I remember going the the ABA’s employment law boondoggle in 2010. Occasionally, I like to get my law geek on.
On the second day, I attended a panel session on emerging sex discrimination issues. One of the panel lawyers was a transgender woman. We were discussing the difference between sex and gender.
In brief, sex is the state of your genitalia (which is no longer entirely dictated by chromosomes). Gender is what you feel inside.
At that moment, I realized that the sex and gender discrimination laws do not specify that they only protect people born one sex or another.
And there is no place where this was going to be a bigger problem than the bathroom. (Edit: Since writing and publishing this blog in 2015, this has come true.)
I started imagining scenarios where a person in the middle of a sex-transition would have to reassign bathrooms. I could see situations where the women might object, or claim to feel unsafe or sexually harassed. (Edit: This has happened now.)
I could see situations where the transgender person would claim to be harassed, rejected or cat-called by male co-workers, and that becoming a sexual harassment case. (Edit: This has happened now.)
I could see situation where an employer, struggling to make everyone happy, makes no one happy. Perhaps the employer makes a third bathroom for the transgender employee, and that person feels singled out as a result.
The relative population of transgender people is small. But recent publicity regarding their civil rights has expanded the law.
For example, the EEOC ruled in June 2015 that a transgender person has a right to use the bathroom that is consistent with their expressed identity. Policies otherwise are discriminatory and prohibited under Title VII. The EEOC’s position is a harbinger of where the law will go either by courts or Congress.
Sex reassignment surgery is none of the employer’s business, so a person can state their preferred gender and the employer must allow for it, without inquiring as to the state of their genitalia.
There will undoubtedly be other employees who will feel uncomfortable about this. It is fairly predictable that there will be women who feel threatened by a biological man (sex) who identifies as a woman (gender) entering the woman’s bathroom.
It is also predictable that this will create religious accommodation issues. Some religions are stricter about segregation between the sexes than others.
Who knew the potty was so complicated?
As usual, the employer is caught in betwixt and between competing human interests. So what do you do?
Well, at this point, the employer should allow people to use the bathroom of their choice. So the employer is going to have to come up with additional accommodations to avoid religious or sexual harassment allegations.
One such accommodation would be to create a third bathroom that anyone who wishes to be “private” can use. Or get rid of segregation of the bathrooms altogether if that is possible.
For many offices, changing the bathroom construction just won’t be practical. For those employers, you will have to counsel people to get along and navigate disputes through diplomacy. Sometimes you will have to tell an employee to accept the use of the bathroom by a transgender person and to work around it.
The employer should not (and in most cases cannot) challenge someone’s stated gender identity and must treat them accordingly, no matter how it competes with the rights, interests and sensibilities of other employees.
We can all argue about whether this is fair or not. But it’s the facts. On balance, it is much more likely that the transgender person will be the harassed rather than the harasser. So balance your policies towards accommodating the transgender person. And respond carefully to all allegations of harassment or predatory behavior.
Eric is really angry. Less than a year ago, he started a business with four guys he knew from friends of friends. They shared the dream of opening a sports bar dedicated to soccer that would serve international beer and bar food.
They found the perfect spot and signed a lease. Eric personally guarateed the lease and put $30,000 down for a deposit. He paid for all the kitchen equipment and hired a contractor to bring the building to code.
His partners (they were all equal according to the one page document he typed up) chipped in for a little while. One brought in some TVs. Another bought some beer and tended bar sometimes. Another pitched in a few thousand dollars to buy some advertising to announce their grand opening.
After a month, the first partner was run out by Eric after taking cash from the till. He never came back.
Then one of the partners got sued for pinching the waitresses. Eric became embroiled because they were not a registered partnership or corporation.
Six months in, Eric ran out of savings before the bar started turning a profit and he got behind on rent. He asked the third partner for money. Instead, the third partner took all the TVs and left.
The waitresses quit because they were paid late. There was no cash for food or beer. And the landlord said that Eric was personally responsible for the five year lease — a debt of $250,000 at least.
After a few more months of barely scraping buy, Eric closes the doors to his dream bar. And the landlord sues.
Although this is a fictional story, I get a call from someone like Eric at least once a month. The details vary, of course. But the story is more or less the same: an erstwhile entrepreneur gets burned by less-than-honest partners or landlords and now has major problems. He’s broke, depressed and ruined.
It’s a really depressing story for an optimistic entrepreneur like me. But sadly, 80% of businesses fail within their first year. And the blow up is usually spectacularly devasting for an owner like Eric.
