Sound Business Insights

In Sound Business Insights Episode 42 - Employer Updates for 2024 Part 2 Dan Watkins continues to explain changes in California employment laws that will affect employers in the coming year.  Part 2 of the conversation picks up where part 1 left off.  If you have not listend to part 1 you may wish to go back and review it after you complete this podcast.  SB 553 implements additional workplace violence protections for those who work in-office (versus those who work remotely). Small employers with less than 10 employees that are not open to the public are excluded.  There are initial steps to be taken this year in preparation for an expected roll out in 2025. 2025 will also see the expansion of TRO coverage to include harassment by another employee, client, vendor, etc.

Sound Business Insights Episode 42 - Employer Updates for 2024 Part 2 goes on to cover several new laws which will impact most employers.  Off duty cannabis use is now permitted in the State of California.  Protections are prvided for off-duty hours and drug tests can no longer include nonpsychoactive cannabis metabolites.  New tests should screen for active THC (the employee is high at the moment of the test) and that is what will be required to take action.  You cannot ask applicants if they use marijuana.

Criminal background check policies have undergone substantial change as well.  If you are going to perform a background check on a potential employee the timing of that check will have to wait until the decision to hire has been made. Sound Business Insights Episode 42 - Employer Updates for 2024 part 2 continues with changes relating to healthcare workers and a new minimum wage for those workers.  These changes cover not only professionals but most employees in facilities with more than 25 physicians, even those in non-medical roles.  

It is important for all California employers to stay up-to-date with changes in the law and required updates to public notices, as well as the policies and procedures and employee handbook.  This lively discussion serves to inform employers of changes coming in the new year and how to prepare while avoiding risk, litigation, disputes and other adverse outcomes.

In Sound Business Insights Episode 41 - Employment Law Updates for 2024 (Part 1) our founder, Dan Watkins, discusses all of the important changes a San Diego or California employer must know going into 2024 and beyond.  The only constant in the life of a California employer is change.  How can you keep up with all the changes in California law as it relates to an employer?  How do you protect yourself from the increasing risks of disputes, lawsuits and class actions facing those who provide employment throughout California?

Sound Business Insights Episode 41 - Employment Law Updates for 2024 (Part 1) begins with an increase in minimum wage for California to $16.00 per hour and an exempt salary minimum of $66,560.  There have been significant changes to sick leave (we used to call this PTO) and how quickly employees must accumulate sick leave (40 hours or 5 days by the 200th calendar day of employment).  What is the new minimum accrual cap for sick leave?  What are the frontloading requirements for a San Diego or California employer and how do you make sure your sick leave policies fulfill the requirements of California law?

Sound Business Insights Episode 41 - Employment Law Updates for 2024 (Part 1) continues to discuss the requirement to notify all employees (past and present) of changes to the law regarding Non-Compete Agreements (NCAs) and how California has made NCAs not only void but illegal (exposing the employer to civil and even criminal action).  The new fast food restaurant minimum wage of $20 per hour begins April 2024.  Who does this apply to and will it affect your company?  Part 1 concludes with new requirements regarding compensation for training courses and whether or not these can be a condition of employment as well as a blockbuster development regarding retaliation: The legal presumption / burden of proof now lies against the employer in retaliation cases.  In other words, the employer is now required to prove they did NOT retaliate within 90 days of an employee engaging within a protected activity.  How does this single substantial and game-changing change affect the legal and financial risks you face as an employer?

In Episode 40 - Stock Purchase Agreements Dan Watkins discusses one of the most complex legal and financial transactions a business can undertake: a stock purchase.  What makes the stock purchase such a risk and how can the 40+ years of experience at the Watkins Firm in literally thousands of these transactions increase the likelihood of success in your acquisition or sale?

The Harvard Business Review recently cited multiple long-term collegiate studies which concluded the probability of success in a business merger or stock purchase acquisition was 30% or less.  In those transactions which were unsuccessful the target of the acquisition is either resold (at a loss) or outright closed within five years.  The Watkins Firm's track record of success is 85% to 90% in the words of Dan Watkins.  What makes the difference?

