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Browse below for news, legal insights, information on presentations and events, and other resources from the Weintraub Tobin legal team.

WT Deals: Jennifer Fox to Write and Direct Film Adaptation for “The Other Dr. Gilmore”

Published: June 30, 2020

Tara Sattler negotiated the rights for Emmy nominated director Jennifer Fox to write and direct the film adaptation for The Other Dr. Gilmore. The story includes important social issues that are relevant to today such as universal healthcare, mental health care, and how lack of these resources can contribute to mass incarceration. The film will be developed and produced by Concordia Studio, along with Social Construct Films and Maven Screen Media.

For more details, read the full article in Deadline.

Tara Sattler and Jessica R. Corpuz Selected for Inclusion in 2020 Southern California Super Lawyers® Rising Star List

Published: June 9, 2020

Los Angeles, CA (June 9, 2020) – Weintraub Tobin, a leading California full-service law firm, is pleased to announce that Tara Sattler and Jessica Rankin Corpuz have been recognized as 2020 Southern California Rising Stars. To be eligible for inclusion in this list, candidates must be 40 or younger or have been in practice for less than 10 years. Each year Super Lawyers selects only 2.5 percent of lawyers in California for this honor.

Tara is a shareholder in the firm’s Entertainment & Media group. Tara specializes in representing production companies, producers, financiers and content creators in the film, television and digital spaces. Her expertise encompasses all of the phases of development, financing, production, and distribution of scripted and non-scripted content for all budget levels.

Jessica is an associate in the firm’s Litigation Group. Experienced in handling complex business and commercial disputes, she has also handled intellectual property, fraud, business tort, and contract matters in both federal and state courts. Jessica has been engaged in high-stakes litigation in multiple jurisdictions, representing both plaintiffs and defendants.

Super Lawyers recognizes outstanding attorneys who have attained a high degree of peer recognition and professional achievement in more than 70 practice areas. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.

Webinar: Staffing Your Restaurant for Reopening

Published: May 5, 2020

Attorneys Lukas Clary and Shauna Correia are presenting a webinar hosted by the California Restaurant Association to help restaurant owners prepare for reopening.

As restaurants look forward to how their businesses will operate with limited service or hours, they will need to evaluate staffing needs and determine essential employees, as well as understand rights and risk factors for reassigning employees’ duties, reducing employee hours or wages, bringing back furloughed employees, or laying off or continuing to furlough employees.

Date/Time:
Friday, May 8
9:30 AM – 10:30 AM PST

This webinar is a no-cost event and is available for both CRA members and nonmembers to attend.

Registration:
For more information or to register, please click here.

WT Deals: Steve Conrad Slated to Write Film for Paramount Pictures About Nigerian Refugee Chess Prodigy

Published: April 28, 2020

Todd Stern’s client Steven Conrad has been engaged by Paramount Pictures to write and executive produce a film about a Nigerian family who fled their home country seeking asylum in New York and their 8 year-old son who won the New York State Chess Championship in 2019. Trevor Noah will produce the drama through his Day Zero Productions banner along with State Street Pictures’ George Tillman Jr. and Bob Teitel.

For more details, read the full article in Variety.

Weintraub Attorney Jo Dale Carothers Named to San Diego Super Lawyers® 2020 List

Published: April 15, 2020

SAN DIEGO, CA (April 10, 2020) – Weintraub Tobin, a leading California full-service law firm, is pleased to announce that Jo Dale Carothers, Ph.D.  is a 2020 San Diego Super Lawyers honoree.

Jo Dale Carothers is a shareholder and chair of the firm’s Intellectual Property Group. Her practice emphasizes intellectual property litigation, licensing, contract disputes, and issues related to proceeding before the United States Patent and Trademark Office (UPSPTO) in all fields. She has represented companies in litigation in numerous federal district courts and state courts across the country, the Federal Circuit Court of Appeals, and in Section 337 investigations in the United States international Trade Commission (ITC). Jo Dale is an in-demand speaker and panelist on IP topics and a frequent contributor to the Intellectual Property Law Blog.