I am CONVINCED that many businesses would not fail if they had simply started off right. New business owners make a lot of the same mistakes that lead to failure. These include:
Not organizing legally, following ALL the steps necessary (e.g. just filing an LLC is not good enough)
Failing to keep professional accounting records from Day 1 and getting into tax problems
Not having good contracts with business partners and investors (this is one of the biggest mistakes)
Getting stuck in a bad commercial lease
Not having adequate resources to deal with all the things a new business must do because of lack of planning or education, which destroys cash flow because of constant traps and problems
Failing to follow good employment and pay practices from Day 1
Underestimating what starting and running a successful business takes
Eric didn’t call me before starting his business. If he had, I would’ve given him my ebook, How to Start A Business… Legally: A Quick and Easy Checklist.
I cannot stress this enough. Getting set up right and under the guidance of someone who has started or help start many businesses will save you thousands of dolalrs and help prevent failure.
Someone like Eric spends $100,000 to open his bar, only to crash and burn in just a few months. Now he’s liable for another $250,000 just with a broken lease…. There are still employee liabilities and taxes to deal with (and that’s if the partners all just disappear). His legal fees with me are going to be a minimum of $50,000. Alternatively, he will bankrupt and lose everything.
In a more perfect universe, Eric would have come to me a year ago. He would have hired me for between $5000 and $18000 and I would’ve helped him set up everything and given him the benefit of my years experience in business start ups.
He would’ve avoided the bad partners, the bad lease, the sexual harassment lawsuit and the waitresses quitting.
He also would have been on track to avoid the plethora of other problems that come from starting a business.
And then his $100,000 investment would not have been such a hopeless risk!
If I practiced law just for money, I would rather have people like Eric pay me $50,000 or more to pick up the broken pieces of their dreams and help them move on.
But I’d rather more small businesses be successful. And the odds of that are much improved when you invest in the foundation when you start up.
Last December, the license plates were stolen off my company car in San Diego. As I was in Saint Louis, I requested replacement plates by mail. But the DMV rejected my request because I did not send the original title. This was pretty frustrating because, when I bought the car in 2013, I sent in the original title with a request for transfer to my name. The DMV sent me back a photocopy of the title and then refused to register the car because all I had was a photocopy of the title. It took me a full year to get the car registered. I still haven’t received the title.
When my request was rejected, I knew that I would have to personally go to the DMV to try to get plates.
When I arrived back in San Diego, my imagination started to run. I worried that they would not help me and that I would waste days at the DMV filling out forms. I worried that I would never get the title and could never sell the car. I worried that I would have to take legal action to get the title. I worried that the car would get impounded for not having plates and that I would lose it or have to pay thousands to get it released. I worried that I would go to the DMV and have a frustration meltdown with the clerk and get arrested.
So I avoided it. It took me three weeks to go to the DMV. In the meantime, my staff was driving around without plates. And I was very aware of how dumb and risky that is.
Everyone indulges in avoidance behavior. It happens all the time.
The phone rings and you know it is someone calling about a bill you forgot to pay. You avoid the call because you have no good answer for the person on the other end of the phone. Maybe you ordered some inventory based upon a purchase order and your customer reneged. Now you owe for the inventory and your cash flow doesn’t support paying the bill.
Or maybe you are waiting for a check from your biggest client and, once it comes in, you can pay the bill that’s been sitting on your desk for two months. So you don’t take that phone call because you don’t want to have the difficult conversation.
Here’s another common scenario: You receive a letter from a lawyer or a government agency. You open the letter and it’s bad news. They want something. Usually it’s money. You don’t reply to the letter because you don’t know what to say. Then you ignore all the letters that follow. Or maybe you don’t open any of them at all, and send them straight to the trash can.
This behavior is dangerous.
Because, most of the time, these situations do not resolve through lack of action.
In fact, ignoring phone calls and letters can lead to horrible and unnecessary consequences. Ignoring letters from lawyers and governmental agencies can lead to loss of money, loss of your business, and, in a few rare instances, loss of your freedom. That’s why you need to be proactive in handling difficult conversations related to business activities.
If funds are short, accommodations can almost always be made between parties. If performance is the issue, discussing the barriers will help everyone understand the reality. This is always better than waiting to “see what happens.” If there is some other issue, a conversation at least brings peace of mind.
The thing to remember is: Everyone has been in your shoes.