In Episode 40 - Stock Purchase Agreements we discuss the goals of the buyer and the seller and how to bring the two interests together to create a successful transaction.  What are the goals of the buyer?  The primary goal is usually to acquire the company while protecting existing relationships, revenue and goodwill through the transaction and into the future.  Taxes are a consideration for both the buyer and the seller.  The seller is obviously interested in achieving top dollar for their company and has an interest in making sure the buyer achieves their goals while the seller is either immediately or eventually free to take their earnings and move forward with their own goals and objectives.

Episode 40 - Stock purchase agreements is an insiders look at these complex business and financial transactions.  Why is due diligence the key to a stock purchase acquisition? How can the experience, proprietary due diligence checklists and contracts (such as the Letter of Intent or LOI) of the Watkins Firm increase the likelihood of success in your transaction?  How does the covenant of good faith and fair dealing apply to these transactions?  Access the insight of a business attorney with more than 40 years of experience and thousands of successful stock purchase transactions.

In Sound Business Insights Episode 39: What Keeps Employers Up at Night, Dan Watkins discusses many of the challenges a California employer faces and what our firm can do to help not only manage what is happening in real time, but to establish the right policies, processes, employee handbook and other aspects of daily documentation and work to prevent issues, disputes and lawsuits from ever arising, while making it much easier to keep small isues from expanding into large exposures.

Episode 39: What Keeps Employers Up at Night discusses the extensive challenges California employers face and perhaps the most important piece of advice we can provide to an employer: if you feel like there's something "off" or "strange" about an employee or how they're acting, you're probably right.  The best strategy is to pick up the phone and call the Watkins Firm for a free consultation to find out if there is anything that you need to be concerned about and how to handle it.

Episode 39: What Keeps Employers Up at Night discusses the types of disputes and lawsuits that an employer is likely to face, including PAGA lawsuits and class actions, and that it is often possible to substantially reduce the legal and financial risks, if not mitigate them altogether, just by having a brief conversation with the Watkins Firm.  Learn about the "secret clock" and the steps you can take as an employer to reduce your exposure to employee-related disputes and lawsuits and to keep legal and financial exposures at an absolute minimum.

In Episode 38 - What is a General Counsel Dan Watkins helps to explain why every business  should have access to an experienced business attorney - a general counsel.  If you're a company owner and you are trying to do everything right in the best way you can for your company, you're going to have general counsel, and that attorney or couple of attorneys or law firm will advise you on things that have to do with your business, your field specifically, and in general,  You'll also have a banking relationship because opportunities come along and if you wait to go get your banking relationship started, you're behind the eight ball. And also expenses happen. You need to have some kind of a flexibility there, some backup. And finally, and maybe most importantly, you'll have some type of accountant who's a professional. I'm not talking about if you're still just using a CPA or your tax person. I'm talking about how do you define what is profit? How do you define it to match what you are doing to match tax deductions, to match zoning, to match licensing, to match future sales, your exit strategy, to match all those things. How do you get your accounting? What is actually important to you? What is a real profit to you that's your professional accountant who you talk to on a monthly or quarterly basis? 

In Episode 38 - What is a General Counsel we discuss the concept of a business "coach."  Olympic athletes and professional athletes, they're the top of their game. They're rich, they're making money, they're performing at the highest level, and yet they all have a coach.  Your corporate general counsel knows you and your business.  In the case of the Watkins Firm, we've been in business for more than 40 years and have worked with literally thousands and thousands of companies of all sizes.  Odds are, we've worked with a company a lot like yours and know not only your industry but the things to watch out for, and, more importantly, the opportunities to grow and dominate.  It's the ability to pick up the phone and get a quick answer without a quick bill!  

Episode 38 - What is a General Counsel discuses every aspect of what your corporate general counsel should provide, from contracts to mergers and acquisitions to business disputes.  Employers in California face unbelievable challenges and need a lot of advice and counsel along the way.  And, if you are successful, it's not a matter of IF a dispute or lawsuit will arise, it's WHEN.  Your general counsel from the Watkins Firm is able to reesolve the vast majority of business disputes through effective leveraged negotiation.  70% or more of the remaining cases we are able to resolve by representing our clients in mediation.  We also represent clients in arbitration and at trial.

Having the Watkins Firm at your side as your general counsel gives you access to insights, counsel and proven strategies developed here in San Diego and Southern California across more than 40 years.  Learn more about why you need Dan Watkins and the Watkins Firm as your company's general counsel.