Super Lawyers recognizes outstanding attorneys who have attained a high degree of peer recognition and professional achievement in more than 70 practice areas. Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor.  The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.

Small Business Provisions of CARES Act

Published: March 28, 2020

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act).

There is no shortage of coverage and commentary on the CARES Act, so we are focusing here on provisions most likely to provide immediate cash flow to small and medium-sized businesses.

I. Lending Programs

a.       Paycheck Protection Program (PPP) and Loan Forgiveness.

The CARES Act creates the PPP which allows the Small Business Administration (SBA) to provide $349,000,000 of federally backed loans to eligible businesses.  The SBA must issue regulations regarding the PPP within 15 days after the enactment of the CARES Act.  More details:

1.      Timing.  The loans can be made through June 30, 2020.

2.      Lenders.  The loans will be made by lenders under Section 7(a) of the SBA and other designated lenders.  Borrowers should reach out to their normal banking contacts as a first point of contact.

3.      Eligible Borrowers.  Businesses, self-employed individuals, independent contractors and non-profits with less than 500 employees as well as certain businesses in the accommodation or food services industries with multiple locations if no one location employs 500 employees are eligible.

4.      Forgiveness/Repayment.  The loans are eligible for forgiveness.  Any unforgiven amount will be repayable within 10 years, with optional payment deferral lasting between 6 months and 1 year.

i.       PPP loans can be forgiven (and excluded from gross income) if the loan proceeds are used for the following purposes during the eight-week period following loan origination (the “covered period”): payroll costs (i.e., payroll costs for employees up to $100,000 per employee on annualized basis), mortgage interest payments, rent, and utility payments.

ii.      If the borrower reduces salaries or its number of employees during the covered period (i.e., the eight-week period following loan origination), then the forgivable loan amount is reduced proportionately:

1.      A reduction in the number of employees will be determined by comparing the average number of full-time equivalent employees (FTEEs) per month during the covered period to (ii) either (at the borrower’s election):

a.       The average number of FTEEs per month employed from February 15, 2019 to June 30, 2019, or

b.      The average number of FTEEs per month employed from January 1, 2020 until February 29, 2020, or

c.       For seasonal employers, the average number of FTEEs per month employed from February 15, 2019 until June 30, 2019.

2.      Only reductions in wages in excess of 25% of an employee’s salary or wages during the employee’s most recent full quarter of employment before the covered period are considered.  Additionally, employees receiving compensation in excess of $100,000 are excluded.

iii.      If you have already reduced salaries or workforce, you can rehire employees or end salary reductions before June 30, 2020 and receive full loan forgiveness.

iv.       The SBA must issue guidance and regulations regarding PPP loan forgiveness within 30 days after the enactment of the CARES Act.

5.      Other Loan Terms.  The loans bear interest at a maximum rate of 4%, have no pre-payment penalty, and require no personal guarantees or collateral.  If borrowers use the loan proceeds for the intended purposes, the SBA will have no recourse against the borrower.

6.      Required Certifications.  Borrowers must certify, among other things, that current economic conditions make the loan necessary, and that the loan proceeds will be used to retain workers and maintain payroll, or make mortgage payments, lease payments, or utility payments.

7.      Maximum Loan Amount.  Each loan is capped at the lesser of (i) $10 million or:

i.      The average total monthly payroll costs incurred in the one-year period before the loan is made (or for seasonal employers the average monthly payroll costs for the 12 weeks beginning on February 15, 2019, or from March 1 to June 30, 2019) multiplied by 2.5, plus the outstanding amount of any SBA Disaster Loans received this year, or

ii.      Upon request by an applying business that was not in business during the period from February 15 to June 30, 2019, the average total monthly payroll payments from January 1 to February 29, 2020, multiplied by 2.5, plus the outstanding amount of any SBA Disaster Loans received this year.

b.      Economic Stabilization to Distressed Industries.