If you have a difficult time thinking about responding to a notice because you are clearly in the wrong, you must realize everyone makes mistakes. Mistakes can be fixed, but you have to face them. The person on the other end of the phone or the writer of that letter has probably been in the same (or a similar position) in his career.
Don’t let your thoughts carry you away to the worst-case scenario.
The worst-case scenario rarely happens. When I mustered my courage and went to the DMV, for example, the clerk said, “you must be very frustrated,” fixed the problem, and gave me new plates, all within 30 minutes. I suffered from all those anxieties for nothing! I felt both silly and relieved.
And in my many years of practice, I have never had a situation spiral to the “worst-case scenario” once I got involved. When you face things and proactively deal with them, usually the worst-case doesn’t happen.
If you are concerned about the worst possible outcome, call me and we can discuss possible responses.
In many cases, I can teach you what to say and how to say it. Or I can speak for you. I can also help you with a follow-up letter to a business demand that will keep your relationship in tact and offer you relief.
In some cases, (like a letter from a governmental agency) any response you provide can be used against you. Those are times you definitely want me to help out.
No matter what, ignoring the problem will only make it worse.
Always take action to resolve the problem. You will feel relieved when you do!
CALIFORNIA DIVISION OF LABOR STANDARDS ENFORCEMENT (DLSE) CLAIMS
The DLSE: Employee Complaints and Workplace Discrimination
In addition to maintaining supervisory authority over labor standards and the issuance of permits and certification, the DLSE is also the California government agency before which employees can file claims against their current or former employer. Employees are permitted to seek wages and penalties for up to three years back from the filing date of the claim. Such claims typically include, but are not limited to, the following matters:
The DLSE also doubles as the California version of the federal Equal Employment Opportunity Commission (EEOC). Disgruntled employees can and will file discrimination complaints with the DLSE, including but not limited to complaints involving:
Employees often choose to file a claim with the DLSE, as it is cheaper and faster than filing a lawsuit in Superior Court. Additionally, the DLSE will help employees with their claims, so employees may not need to retain a California labor law attorney.
The DLSE also handles retaliation complaints, in which a former employee alleges that his or her employer took any improper actions in response to the employee’s conduct. Employer conduct which potentially constitutes retaliation includes firing, suspending, demoting, or otherwise disciplining an employee because the employee gave information to a government agency or “blew the whistle” on workplace conditions, alleged wage violations, and so forth.
Employees generally have up to six months to file a retaliation claim, counting down from the date the violation supposedly occurred. However, complaints involving certain Health and Safety Code violations must be filed within 90 days, while complaints pertaining to certain parts of the Labor Code may be filed up to a full year after the incident.
If your business is on the receiving end of one of these complaints, be prepared to commit to a time-consuming process. Unfortunately, the procedures through which the DLSE handles the former employee’s case are quite lengthy, sometimes taking up to nine months. Working with an attorney can help to keep the process as streamlined and time-efficient as possible.
The DLSE has prosecutorial powers over businesses it believes are violating the California Labor Code — as well as the ability to award extensive penalties and pursue judgments on employees’ behalves. Having an experienced employment law attorney on your side can increase your business’ chances of obtaining the desired outcome while protecting your company’s bottom line and professional reputation.
Commercial Lawyers for Business Defense
Bellatrix PC has helped a number of California business entities fight DLSE claims against former employees. While it is often best to negotiate toward a mutually agreeable settlement during the DLSE conference, Bellatrix PC is prepared to see the claim through to the end, including prepping and representing your business at the DLSE hearing (trial) before the Labor Commissioner.
In addition to handling litigation matters, an experienced commercial attorney from Bellatrix PC can handle all of your business’ day-to-day legal needs. By establishing an ongoing relationship with our firm, we can act as outsourced general counsel for all of your company’s legal questions and regulatory concerns. Establishing a relationship with experienced counsel can ensure that when an issue or lawsuit arises, your company will know where to turn for dependable legal advice.
To begin discussing your compliance or regulatory concerns in a confidential legal consultation, call our law offices today at (800) 449-8992. Ask about our Business Risk Review and address simmering issues before they explode and take the business with it.
In 2002, Congress passed a law known as the Sarbanes-Oxley Act, or SOX. SOX applies to both publicly- and privately-held companies, and imposes a rigid list of corporate best practices in an effort to deter acts of fraud. Companies who violate these standards risk exposure to a long list of civil and criminal penalties, as well as investment and loan denials. In short, failure to adhere to the provisions supplied by SOX presents allegedly non-compliant corporations with a battery of devastating legal and financial problems.
