In today’s New York Times business section, there is an article that discusses “favorite startup tools” of entrepreneurs. It discusses tools that assist entrepreneurs with (1) testing an idea, (2) getting user feedback, (3) idea iteration, (4) email marketing, (5) analytics, (6) project management, and (7) stakeholder communication. Interestingly, many of the tools discussed are free apps or plug-ins to existing resources you are probably already using (i.e., Gmail). Overall it is an impressive list of helpful resources. You can find the article here.
I am often retained to recruit executive and professional-level employees for companies. I use a specific process that goes way beyond asking standard questions like, “What did you like about your last job?” or “Why do you want to work here?” Those questions aren’t all that helpful in determining whether a candidate “fits” well into your company’s culture generally and/or into the specific demands of the particular position. I tend to dig both broader and deeper by using open-ended questions that are better predictors of character, behavior, temperament, and personality. My clients say my process works — they learn something about themselves and their organization in the process, and the end up with a new employee who is not only competent for the job but a good “fit” into the culture and personality of the business.
This past weekend, the New York Times’ “Corner Office” feature interviewed one CEO about her smart hiring strategy. This CEO clearly gets it. Her company is smart about hiring. They don’t want just another warm body to do a job — they are focusing on culture and fit, and they have some smart strategies for assessing both. You can read the feature here.
As you know from previous posts in this blog, the choice of entity is a big question for most startups. Whether to form an C Corp, S Corp, LLC, partnership, or something else is one of the earliest — and most important — decisions an entrepreneur confronts.
There are pros and cons to each different structure, of course. In general, LLCs provide tremendous flexibility and tax advantages that are not available to corporations. However, those benefits come with some costs. And one of those costs is that LLCs cannot grant traditional “shares” of stock or “stock options” to employees. However, it is still possible for an LLC to create an employee incentive structure utilizing equity in the company. It just requires some creativity and, not surprisingly, a few extra bucks.
A couple days ago, The Venture Alley posted an excellent article discussing the various ways that an LLC can use equity to incentivize employees. The article covers profits interests, options to purchase profits interests, so-called “phantom stock”, and stock option grants from a corporate member of the LLC. These strategies can be complicated and expensive, but at least they provide the LLC with some options (no pun intended). You can find the article here.
I have been exclusively engaged by Boulettes LLC to conduct this executive search. Resumes sent to Boulettes Larder, Bouli Bar, or any of its owners or employees will be forwarded to me for review and consideration. Please read this posting carefully before applying.
Boulettes Larder is an acclaimed San Francisco restaurant and food retail business located in the iconic Ferry Building. Boulettes was founded in 2003 by Amaryll Schwertner and Lori Regis, who previously owned and operated Star’s Restaurant at Civic Center. By day, the restaurant serves breakfast and lunch from its open kitchen to a 40-60 seat dining room, while retail customers shop the larder for hard-to-find culinary ingredients. By night, Boulettes converts into an intimate space for private dinners.
Chef Schwertner and Lori began their restaurant careers 30 years ago at the forefront of what has now developed into a nationwide greenmarket movement. Along with a small group of chefs in Northern California, Chef Schwertner nurtured the efforts of farmers who were growing extraordinary quality sustainable produce which, in turn, nurtured the development of urban farmers markets. The daily changing menus at Boulettes reflects Chef Schwertner’s ongoing commitment to using conscientiously produced culinary ingredients.
Boulettes is expanding and opening Bouli Bar, a casual restaurant with full liquor license serving pizzas and flatbreads from a wood burning oven. Bouli Bar will have 49 seats and will be adjacent to Boulettes Larder. Bouli Bar is expected to open in June.
This is an excellent opportunity to join a nationally-recognized San Francisco restaurant and retail food operation and to assist its owners in the upcoming growth phase for the company. The General Manager (“GM”) will be responsible for (1) leading and managing the daily operations of the restaurant and its management team, (2) ensuring the satisfaction of guests and, ultimately, the overall profitability and success of the business, and (3) conveying to all employees and to the public the vision of the owners to manifest a viable body of work.
The Restaurant Manager, Bar Manager, and Special Events Manager (to be recruited and hired by the GM and the owners) all report to the GM. The GM reports directly to the owners. Continue reading
I have been exclusively engaged by Ford Family Law, P.C. in Oakland, CA to conduct this attorney search. Resumes sent to Ford Family Law, P.C. or any of its attorneys or employees will be forwarded to me for review and consideration.
Ford Family Law, P.C. is one of the most respected family law firms in California. The firm’s lawyers are experts in all types of family law matters, including marital dissolution, child custody, child support, spousal support, paternity, domestic partnerships, stepparent adoption, and complex property division. In addition, the firm’s founder Shane R. Ford is a Certified Family Law Specialist (CFLS) and a fellow of the American Academy of Matrimonial Lawyers (AAML) who has been named a California “Super Lawyer” every year since 2006.