In Sound Business Insights Episode 37 - Healthcare Governance and Compliance Dan Watkins provides insight into the complicated world of corporate governance and compliance in the setting of a medical practice or healthcare-related business.  There are so many Federal and State agencies and entities that regulate, oversee or control a medical practice or healthcare business.  What are the issues any healthcare-related company will face when working on corporate governance and compliance in California?

Episode 37 - Healthcare Governance and Compliance provides an over of many of the agencies and the issues they address, and how this is different in a healthcare setting when compared to any other "normal" corporate environment.  Doctors and medical practices are told where they can get their patients from, what to do and not do (i.e. Stark Law anti-kick back regulations) and the substantial risks of penalties, fines and even licensing issues.

Episode 37 - Healthcare Governance and Compliance shares the types of compliance work required and how the Watkins Firm can contribute more than 40 years of experience to make that job simpler and to ensure governance and compliance requirements are met.  Dan Watkins even discusses the topic of "dead wood," independent contractor agreements and the role and benefits of an MSO not only to the practice but in terms of governance and compliance.

In Episode 36 – Best of Sound Business Insights Volume 1 we revisit some of the most important, insightful and entertaining moments of the podcast so far.  The episode begins with a few clips about why it is so important to have an experienced, proven business attorney.  This includes Dan’s genuine insight that any business should have 3 crucial advisors: an experienced business attorney, a CPA/Tax expert and a banker or source of funding.  These are the 3 advisors you can turn to and reply upon for a quick phone call to answer a question as well as insights into the challenges and opportunities you will face along the way.

Episode 36 – Best of Sound Business Insights Volume 1 is full of actual stories and the insights they provide as the conversation turns to one of the largest groups of clients we serve at the Watkins Firm: employers.  Dan shares his genuine belief that California is far and away the most challenging and toughest state in which to be an employer.  Dan shares the many types of challenges and regulations one faces as an employer, as well as the genuine and extensive risks of employee-related litigation and plaintiff’s lawsuits.  What are the important issues you need to address as an employer?  What are the best strategies for important documents such as the employee handbook, employment agreement and policies and procedures?  What important changes have occurred most recently in federal and state courts and how has this completely and positively changed the game for California employers (hint: big news in arbitration)?

Toward the conclusion of Episode 36 – Best of Sound Business Insights Volume 1 we speak with Katya Adams who is the Office Administrator and HR consultant for the Watkins Firm.  Katya provides insightful answers to some of the most often asked questions from clients who are employers including how to classify workers and the structure of payment.  Katya provides a few surprises including the steps required to implement a 4 day, 10 hour a day work environment.  Listen to Dan Watkins as he shares stories of real employers and learn the secret of the most important thing you can do the moment you learn about any employee-related dispute or lawsuit.  We hope you enjoy the first installment of our “Best of” series.

In Episode 35 - Crazy Things You Didn't Know Were Covered by Insurance Dan provides insight into commercial and residential insurance policies and the types of things most people wouldn't know about the denial of claims which, perhaps, should be covered.  Dan Watkins begins the episode with a bit of a lesson about a Supreme Court Justice, Learned Hand, who decided that insurance was part of the fabric of society and everyone needed to have access to insurance to prevent financial devastation.  "It is a fine art between what is possible (to be covered) and what the insurance companies will tell you."  Knowing that it "might be" covered is the advantage an attorney brings to the table.

In Episode 35 - Crazy Things You Didn't Know Were Covered by Insurance Dan provides some real world examples such as when you come home from vacation and water is running through your house.  If you submit the claim as a "plumbing leak" you will probably be denied.  Historically, a leak is maintenance item which is the responsibility of the homeowner to fix.  However, as Dan points out, if there is water everywhere the pipe must have BURST.  Because a BURSTING pipe is covered, when a leaking pipe is not.  Subtle differences between what "might be" covered and what is often denied.

