have at least three interpretations – yours, the other party’s, and the court or arbitrator’s. A court or arbitrator may be bound to interpret such a clause using the custom and practice of your locality, which can be different from the custom and practice of your industry and even your intent at contract formation.

Ask Us to Review Your Business Contract

Make sure that your commercial contract is in writing and reviewed by an experienced and knowledgeable business contract attorney who can provide you with actionable advice and counsel to protect your business.

Avoid these and other common business contracts mistakes. Contact us now about reviewing your commercial contract before you sign it. We represent and counsel clients in Fremont, CA and the surrounding communities of Newark, Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, and Santa Clara, CA.

arbitration clauses, business contracts, contract attorney, contract mistakes

A Legal Expert Should Be Reviewing Your Businesses Documents and Agreements

Here’s Four Really Good Reasons

Many businesses don’t often hire independent counsel to review their business documents. The documents in question can range from a simple sales contract between your company and a new client, to a commercial space lease for a new location, to a complex asset sale agreement to sell or purchase an asset, product, or business.

It’s quite easy and natural for the Owner, Principal, or President of the company to review and sign-off on any contract that crosses his desk. Who better than the Owner, Principal, or President is most versed in the business and its products, markets, and services?

The Owner, Principal, or President of the business along with the business unit seeking the contractual relationship is most certainly the expert on the subject of the deal. The internal review is just one aspect of the review process for a legal document. When the document in question is a legal document or agreement, a legal expert should be brought in by the business to offer a legal perspective. It is critical for a legal professional to take a look before the document is signed and presented to the other party for approval.

Here are four really good reasons why in your next review of a business agreement you should strongly seek a legal expert to help you legally interpret and analyze the document:

1. The cost of skipping an attorney review of your business agreements could put you out of business in comparison to what it costs to have someone review the documents and analyze the deal before signing the agreement.

2. An attorney review of your business agreements can offer a fresh legal perspective and provide you with advice of current customs and practices in your industry relating to contracts.

3. You are not an expert at contract interpretation or the law if a dispute arises. A lawyer is able to provide clients with interpretation and analysis of the law in your jurisdiction to the facts of your contract and/or potential dispute. No other professional is able to do that. Especially if a mistake was made during the contract formation or execution process, a lawyer can help your business solve the problem and defend your company in court when a deal goes sideways.

4. A business lawyer is also your legal representative. During the drafting and negotiation of the contract, a business lawyer can stand in your place, negotiate with the other party’s counsel, and provide you with actionable intelligence on points in your agreement where you can influence or change terms to protect your business and receive a favorable outcome.

If you are a business in Fremont, Newark, Hayward, East Bay, Milpitas, Union City, San Leandro, Gilroy, San Jose, and Santa Clara, California, seek the legal advice and counsel of a business lawyer. The Law office of Lynnette Ariathurai is ready to help.

business agreements, business contracts, document review, legal representation

Contract Dispute May Render Group Of Elderly People Homeless

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Thursday, January 18, 2018.

A group of families in another state are highly concerned about a contentious battle that remains ongoing between a Medicaid insurance provider and an assisted living and care facility. The situation involves a contract dispute that is negatively affecting elderly members of the families who happen to live in the assisted living facility. In essence, they’ve been told that if the problem is not resolved by a particular date, they will have to vacate their residences. Some readers in California may relate to the situation.

Younger family members of the residents have expressed their concerns, saying the notices those affected received in the mail were akin to possible evictions. Spokespeople for the nursing facility say they want nothing more than to peacefully and swiftly resolve the issues at hand so they can continue providing the highest level of quality care they have always provided for their residents. The central focus of the contract dispute between the personal care home and the insurance company has to do with residential rates.

The daughter of a 91-year-old resident says she’s very worried her mother will have to move far away from her if the current problem is not resolved soon. There are approximately 70 elderly residents who would be in similar circumstances if the nursing home and insurance company don’t achieve an agreeable solution. This situation is a prime example of how contract disagreements between specific parties often impact others who may not be directly involved in a particular contract.

A business and commercial law attorney can be a great asset when a negotiation problem or contract disagreement arises. An experienced attorney who is well versed in California business laws can advise a client as to what the most viable option available might be to get things back on track in the least stressful manner possible. Anyone in Florida concerned about a current contract problem can seek support by requesting a meeting with a commercial law attorney.

Contract Disputes, medicare

Quick Action And Negotiation May Solve Contract Dispute, Early On

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporationposted in Contract Disputes on Thursday, October 26, 2017.

