With the emergence of technology in the workplace, electronically stored information ("ESI") has become an important source of discovery in almost every business dispute. In turn, a company's duty to preserve ESI has come to play an increasingly critical role in litigation. This is especially true considering that stiff sanctions may be ordered against a company which fails to take reasonable steps to preserve its ESI.

Traditionally, corporations have conducted business with one purpose in mind - to make money. In fact, corporate directors have a fiduciary duty to shareholders to make decisions aimed at maximizing profits. If a director, no matter how worthy his or her intentions, puts a societal objective before shareholder returns, he or she faces potential liability for breach of fiduciary duty.

Recently, Governor Brown signed into law multiple bills that will have an impact on California employers. One of the most significant soon-to-be laws is summarized below.

Text messaging is rapidly becoming one of the most popular means of communication - for both personal and business purposes. Not surprisingly, text messages are emerging as critical evidence in a variety of lawsuits. Although often thought of as evidence in just criminal investigations (e.g., Kobe Bryant's sexual assault case), the use of text messages can also be key in civil lawsuits.

Any business that has been forced to file or defend a lawsuit knows that the location of the lawsuit has a profound impact on the case. Having to litigate in a state or county other than where your business is located causes many concerns.

In Sullivan v. Oracle Corp., plaintiffs Donald Sullivan, Deanna Evich and Richard Burkow worked as "instructors" for Oracle, a company headquartered in California. While employed by Oracle, Sullivan and Evich resided in Colorado and Burkow resided in Arizona. The three employees worked primarily in their home states, although they worked in California and other states on occasion.

Like it or not, online reviews have a major impact on today's businesses - especially small businesses relying on word of mouth to promote their products. Just as easily as rave reviews can kick start a company, offensive reviews can destroy a company's reputation. Knowing how to handle this type of reputational harm is becoming a key to success for any business.

Colorado Court Dismisses Case for Lack of Jurisdiction

NB's clients, a California corporation and two of its principals, were sued in Denver, Colorado by a Colorado corporation alleging that NB's clients stole "trade secret" information. While NB's clients certainly had substantive defenses to the claims, NB believed the Colorado court did not have "personal jurisdiction" over NB's clients.

Complete Victory After Bench Trial, Contractor Hit With Punitive Damages 

NB's client started up a limited liability company to completely remodel an existing apartment complex. After running into a number of snags along the way, the general contractor hired to complete the remodel made off with the construction drawings and permits, leaving the project unfinished and in severe debt and leaving NB's client in a lurch.

Has a competitor ever demanded that you not hire its former employee? Did you know that honoring a non-compete agreement could subject your company to liability? Nowadays in California, both former and prospective employers must be well versed in the law of non-compete agreements or risk facing legal action.

Under California law, employers have an independent duty to promptly and thoroughly investigate and take reasonable steps to prevent and remedy harassment and discrimination. When companies fail to handle discrimination and harassment claims properly, it can cost them big. Ultimately, an improperly handled claim can result in the employer being held liable for its supervisors' or employees' misconduct.

Jury Awards Entire "Removal and Replacement" Damages

NB's clients paid over $100,000 for 14 Italian steel windows for their custom house in Poway. Within a few months of installation, the windows began to leak. The window retailer made several attempts to repair the windows but refused to replace them. NB sued the retailer for breach of the implied warranty of "merchantability."

A writ of attachment is a prejudgment remedy that allows a creditor (plaintiff) to obtain a lien on the debtor's assets until final adjudication of the claim sued upon. In essence, a writ of attachment permits an unsecured creditor to become a secured creditor, gaining priority over defendant's other creditors. It is a powerful litigation tool which can facilitate a prompt settlement and assure the ability to collect on an eventual judgment.

With the cost of litigation today, the reality is that many claims, no matter how clear cut, may not be worth pursuing after comparing the cost of enforcing the claim to the potential recovery.

Labeling your workers as "independent contractors" may seem an appealing way to avoid certain operating costs, but many employers do not realize the dangers associated with misclassifying employees to save a few dollars in the short term.

Also Recover Judgment for Defense Costs from Co-Defendant

Following an assault at a parking lot in downtown San Diego, NB's client - the operator of the parking lot, faced the potential of extensive tort liability.  NB's client was sued under the theories of negligence and premises liability.

The Department of Industrial Relations, Division of Labor Standards Enforcement ("DLSE") publishes a web site which contains a variety of useful and accurate information for California employers and employees.  However, blind faith in the information published on this site may prove imprudent and costly to California employers.

California businesses know that litigating a dispute through trial can be time-consuming and expensive.  Even a relatively straightforward case can take over a year and cost tens of thousands of dollars.  In response to the increasing cost of litigation, many businesses began requiring that all disputes be submitted to binding arbitration.

Are you sure your employee payment policies and record keeping are compliant with California's complex labor laws?  Are you willing to bet your business on it?  Because with the significant potential fines, penalties, and costs the Division of Labor Standards Enforcement ("DLSE") can impose on your business for even the smallest, most innocent payroll mistakes or misunderstandings, that is exactly what you could be doing.

In Forecast Homes, Inc. v. Steadfast Ins., a homebuilder ("Forecast") retained several subcontractors to perform portions of work at a residential project. As part of the subcontractor agreements, Forecast required the subcontractors to add Forecast as an additional insured on their commercial general liability policies.