Episode 35 - Crazy Things You Didn't Know Were Covered by Insurance covers a variety of terms, examples of when to call an attorney and ask for help and how the legal strategy pre-trial and during trial may actually affect whether legal fees or "Cumis Counsel" (Counsel who represents you but is paid for by the insurance company) is available.  The episode completes with a great story about a real client with a blown engine in a Jeep Cherokee just as it was coming out of warranty.  The dealer denied the warranty claim and wanted to charge $16,000 to replace the engine.  After questioning our client, Dan realized the client had seen the engine light and called to schedule an appointment but was put off for a few weeks by the dealer.  "Do you think that little computer in the Jeep might have recorded WHEN the check engine light came on and what the mileage was at that point?"  The warranty paid for the new engine.

In Sound Business Insights Episode 34 - Business Formation Dan Watkins shares from more than 40 years of experience the reason it is so important to work with an attorney during business formation if you are serious about your business.  If you don't intend to make money, you can download forms and go on the cheap.  If you intend to conduct serious business, especially if there is going to be more than one owner, the advice and counsel of an experienced business formation attorney will be extremely valuable from the outset, and during the life of your company.

In Episode 34 - Business Formation Dan discusses the reason you have a business entity in the first place: the corporate veil.  What is the corporate veil and why is this protection - the separation of the owners as individuals from the entity of the company - one of the most important issues to get right at the outset of starting your company?

Episode 34 - Business Formation covers everything from the types of business and corporate entities available in California to the differences between each type of entity and when you should consider it.  Dan discusses corporate entities for healthcare and medical practices such as the California Professional Corporation as well as the Management Service Organization or MSO.  In addition to a review of entities, Dan Watkins shares why it is so important to get the corporate documents right from the outset.  What are the Articles, the Bylaws, the Operating Agreement or Shareholders' Agreement (not to mention corporate minutes) and why are the clauses and options within these documents crucial to short and long term success?  Are you serious about business?  Disputes arise when companies make money.  If you intend to make money you should spend a few moments with one of the most experienced business attorneys in all of Southern California.

In Sound Business Insights Episode 33 - Misclassification of Independent Contractors, Dan discusses changes in California law based upon the Dynamex decision and the impact this is going to have on employers in California with independent contractors.  In this lively and candid conversation, Dan covers all of the draconian penalties which an employer will face if they misclassify a worker.

In Sound Business Insights Episode 32 - Business Fraud Dan Watkins discusses five areas of business-related fraud as well as remedies and real-life stories to illustrate appropriate examples of this complex topic.

The five types of fraud we will cover are:

Consumer Fraud

Business Fraud / Unfair Competition

Business Partner Fraud / Shareholder Fraud

Sale of Business Fraud

Criminal Fraud (Note: the Watkins Firm handles Civil Litigation)

In Sound Business Insights Episode 32 - Business Fraud Dan discusses the elements of fraud as they relate to the five separate aspects of fraud from a business perspective.  Dan discusses how he has witnessed one company take the products of another company, relabel them and then resell them.  Another example is the company who appears to be bankrupt and is closed and then six months later a couple of investors in that closed company notice their friends and co-investors are now driving new expensive cars and living in large homes.  How did this happen?  The answer is 3 of the former owners hid the success, closed the company, took the product overseas, set up a new company under a new brand and were making millions.

Dan shares another example where a group of companies are under a national umbrella and the accountant for the national entity decides to perpetrate a fraud across a period of several years.  If a group expense of, say $5000, came in (and should be divided equally between the 9 sub-companies) the account would charge each $5,000 and pocket the difference.  What outcome was Dan able to achieve for our client?  You'll have to listen to the podcast to find out!

Sound Business Insights Episode 32 - Business Fraud closes with examples of how fraudsters use the sale of a company or the acquisition of a business to commit fraud.  This inclueds the example of how a merger is a common strategy to water down or eliminate the interests of minority shareholders.

In Episode 31 - ABCs of What to Do If You are Sued Dan Watkins discusses the steps to take if you learn you have been sued (served with papers) or have heard through witnesses or other parties that a lawsuit may be coming your way.  "If you're in business, it's not really a question of if, but when your going to face a dispute and potentially a lawsuit."

The first and most obvious step is to speak with an attorney from the Watkins Firm.  We work to find out the specific details about what you know, who you heard from and then monitor Court systems so that we can inform our clients of any potential lawsuit before they are actually served.  If they've been served we work with clients to begin to assemble a chronology, a sequence of time and events which are related to the dispute at hand.  Simply put, the best chronology wins.