Many people in California enjoy traveling by bicycle. In fact, San Francisco is a prime location for businesses catering to bicyclists, such as Ford GoBike, a bike sharing program that allows travelers to access bicycles inexpensively for personal travel throughout the city. This particular company says it has an exclusive contract with the city; unfortunately, a contract dispute has apparently arisen once word got out that the city’s transportation agency is planning to forge a deal with a Ford GoBike competitor.

In an effort to mitigate the contract dispute before things get out of hand, the Metropolitan Transportation Commission has initiated a dispute resolutions process. The MTC bases its actions on the threat of legal action regarding Ford GoBike’s allegations that the city is breaching an existing agreement. The MTC said that it has received word that the city plans to enter a contract with another bike share program; therefore, it believes problem solving techniques may help diffuse a potentially acrimonious situation if Ford GoBike decides to take the matter to court.

A notable factor in the situation is that Ford GoBike bore complete financial impact when it started its bike share program in the city. The company’s willingness to foot the entire bill (with no cost to the public) was primarily based on the agreement that it would have exclusive rights to running such a business in the city. Some say, if left unresolved, this situation could have a ripple effect in other regions.

Generally speaking, California company owners who work closely with experienced legal representation are often able to overcome their contract-related disagreements sooner than those who try to handle their own problems. A good place to start when seeking guidance about a particular issue is to request a meeting with an experienced business and commercial law attorney. It is better for the bottom line in the long-run if a dispute is resolved in as timely a manner as possible.

arbitration, Contract Disputes, negotiation

Attorneys Know How To Word Things To Avoid A Contract Dispute

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Tuesday, June 13, 2017.

Business people in California and throughout the nation often enter written agreements with one or more parties to secure services, employment and/or other commercial transactions. When a contract dispute arises, it can cause immediate and long-lasting negative repercussions, including productivity delays and economic losses. Terminology used within a particular contract is often essential to the success of the agreement; therefore, it’s typically best to allow an experienced attorney to review a proposal before signing anything.

An business and commercial law attorney understands the importance of choosing words carefully when drafting a prospective agreement that will become legally enforceable. One or two words can make all the difference regarding each party’s obligations and responsibilities contained therein. To prevent a contract dispute, it’s crucial to make sure all parties understand and agree upon the chosen terms and phrases placed in writing.

Wording happens to be a main issue in a current contract disagreement in another state. The situation involves a group of educators who serve at least 13,000 students in their area. They want administrators to change contract terminology pertaining to employee transfers. They’re also fighting for an increase in long-term pay as their current starting pay is satisfactory, but they make nearly $5,000 or so less than area counterparts once they hit the 10-year mark.

Hiring a business and commercial law attorney to negotiate on one’s behalf and aggressively pursue all options available toward a favorable outcome is a smart move many California business people make. Those who hope to avoid a contentious dispute understand that experienced representation is often a key factor in achieving their goals. An attorney can provide many contract services, from actually drafting a proposal on a client’s behalf, to reviewing a prospective agreement or litigating a particular issue as needed.

Need help with contract reviews, creation, or representation? Please contact the Law Office of Lynnette Ariathurai, serving businesses in Fremont, Hayward, Union City, Castro Valley, Milpitas, or Newark, CA.

Contract Disputes, contract wording

Aggressive Representation May Help Resolve Contract Disputes

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Tuesday, June 6, 2017.

Successful California business owners may relate to a recent disagreement that iPhone maker, Apple had with Finnish company, Nokia. The contract dispute has reportedly ended, but not without a struggle. Often, such situations can be diffused when a savvy business owner understands the importance of hiring aggressive legal assistance to negotiate (or litigate, if necessary) a solution.

The central focus of the Apple versus Nokia contract dispute was intellectual property. Apple told Nokia it would no longer pay for use of its patents. Apple also claimed Nokia committed extortion.

Nokia said many of Apple’s products, including iPhones, tablets and other electronic devices, contained its patented property and that Apple needed to pay for what it uses. When these types of disagreements arise, and a lot of money is at stake, tempers can become quite heated in court. Both sides are obviously trying to protect their own interests.

That’s where keen insight and experience can come in handy. A California attorney who knows the ins and outs of contract litigation can protect a business owner’s rights without compromising the bottom line. Those who wish to obtain the best results in the least amount of time possible typically hire aggressive representation to act on their behalves. Regardless of whether a particular business owner is fighting against accusations or is attempting to right a wrong that’s been committed against his or her company, retaining the help of a business and commercial law attorney is often a crucial factor in obtaining a successful outcome.

Contract Disputes, contract representation

Problems Often Arise if Contract Disputes Go Unresolved

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Friday, July 29, 2016.