Whether your business needs experienced legal representation to challenge claims of non-compliance, or you are simply unsure whether your current practices align with SOX best practices and would like a closer review of your policies, the knowledgeable employment attorneys of Bellatrix PC are here to help. Our business risk review will identify and improve upon vulnerable areas in your employment and record-keeping policies to better protect you against legal claims in the future. If your organization has already been targeted by a lawsuit, our aggressive commercial litigation lawyers will prepare tactical defense strategies to protect your company’s best interests.
To arrange for a private legal consultation, call Bellatrix PC right away at (800) 449-8992.
What is Sarbanes-Oxley in Employment Law?
In response to the controversial and heavily publicized Enron and WorldCom bankruptcies, Congress passed the Sarbanes-Oxley Act into law in July of 2002. This act, which was quickly nicknamed “SOX,” is also known as the Public Company Accounting Reform and Investor Protection Act, or the Corporate and Auditing Accountability and Responsibility Act. These names provide a good idea of SOX’s general purpose.
The act has two primary objectives:
To deter and punish corporate fraud, accounting fraud, and acts of corruption among corporate executives.
To protect whistleblowers in whistleblower lawsuits, making the destruction of evidence and impeding federal civil investigations a crime.
It is crucially important for business owners to know that, contrary to common misconceptions, this act applies to privately held companies — not just publicly-traded companies. This means private companies may not destroy evidence or interfere with federal civil investigations by agencies such as OSHA, the EEOC, or the IRS, which implicates employment law. SOX also imposes specific restrictions on private placement securities solicitations, which is particularly important if you or your organization is raising capital from investors. Private companies must demonstrate full compliance with SOX before going public.
Sarbanes-Oxley also establishes corporate “best practices,” which include:
Establishing business policies and codes of ethics.
Monitoring conflicts of interest.
Establishing independent directors on the Board of Directors where appropriate.
Civil and Criminal Penalties for Violating SOX Best Practices
It is critically important for employers and business owners to note that the best practices delineated by Sarbanes-Oxley are not merely recommendations. On the contrary, failure to comply can result in a variety of debilitating civil and even criminal penalties being imposed on non-compliant companies. For example, depending on the severity of the offense, a maximum prison sentence can range from 20 to 25 years: nearly three decades of incarceration.
It is also important to remember that, in addition to the formal civil and/or criminal penalties imposed by judges or regulatory agencies, organizations which fail to comply with SOX best practices are often highly unappealing to lenders, venture capitalists, and other investors. If your company’s practices are deemed to be unethical, unsound, or otherwise fall short of the act’s requirements, the likely result is the denial of a loan or investment, or ongoing investor disputes. In other words, the negative financial consequences of non-compliance extend far beyond fines and penalties imposed by the government: they extend to your business opportunities and daily operations as well.
Finally, because SOX provides whistleblower protection provisions, a whistleblower whose rights are violated may seek special damages, back pay, reinstatement, and attorneys’ fees.
Contact Our Business Attorneys
SOX convictions can devastate even the most stable and robust of corporations. If you are at all concerned that your current employment or accounting practices are not in alignment with SOX provisions, it is absolutely crucial that you take immediate action to address the issue now before it is already too late. Failure to resolve legitimate concerns at the outset only increases the likelihood that costly, disruptive, and time-consuming litigation will arise in the future, draining your financial resources and damaging your organization’s reputation as a trustworthy and ethical business.
Let our team help yours. To start discussing your organization’s legal situation in a completely private consultation, call the experienced Sarbanes-Oxley lawyers of Bellatrix PC at (800) 449-8992 today.
The term “whistleblower” is defined as a person who reports illegal activity, fraud against the government, or other wrongdoing within a company, state agency, or organization. A federal law, called the False Claims Act, allows employees and other whistleblowers to bring a qui tam suit in the name of all taxpayers against companies who have overbilled or defrauded the federal government.
A state-level law, called the California False Claims Act, also encourages state employees and other whistleblowers to combat fraud and illegal activity by bringing claims against companies engaged in wrongdoing. If the whistleblower’s accusations are found to have merit by the government, and the company is subsequently charged, the whistleblower will receive statutory rewards for their courage in combating fraud against the government.