Episode 31 - ABCs of What to Do If You are Sued lays out the elements of the process of protecting our clients and achieving a positive outcome in their case.  The Watkins Firm is going to provide insight on how the process will work, investigate to construct a thorough chronology and supporting evidence and provide our clients with a real game plan including how long it will probably take and cost estimates.

Dan discusses, in depth, the steps of working through a business dispute.  The Watkins Firm is able to resolve the vast majority of these cases through a negotiated settlement.  This is the fastest and least expensive route to resolve a dispute or lawsuit.  Dan Discusses the venues of negotiation, mediation, arbitration and trial.

Episode 31 - ABCs of What to Do If You are Sued helps any business professional to understand the nuances of the process and how important it is to work with experienced, proven trial attorneys (even though the odds of any lawsuit reaching trial are actually quite slim).  You will hear, first hand, what the process entails, the risks of each step and valuable insights on how the Watkins Firm helps our clients to achieve the best possible outcome in their case.

In Sound Business Insights Episode 30 – Management Service Organization or MSOs Dan discusses one of the most effective ways to improve a medical practice or healthcare-related business: the Management Service Organization or MSO.  What is an MSO and how can it help a medical practice or healthcare business to improve operational profitability, increase revenues, reduce expenses, all while increasing the quality of care delivered by the practice as well as the patient experience?

Dan explains that an MSO is much like an administrator for your business.  Doctors shouldn't have to do it all, provide healthcare and run a business.  In fact, the doctor(s) can make more money, deliver better healthcare and improve patient quality experiences by allowing outside investors to bring money and business skill into the operation while keeping the MSO completely separate from the delivery of healthcare.  This avoids the "corporate practice of medicine" while allowing medical professionals to leverage the investment and skill of non-licensed professionals to grow their practice, improve their facilities, streamline operations and increase the bottom line.

An MSO must be carefully structured to comply with complex federal and California laws such as HIPAA, Stark and other regulatory requirements to separate the practice of medicine from the business side of things.  The Watkins Firm advises both medical professionals as well as MSO administrators and entrepreneurs.

Episode 29 - Recent Big News in Arbitration begins with an overview of the Supreme Court ruling in Chamber of Commerce v Bonta.  On February 15, 2023 the 9th Circuit Court of Appeals  decided that the Federal Arbitration Act (FAA) preempts California AB 51, rendering it literally unenforceable.  We, the Watkins Firm, represent employers, people who hire people.  They need to know what the law is and how this important decision changes the game.

In Episode 29 Dan lays out the need for arbitration clauses as an employer and why this important edition to an employment agreement is so important.  You'll need to update the employee manual and your policies and procedures.  The employment contract accomplishes two key things: it identifies the parameters of the experience between employee and employer, and it gives them notice of a lot of laws and things you are required to do as an employer.  Your employment contract protects you and the arbitration agreement ensures you can prevent frivolous law suits and settle disputes quickly and reasonably.

In Episode 29 Dan shares the atmosphere surround PAGA cases and plaintiff's attorneys.  He describes them as "hungry wolves" who are looking for their next meal.  You as an employer don't want to be that meal.  And when a disgruntled employee responds to their constant barrage of advertising, and the plaintiff's attorney sees the arbitration agreement, it will take all the incentive out of the case for them and the employee must resolve things in a straight forward manner with you the employer.

In Sound Business Insights Episode 28 - Common Employer Disputes and Defenses Dan Watkins shares many of the types of disputes that San Diego and Southern California employers find themselves in as well as insight into the strategies for defending them from allegations and in agency and plaintiff's lawsuits. Risks facing California employers have doubled in the past 10 years alone from Dan's perspective.  Class action lawsuits and PAGA (Private Attorneys General Act) actions which were non-existent 20 years ago are now one of the most common risks an employer faces.

"PAGA is really heating up.  There are law firms who only (handle PAGA Actions) and they just send out constant communicationsto every (type) of employe you can imagine."  PAGA actions and disputes which can develop into lawsuits which expose employers to having to pay opposing attorney's fees can take a seemingly small issue and inflame it into an extensive and expensive liability.