California business owners are undoubtedly not strangers to various challenges that arise when the terms of a signed agreement are not honored or another type of disagreement erupts in between signature parties. If left unresolved, a contract dispute can cause lasting and devastating negative effects for business owners and workers alike. In a recent situation in another state, a business relationship that has been in effect for 30 years is coming to an end because of a contract disagreement.

The collaboration between a university research center and a state’s mental health facilities has been functioning for three decades. During that time, researchers say they created a new system for treating those with mental illnesses. In order to implement the plan, the researchers would offer training to mental health workers at many of the state community mental health centers. The recent contract dispute will apparently cause that cooperative effort to cease.

One spokesperson for the state said that changes in the contract were needed to ensure that Medicaid funds used to support the research center’s efforts were being spent appropriately. A research center spokesperson responded by saying that the center could not accept the offer made by the state because of certain provisions in the offer. Reportedly, there was a deadline for contract resolution in place and that has since passed.

Due to the fact that the contract issues were not resolved, the business and community efforts between the two entities will now come to an end. Many people have been laid off from their jobs. The research center is being closed. To avoid similar outcomes, a California business owner may want to act alongside a skilled business attorney who has experience negotiating contract disputes and who has achieved successful results for others.

Source: kmuw.org, “Mental Health Contract Dispute Sparks Criticism Of Brownback Policies“, Jim Mclean, July 13, 2016

Contract Disputes

The Dangers of Trying to Resolve Business Disputes on Your Own

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Tuesday, May 24, 2016.

One of the most common mistakes that small businesses make is trying to resolve disputes on their own. In an effort to save money – and thinking that the issue or conflict will simply go away – many small business owners do not take a proactive approach to dispute resolution.

Disputes don’t just go away. Particularly if the opposing party hires a lawyer of their own. It is critical that you take potential legal issues seriously and work with a trusted business law attorney to resolve the dispute as quickly as possible, protecting your long-term interests.

Here are a few things to keep in mind when faced with the threat of business conflict:

If you are contacted by an attorney of an opposing party, respond only through your own lawyer. Anything that you say in response will be evidentiary. You run the risk of accidentally making a statement that could cost you significantly or misspeaking in a way that can be used against you. Immediately contact your lawyer and only communicate through legal representation.

Be aware of disgruntled employees. If you suspect that an employee is upset for any type of employment law or human resources related matter, immediately seek the counsel of your attorney. You may have made a mistake or error that could result in a lawsuit. A lawyer can help you resolve the matter before it escalates.

Make sure that you understand your contracts and agreements in place.Hopefully you have worked with a skilled business law attorney in advance to create a contractual infrastructure that will protect the business in case of conflict. If you sense that a dispute is coming, review these contracts with your attorney and address any weaknesses immediately.

Do not try to make any under the table agreements. Far too many business owners try to make problems go away by throwing money at them or negotiating foolish agreements on their own. Always seek the guidance of a lawyer before making an agreement. Allow your attorney to conduct prudent negotiations on your behalf.

Remember that mistakes you make during disputes could come back to haunt you. Each decision you make during this period of time is critical and an error could have long-term implications – some could sink the business.

The Law Office of Lynette Ariathurai partners closely with businesses throughout the Bay Area to ensure they make sound decisions and provides strategies that resolve disputes efficiently and in a cost-effective manner. Take conflict seriously and seek trusted legal guidance. Click here for more information.

business disputes, Contract Disputes, employee disputes, partner disputes

How To Resolve a Contract Dispute in California

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Thursday, April 28, 2016.

California is a beautiful state, teeming with businesses of all sorts, from major commercial corporations to small entrepreneurial endeavors. Though business models and effectual productions in each company vary, every business is at risk if a contract dispute arises. It is typically in a company’s best interests to solve each dispute in as swift, fair and economically feasible a fashion as possible.

The Law Office of Lynnette Ariathurai, A Professional Corporation, has successfully represented business and commercial clients throughout the state. Our experienced attorneys understand that a valid signed contract is legally binding. Each agreement carries certain responsibilities and obligations to which all signed parties must adhere.

If you are considering entering into a signed agreement, or you have already signed a contract and are facing legal problems because it has been breached, we can help you determine how to proceed to legally address the issue. Whether your situation involves a service agreement, management or wage issue, or an independently contracted assignment, we can review the contract and clarify the legal terms to help you make informed decisions about obtaining an agreeable solution to the problem. We are also prepared to help business clients draft new plans or contracts to help them avoid possible complications during the process.

A contract dispute can greatly impede the productivity and profitability of your California business. The Law Office of Lynnette Ariathurai, A Professional Corporation, is committed to offering sound legal counsel and effective guidance for all of your contract needs. One of our main goals is to help you accomplish your business objectives at minimal cost.

Contract Disputes, drafting a contract, legal agreements, service agreements