At Bellatrix PC, our experienced business lawyers are committed to defending entities accused of engaging in fraud, overbilling, and other wrongful financial and legal acts. Our legal team balances aggressive client advocacy with strict compliance with all pertinent state and federal laws, and is dedicated to assisting businesses of all structures and sizes. We will walk you through the nuances of the allegations against your entity, devise comprehensive defense strategies, and help your business explore its legal options for resolving the situation as rapidly, efficiently, and cost-effectively as possible.
To start discussing your goals in a completely confidential legal consultation, call Bellatrix PC today at (800) 449-8992.
Whistleblower Confidentiality Under California Law
The plaintiffs in whistleblower lawsuits, or qui tam lawsuits, are often referred to as “relators.” The California Whistleblower Protection Act, which protects the identity of relators, also authorizes the California State Auditor to accept complaints from both California employees and members of the general public who wish to confidentially report unlawful and unethical conduct.
Like the identity of the original relator, the confidentiality of these supplemental complaints is closely guarded. With a few special exceptions for law enforcement agencies conducting criminal investigations, complainants’ identities may not be revealed unless the complainant him- or herself grants permission for disclosure.
What Does the False Claims Act Prohibit?
The False Claims Act prohibits numerous types of fraudulent conduct, with some of the more common examples of prohibited acts including but not limited to:
A small business supplying false “minority-owned” certification, with the intention of securing additional government contracts, when the purportedly “minority-owned” business is in fact neither owned nor operated by a minority.
A healthcare professional billing Medicaid and/or Medicare for medical procedures, such as surgeries or examinations, which were never actually conducted. Medicare fraud is a widespread problem throughout the United States, with the Office of Management and Budget estimating nearly $48 billion in improper Medicare payments in 2010.
A government contractor falsely claiming compliance with federal safety regulations, such as those imposed by the Occupational Safety and Health Administratin (OSHA), when the pertinent regulations were in fact disregarded by the contractor.
A pharmaceutical company which encourages doctors and other healthcare professionals to prescribe patients drugs for uses which have not been approved by the Food and Drug Administration. This tactic is commonly referred to as “off-label” marketing.
Furthermore, California Labor Code Section 1102.5 provides several additional protections for individual employees. Pursuant to Section 1102.5:
(a) Employers are prohibited from creating, adopting, or enforcing any rules, regulations, or policies which would prevent an employees from whistleblowing, provided the employee in question has “reasonable cause” to believe that the information he or she is providing relates to a violation of state or federal laws or regulations.
(b) Employers are prohibited from retaliating against whistleblower employees. Once again, this provision is contingent upon the employee’s “reasonable cause” in believing that a violation or act of noncompliance has occurred or is occurring.
(c) Similarly to the provision of subdivision (b), employers are also prohibited from retaliating against employees who refuse to participate in illegal, unlawful, and unethical acts which violate state or federal laws or regulations.
(d) Employers may not retaliate against an employee for having exercised his or her rights under subdivision (a), (b), or (c) in any former employment.
(e) A report made by an employee of a government agency to his or her employer is a disclosure of information to a government or law enforcement agency pursuant to subdivisions (a) and (b).
Section 1102.5 is designed to protect California whistleblowers’ legal rights. Employers who violate this statute may be subject to civil penalties, as well as additional damages stemming from lawsuits, couched as retaliation, in violation of public policy or wrongful termination in violation of public policy claims.
Contact Our Business Attorneys
If your company has been charged with committing fraud or other violations of the False Claims Act, the California Whistleblowers Protection Act, or Section 1102.5 of the California Labor Code, it is a serious matter which demands immediate attention from an experienced legal professional.
The employment law attorneys of Bellatrix PC represent entities of all structures and sizes, ranging from small start-ups to large and firmly established corporations, and are prepared to handle even highly complex multi-party litigation cases. Don’t wait until it’s already too late to address your legal issue: call the law offices of Bellatrix PC today at (800) 449-8992.
Maybe We Can Help. Request Your Consultation Today.
Alicia I. Dearn is the founder of Bellatrix PC, a woman-owned law firm with offices in Missouri and California. Bellatrix PC handles lawsuits and business transactions. We advise in business, employment, real estate, intellectual property, civil litigation, and election law.
The articles published by Bellatrix PC are for informational purposes only and do not constitute legal advice. If you have a legal issue, please get competent advice from a licensed attorney in your jurisdiction. Use of Bellatrix PC's site is subject to our Attorney Advertising Disclaimers.