Dan discusses one of the most common areas of dispute, wage and hour and unpaid overtime lawsuits.  Severance pay for "wrongful termination," misclassification of exempt employees and independent contractors (1099 workers) are also prominent issues for area employers.  Sexual harassment and discrimination allegations are still a substantial risk for any employer, and the risk isn't just the allegations themselves (that are often easily dismissed) but risks associated with the failure to conduct a thorough investigation which is a separate cause of action.  Employers also face increasing risk from "informal conferences" with California Labor Board and other state and federal agencies.  An invitation to "just talk things over" quickly becomes adversarial and ultimately a "settlement conference" where the employer writes a significant check.

Dan shares the best strategy for protecting your interests as an employer - the moment you sense a potential employee dispute or you receive a communication from a lawyer or law firm seeking information about an employee or group of employees you need to immediately call the Watkins Firm.  There are steps our attorneys can guide you through which, when taken, can mitigate the damages you may face or remediate the case altogether.  There is a short period of time which can make all the difference between a small case and a substantial exposure.  Dan finishes the episode with an insightful yet humorous observation: "Call us … we'll tell you that Mole is not cancer!"

In Episode 27 - Changes in CA and Federal Law for Employers 2023 Can Watkins provides insight into how recent changes in the law will affect San Diego and Southern California employers.  The first question out of the gate is "how does an employer in San Diego get sued?" The answer is basically "by being an employer."  So the next question and discussion focuses on "So, how do you prevent or limit your exposure as an employer?"  Dan discusses the first action an employer should take the moment they think a dispute is possible, including when they receive correspondence from a law firm: "Call us.  It doesn't cost you anything and we can help you to take the immediate action necessary to either remediate the problem altogether or mitigate the damages you might face.  

Episode 27 – Changes in CA and Federal Law for Employers 2023 turns to changes regarding arbitration agreements and the impact new laws will have on PAGA disputes.  Specifics include accurate reporting of overtime on payroll stubs and reports and "when in doubt, round up."  Changes in the laws also impact an employers ability to deploy voluntary arbitration agreements but they must be meticulously crafted, presented and executed.  Dan discusses AB 701 (Quotas) and how they might affect warehouse workers, assemply lines and other types of jobs.  Meal breaks and rest breaks continue to be addressed by the Legislature - what do you need to know about changes regarding meal and rest breaks (Naranjo versus Spectrum)?  

Episode 27 – Changes in CA and Federal Law for Employers 2023 discusses changes in settlements and non-disclosure agreements and changes to drug testing and who pays for it.  Tune in for an action packed update for California employers.

In Episode 26 - Wage and Hour Employer Updates for 2023 and Beyond we are joined once again by Katya Adams, Office Administrator for the Watkins Firm.  We discuss minimum wage rates for 2023 which are $15.50 for California, $16.30 for the City and County of San Diego, as well as the new white collar exemption in California that the individual must earn $1,240 weekly or $64,480 annually.  Katya goes on to explain the types of workers which can be potentially classified as an exempt employee such as professionals, attorneys, accountants, engineers, managers, accounting managers, administrative managers, human resource managers or those who manage a pool of employees.  Katya goes on to discuss California's "De Minimous" ruling and laws governing hourly workers in 2023.  A few of the biggest changes for 2023 including the "rounding" of hours and the "Pay Transparency Act."  No more rounding when it comes to the number of hours worked, and reporting requirements for employers have changed.  This not only applies to the old FEHA reporting requirements which now will work through the California Civil Rights Department or CRD, but the way in which advertised job positions must include pay scales.  Employers must also be prepared to update the information contained within the employee's file and know that the employee has the right to inspect that file at any time, as well as request the current "pay range" for their position.  Episode 26 discusses upcoming changes to California law regarding employee marijuana use (off the clock), new federal laws regarding a "designated person" as well as changes to bereavement leave and the prevention of employer retaliation in the event of a qualified emergency condition in the workplace (which could include the home for some workers). Finally, Katya discusses the process of termination, required timing of the final check and form(s) which must be completed and given to the employee, as well as changes to the employee handbook and polices and procedures due to all of these changes.