This is an excellent opportunity to join a top-tier family law firm and assume immediate, meaningful responsibility. This associate will work directly with, and report to, Shane R. Ford. In addition, commensurate with background and experience, this associate will be given non-complex cases and allowed to manage them on a day-to-day basis. This associate will also be introduced to the educational and social opportunities provided by the AAML and the Association of Certified Family Law Specialists (ACFLS). Continue reading
The Department of Homeland Security (DHS) recently issued a new federal I-9 form. This is the form that all employers must use in order to verify a new employee’s eligibility to work in the United States. Employers can continue to use the old I-9 form only until May 7, 2013. After that date, the new form must be used.
All employers must complete an I-9 form for each new hire. This must be done within 3 days of hiring. As part of the process, the employer must inspect either (1) one original document chosen by the employee from List A, or (2) one original document from both List B and List C. Many employers also attach copies of the documents they inspected to their completed I-9 form, as further proof of the employer’s good faith efforts to comply with the law. The completed I-9 form should be retained for at least 3 years following an employee’s termination.
The new I-9 form can be found here.
The DHS’ new publication, entitled Handbook for Employers: Guidance for Completing Form I-9, can be found here.
On February 21, 2013, the California Court of Appeal held in Sanchez v. Swissport, Inc. held that an employer may be required to provide additional leave as a “reasonable accommodation” beyond the 4 month maximum pregnancy disability leave (“PDL”) required by California law.
The Facts of the Case
Employee Sanchez was diagnosed with a high-risk pregnancy that required bed rest. As a result, Swissport granted Ms. Sanchez a temporary leave of absence. After 19 weeks of leave, Swissport terminated Ms. Sanchez’s employment. Ms. Sanchez sued, alleging that Swissport violated the FEHA by failing to provide her with additional leave for her pregnancy-related disability.
Under California’s PDL law, an employer must grant a female employee who is “disabled by pregnancy, childbirth, or a related medical condition” a leave for a reasonable period of time, no to exceed four months and thereafter return to work. The issue in Sanchez v. Swissport was whether California’s PDL law sets the maximum amount of leave available, or whether California’s Fair Employment and Housing Act (“FEHA”) allows employees to request additional leave as a “reasonable accommodation” under disability discrimination laws.
The Court’s Decision
The Court of Appeal ruled that FEHA provides additional protections beyond California’s PDL law. The Court of Appeal concluded that Sanchez’s inability to return to work after 19 weeks of leave rendered her “disabled” under FEHA, thus requiring Swissport to grant her a reasonable accommodation of additional time off unless Swissport could show that additional leave would have imposed an undue hardship. Thus, the Court of Appeal sent the case back to the trial court for further proceedings.
Impact on California Employers
Sanchez v. Swissport sends a clear signal: employees who are disabled by pregnancy may be entitled to more time off than the 4 month maximum under California’s PDL law. When an employee is unable to return after taking her full pregnancy disability leave, an employer must continue to engage in the interactive process to determine whether a reasonable accommodation — which could include additional leave — would allow the employee eventually to perform her essential job functions without imposing an undue hardship on the employer.
The court’s opinion can be found here.
In Harris v. City of Santa Monica, the CA Supreme Court ruled that an employer could be liable under the Fair Employment and Housing Act (FEHA) if that employer took “adverse employment action” against an employee and unlawful discrimination was a “substantial factor motivating” that action. However, the Court also ruled that an employer can escape some liability if it can show that legitimate, non-discriminatory reasons would have led it to take the same action against the employee (the so-called “same decision showing”). In such a case — where an employee has shown that unlawful discrimination was the substantial factor motivating her termination, but the employer has then shown that it had legitimate non-discriminatory reasons to fire that employee anyway — the employee cannot be awarded damages, back pay, or any order of reinstatement. Instead, according to the CA Supreme Court, the employee is entitled only to an award of reasonable attorneys’ fees, court costs, and declaratory/injunctive relief, if warranted by the evidence.
Harris offers some good news for employers because it increases the standard of proof that an employee must show in mixed motive FEHA cases. Now, an employee who claims to have suffered a termination, demotion, or other adverse employment action has to show that unlawful discrimination was a substantial motivating factor in that action. In addition, after Harris an employer can raise a mixed motive defense to explicitly limit its liability under FEHA even if some discrimination was present, so long as the employer can make a same decision showing.
But Harris also offers some good news to employees, too. In many FEHA cases, attorneys’ fees are the largest part of an employee’s recovery. The Harris decision did not disturb an employee’s right to collect attorneys’ fees, even if the employer comes forward with a persuasive same decision showing. So even after Harris employers face significant exposure in FEHA cases.
The CA Supreme Court’s decision in Harris v. City of Santa Monica can be found here.
NLRB Rules Proprietary Information and Non-Disparagement Clauses in Non-Union Employment Agreement are Overbroad and Illegal
The National Labor Relations Board (NLRB) has issued another decision striking down a private, non-union employment agreement.
