Business Law Journal

In Techno Lite, Inc. v. Emcod, LLC, the California Court of Appeal recently affirmed the finding that an employee can be liable for fraud when said employee violates his promise not to compete with his employer while still employed.  Though public policy in California places strict limitations on non-compete agreements after an employee has left employment, this shield was never meant to become a sword by which an employee could undermine his employer with impunity even before his employment ends.

Several recent decisions have addressed the applicability of California Code of Civil Procedure § 425.16, known colloquially as the “anti-SLAPP” law, which provides a procedure by which a defendant can secure the early dismissal of lawsuits that are filed primarily to discourage the free exercise of speech and petition rights.  Under the anti-SLAPP law, defendants are permitted to file a special motion to strike claims “arising from any act…in furtherance of that person’s right of petition or free speech.” 

The California Supreme Court recently issued the latest in a series of decisions concerning the applicability of Code of Civil Procedure § 425.16 (the “anti-SLAPP law”), which was designed to enable early dismissal of lawsuits that are filed primarily to discourage the free exercise of speech and petition rights. 

In Golden v. California Emergency Physicians Medical Group, et al., a divided Ninth Circuit panel held that a settlement agreement between a doctor and his former employer violated Cal. Prof. & Bus. Code § 16600 because a “no re-hire” provision of the agreement placed a “restraint of a substantial character” on the doctor’s medical practice.

Many employers outsource some or all of their payroll and related tax duties to third party payroll service providers.  These related tax duties may include withholding, reporting, and paying over certain employment (i.e. FICA, Medicare, SDI) and income taxes to the Internal Revenue Service (IRS) and California Employment Development Department (EDD).

Recently, both the Internal Revenue Service (IRS) and California Franchise Tax Board (FTB) have issued news releases encouraging taxpayers to plan ahead and to withhold the correct amount of taxes from their paychecks in 2018 to account for recent changes in federal tax law. 

On February 23, 2018, California’s Fourth Appellate District held an employment agreement between a staffing firm and a truck driver was governed by California law and not by the Federal Arbitration Act. 

Worker classification is an ongoing issue for most employers. Unfortunately, misclassification of workers can result in substantial liability for employers, with such liability arising in many different ways.