Sound Business Insights Episode 25 - Unfair Business Practice Overview begins with Dan Watkins summarizing the types of cases which might fall under the umbrella of an unfair business practice.  Dan quips "A better question is what would not be an unfair business practice!"  It seems every business lawsuit we defend and many we initiate include allegations of unfair business practices.  Examples of an unfair business practice is attempting to gain an unfair advantage, violating someone's rights, theft, embezzlement, fraud, misuse of power, treating individuals in the same class of shareholders differently, self-dealing, and misappropriation of trade secrets.  It might surprise you to learn that employees have a duty to their employers and can commit unfair business practices against their own employer.  Trade secrets, for example, can include a customer list.  So if an employee takes your customer list and goes to a competitor (or starts their own company to compete directly) and uses your customer list it is an unfair business practice as well as misappropriation of trade secrets.  Dan Watkins often says "beware of small disputes; small disputes often become BIG disputes with substantial financial consequences."  This is due to the ability to seek attorneys fees as part of a business dispute which includes some elements of unfair business practices.  Dan notes that attorneys fees clauses are invitations to lawyers to sue.  Unfair business practice lawsuits may qualify for punitive damages up to treble the damages.  The conversation concludes with a discussion about the way these cases are generally resolved.  The Watkins Firm negotiates a settlement in the majority of their business dispute cases.  If you include mediation, that number is closer to 95% of all business dispute cases never reach arbitration or a trial.  Dan goes on to share a few stories about general circumstances surrounding real life cases our firm has been involved in with the names, facts and locations changed to "protect the innocent."  Episode 25 - Unfair Business Practice Overview is a fascinating look at many of things which can and do go wrong in business, and one of the biggest buckets of issues raised in many business lawsuits: unfair business practices.

Sound Business Insights Episode 24 - Corporate Governance addresses one of, perhaps, the most overlooked aspect of owning and running a busines: corporate governance.  Dan Watkins begins with the perspective that a corporate entity, under the law, is essential an entity of its own, like a person.  The corporation provides an important protection known as the "corporate veil."  The corporate veil is what keeps the personal assets (and liabilities) of the owner(s) of a business separate from the debts and risks associated with the businesss.  If you do not protect the corporate veil any creditor can pierce the protections of the corporation and come after it's owners personally for any debt or legal exposure associated with the company itself.  Dan explains that corporate governance is the process to maintain a corporation in a proper and legal fashion, in order to protect the company itself as well as the corporate veil.  This provides substantial benefits not only for the owner(s) of a company but in the event you wish to sell the business or merge with another entity.  Laws change every year, people change, the business changes and this is why it is important to regularly review and update the corporate documents such as an operating agreement in an LLC or the bylaws and shareholders' agreement in an S Corp or C Corp.  The conversation turns to risk management and strategic planning as well as the management of the company and it's employees.  The company must have ongoing training, updated policies and procedures and an updated employee handbook to maintain the integrity of the corporate veil.  PAGA actions have become much more common here in Southern California and the process of good corporate governance reduces the risks of all litigation, including PAGA actions.  Dan discusses the importance of corporate governance in a medical practice or healthcare-related business.  The level of complexity in these situations is raised by the requirement to fulfill all regulatory compliance in addition to corporate and employment laws.  The conversation closes with the positive impact that corporate governance can have upon the value of the company if it comes time to merge with another business or sell the corporation.

We welcome back Katya Adams, Office Administrator of the Watkins Firm, for a substantive conversation on San Diego employers and the questions they most have about managing employees in San Diego and Southern California.  The conversation begins with the documents, the framework needed to manage employees in Southern California.  This includes policies and procedures, the employee handbook and tips on what and what not to have in each.  Kat discusses the importance of consistency in how an employer manages their employees and treats each individual worker.  Katya provides insight into the question of hourly versus exempt employee status and an overview of when to classify an employee as exempt versus hourly.  This naturally leads to a discussion of overtime, the structure of work hours, modified schedules and even accessing company systems and emails off hours and on the weekends. The conversation turns to social media policies and what an employer can and can't specify as it pertains to employee posts on social media.  Katya lays out the information required on a pay stub, and the benefits of separating sick leave from Paid Time Off or PTO (Vacation) pay.  The "lightning round" covers interview questions, performance evaluation, written warnings, termination, and the ways in which Katya and the firm support our employer clients.