The Quicken Loans, Inc. Decision
In this most recent case, Quicken Loans, Inc. (Case No. 28-CA-75857), the administrative law judge ruled that Quicken violated the National Labor Relations Act (the “Act”) by maintaining “overly broad and discriminatory rules” in its non-union mortgage banker employment agreements. Specifically, the judge ruled that two sections of the employment agreements unlawfully restricted employees’ Section 7 rights under the Act:
(1) The “Proprietary/Confidential Information” section, which defined as proprietary and confidential any “non-public information related to or regarding the Company’s personnel…including personal information of co-workers…such as home phone numbers, cell phone numbers, addresses, and email addresses.” This section was illegal because it could “reasonably tend to chill” an employee’s Section 7 rights by prohibiting that employee from discussing his or her wages, benefits, and/or working conditions with other employees.
(2) the “Non-Disparagement” section, which prohibited employees from publicly “criticizing, ridiculing, disparaging, or defaming Quicken or its products, services, policies, directors, officers, shareholders, or employees, with or through any written or oral communication or image.” This section was illegal because it also infringed on employees’ Section 7 rights. According to the judge, “employees are allowed to criticize their employer and its products” as part of their Section 7 rights, and “employees sometimes do so in appealing to the public, or to their fellow employees, in order to gain their support.” Continue reading
On November 30, 2012, the Office of Administrative Law approved the Fair Employment and Housing Commission’s (FEHC’s) new disability regulations. The new regulations state explicitly that the focus under California law is now whether employers “have provided reasonable accommodation to applicants and employees with disabilities, whether all parties have complied with their obligation to engage in the interactive process, and whether discrimination has occurred.” According to the FEHC, the focus is not on “whether the individual meets the definition of disability” because that “should not require extensive analysis.” These new regulations, which become effective on December 30, 2012 and impact all California employers with 5 or more employees, include the following highlights:
1. Expanded Definition of “Disability”
California law prohibits an employer from discriminating on the basis of an employee’s actual or perceived disability. A disability is a physical or mental impairment that limits a major life activity. The new regulations make clear that the definition of “disability” shall be given the broadest — that is, the most employee-friendly — meaning possible.
The new regulations also give numerous examples of specific mental and physical “impairments” that qualify. For example, a “mental disability” exists if an employee has an actual or perceived emotional or mental illness, intellectual or cognitive disability, organic brain syndrome, autism, special education or learning disabilities, schizophrenia, and/or chronic or episodic conditions (such as clinical depression, bipolar disorder, post- traumatic stress disorder, and/or obsessive compulsive disorder). A “physical disability” exists if an employee is or perceived to be deaf or blind, has or is perceived to have partially or completely missing limbs, uses of a wheelchair, has or is perceived to have cerebral palsy, and/or has or is perceived to have other chronic or episodic conditions (such as HIV/AIDS, epilepsy, hepatitis, diabetes, seizure disorder, multiple sclerosis, and/or heart disease). However, conditions that are mild and do not limit a major life activity are not considered “disabilities.” Examples include the common cold, flu, minor cuts, sprains, muscle aches, non-migraine headaches, and/or bruises.
The new regulations also make clear that the definition of “major life activities” must also be construed broadly. A “major life activity” includes mental, physical, and social activities, particularly those that affect one’s employability or that present major obstacles to employment advancement. Examples include caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, and working.
2. Burden of Proof
The new regulations make clear that the employee need not prove that his/her disability was the sole or primary cause of the employer’s actions. Instead, the employee need only prove that the his/her disability was “one of the factors that influenced the employer.”
3. Reasonable Accommodations
Under California law, employers have an “affirmative duty” to make reasonable accommodations for the known disability of any employee or applicant, unless the employer can demonstrate, after engaging in the interactive process, that doing so would pose an undue hardship. The new regulations provide a long list of examples of “reasonable accommodations,” including such things as permitting an employee to work from home, “job restructuring,” and modifying “supervisory methods.” Employers must consider all possible accommodations except ones that create an undue hardship. Employers must also consider the preference of the employee or applicant; however, employers maintain the ultimate right to select and implement an alternate accommodation so long as it is effective. Continue reading
Following the CA Supreme Court’s long-awaited decision in Brinker last year, which I blogged about here, California’s lower courts were left to resolve the numerous meal and rest break cases that were ordered held pending the resolution of Brinker. Two of these cases received an extraordinary amount of press coverage, and both were ultimately decided in favor of California employers. Those cases are Lamps Plus Overtime Cases, 209 Cal.App.4th 35 (2012) and Hernandez v. Chipotle Mexican Grill, Inc., 208 Cal.App.4th 1487 (2012). In both cases, the appellate courts denied class certification on the plaintiffs’ meal break claims and cited Brinker in support of that outcome.
Following these rulings, the plaintiffs in both cases petitioned for review to the CA Supreme Court. Yesterday, the CA Supreme Court denied review — which left the outcome of both cases undisturbed. However, the CA Supreme Court ordered both cases depublished. This is clear signal that the CA Supreme Court does not find the rationale from Lamps Plus Overtime Cases or Hernandez v. Chipotle Mexican Grill, Inc. to be legally correct. Moreover, because both cases have been depublished, employers and their attorneys can no longer rely on these cases as binding authority in California. This effectively removes two weapons that were in California employers’ arsenal when confronted with costly class action lawsuits.