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Managers of Bankrupt Corporation Sued For Unpaid Wages
In Boucher v. Shaw, the Ninth Circuit Court of Appeals held that managers could be sued under the Fair Labor Standards Act even though the corporation had filed for bankruptcy protection. In Boucher, former employees and their union filed a class action against three managers after The Castaways Hotel, Casino and Bowling Center filed for bankruptcy protection. The employees sought unpaid wages under Nevada law and the FLSA.
Federal Minimum Wage Increases & New Poster Required
The federal minimum wage increased to $7.25 on Friday, July 24, 2009. The Fair Labor Standars Act sets the minimum amount that employees working in the United States can be paid. States, like California, are free to set higher standards. With this change, employees who are covered by the FLSA will be entitled to be paid no less than $7.25 per hour. A revised Federal minimum wage poster is now available for viewing, downloading, and posting. Every employer of employees subject to the Fair Labor Standard Act’s minimum wage provisions must post, and keep posted, a notice explaining the Act in a conspicuous place in all of their establishments so as to permit employees to readily read it.
Starbucks Tip-Pooling Plan OK
Shift supervisors at Starbucks are now able to receive tips! A judge previously awarded $86 million in restitution to a class of Starbucks baristas on the grounds that Starbucks's policy permitting shift supervisors to share in tips that customers place in a collective tip box violated the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200) based on a violation of Labor Code section 351.
Starbucks appealed the decision and, in a somewhat surprising decision, the fourth appellate district concluded that Starbucks's tip-allocation policy did not violate California law.
In the past weeks we have detailed several employment arbitration agreements that California courts have refused to enforce (see "Another Employment Arbitration Agreement Unenforceable"and "Court Strikes Another Arbitration Agreement"). In a somewhat surprising decision the Second Appellate District held that an an employment application that contained an arbitration agreement was not rendered one-sided by the use of the phrase “I agree.”
Understanding the Essential Elements of a Series LLC and its Benefits.
A Series LLC is a new form of LLC that may be formed under the laws of some states. A Series LLC is a master LLC with separate units (series) operating independently of the master LLC. California law does not allow for a Series LLC to be formed in California. However, a Series LLC that is formed under the laws of another state may register with the California Secretary of State and transact business in California.
Key Features.
Each unit has its own owners (members) and may be managed separately from the master LLC and other units.
Each unit must maintain separate books and records.
As with a regularly formed LLC, the owners (members) of each unit are not financially responsible for the unit's debts and obligations.
A unit may conduct part of the business of the master Series LLC, or may conduct a wholly different business.
Each unit has its own assets and liabilities. The members of each unit are treated under the laws of the state where the Series LLC is formed as owning an interest in only that unit, and have no rights as members of one unit in the assets or income of any other unit.
Each unit is liable only for its own debts and obligations. In general, creditors of one unit may only reach the assets of that unit.
Further Considerations.
Currently, the Internal Revenue Service has not stated whether a unit within a Series LLC is a separate entity from the Series LLC for tax purposes. The Franchise Tax Board has taken the position that if each unit has the features listed above under the laws of the state where the Series LLC was formed, then each unit will be treated as a separate entity for filing and tax purposes. In that case, the same filing guidelines and estimated taxes that apply to a regular LLC will apply to each unit of a Series LLC.
Forming a Series LLC may have additional costs of administration, therefore evaluating your business goals should be analyzed carefully before selecting the Series LLC in California.
An Employer's Liability is Not Endless
A California Appellate Court concluded that an employer is not responsible when a former employee causes the death of a customer two years after the employment relationship ended. In Phillips v. TLC Plumbing, Inc., the court held that an employer owed a former customer no duty of care as to post-termination tortious conduct of a former employee.
Your Tax Liability after a Foreclosure, Short Sale, or Debt Cancellation
Summary of the Mortgage Forgiveness Debt Relief Act of 2007 and its exclusions.
In 2007 the Federal Government passed the Mortgage Forgiveness and Debt Relief Act of 2007, providing for relief to many whose homes have been foreclosed and mortgage debts cancelled for the period between 2007-2010.
Another Employment Arbitration Agreement Unenforceable
In Franco v. Athens Disposal Company, Inc. an appellate court refused to enforce an employee arbitration agreement that barred both class arbitration and the employee’s prosecution of civil remedies under the Private Attorney General Act.
American Recovery and Reinvestment Act's Impact on COBRA requirements.
On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (ARRI).While the ARRI is intended to stimulate the economy, it also makes important changes to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
COBRA requires employer-provided group health plans to offer individuals who would otherwise lose their group health plan coverage as a result of a termination or other qualifying event the opportunity to continue their group