1.      Overview.  Title IV of the CARES Act provides $500 billion for loans, loan guarantees, and other investments to support states, municipalities, and “eligible businesses” (i.e., any air carrier or U.S. business that has not otherwise received adequate economic relief in the form of loans or loan guarantees).  Out of such amount, $454 billion is designated for loans, loan guarantees, and other investments in Federal Reserve programs or facilities to support to eligible businesses, states, and municipalities.  Such “programs and facilities” include the Primary Market Corporate Credit Facility (PMCCF), the Secondary Market Corporate Credit Facility (SMCCF) and the Term Asset-Backed Securities Loan Facility (TALF).  The remainder of the $500 billion amount is designated for air carriers specifically ($25 billion), cargo air carriers ($4 billion), and businesses critical to national security ($17 billion).

2.      Mid-Sized Business Lending Facility.  Title IV of the CARES Act requires the Treasury Secretary to endeavor to seek the implementation of a federal loan program or facility that provides financing to banks and other lenders that make direct loans to eligible businesses including, nonprofit organizations, with between 500 and 10,000 employees.  More details:

i.      Maximum annual interest rates will be 2%, and for the first 6 months of the loans (or for such longer period as the Treasury Secretary may determine) no principal or interest will be due or payable.

ii.       Borrowers must certify that:

1.      Due to economic conditions the loan is necessary to support the recipient’s operations,

2.      The funds will be used to retain at least 90% of the recipient’s workforce, at full compensation and benefits, until September 30, 2020,

3.      The recipient intends to restore at least 90% of its workforce that existed as of February 1, 2020, and to restore all compensation and benefits to its workers no later than four months after the termination date of the public health emergency declared by the Secretary of Health and Human Services on January 31, 2020 relating to COVID-19,

4.      The recipient is an entity or business domiciled in the United States with significant operations and employees located in the United States,

5.      The recipient is not a debtor in bankruptcy proceedings,

6.      The recipient will not outsource or offshore jobs through the period ending two years after repayment of the loan,

7.      The recipient will not abrogate existing collective bargaining agreements through the period ending two years after repayment of the loan, and

8.      The recipient will remain neutral in any union organizing effort for the term of the loan.

iii.       Through the period ending one year following repayment of the loan, the recipient must comply with the following limitations on compensation:

1.      With respect to employees whose total compensation exceeded $425,000 in 2019 the borrower cannot: (i) pay compensation in any 12 consecutive months exceeding their total 2019 compensation and (ii) make severance payments or other benefits upon termination that exceeds twice the total 2019 compensation amount;

2.      With respect to officers or employees whose total 2019 compensation exceeded $3 million, the borrower cannot pay total compensation in excess of $3 million plus 50% of the excess over $3 million of that person’s total 2019 compensation.

iv.      Also through the period ending one year following repayment of the loan, the recipient must not (i) buy back any of its (or any parent company’s) stock that is listed on a national securities exchange, except to the extent required under a contractual obligation that is in effect as of the date of enactment of the CARES Act or (ii) pay dividends or make other capital distributions with respect to the common stock of the business.

3.      Main Street Lending Facility. The Federal Reserve will establish a Main Street Business Lending Program to support small and mid-sized businesses, complementing efforts by the SBA.  We will provide additional information when it becomes available.

II. Tax Relief

a.       Net Operating Loss Carrybacks.  When a taxpayers’ total deductions exceed its gross income, the taxpayer has a Net Operating Loss (or NOL).   Taxpayers who incurred NOLs in tax years 2018 and 2019 were not permitted to carryback those losses to generate a refund of taxes previously paid.  The CARES Act will provide taxpayers a 5-year carryback of NOLs incurred in 2018, 2019 or 2020.  Accordingly, if your business generated an NOL in 2018 or 2019 and had earned taxable income in prior years, you may be able to amend your tax returns and receive an immediate tax refund.  Similarly, any 2020 NOL can be used to generate a refund of prior year taxes when tax returns are filed next year.

b.      Retail Glitch / Qualified Improvement Property Fix.  “Qualified Improvement Property” is essentially any improvement made to an existing non-residential building. The 2017 Tax Cuts and Jobs Act inadvertently eliminated bonus depreciation for Qualified Improvement Property.  The CARES Act includes a technical correction reinstating the bonus depreciation deduction for taxpayers effective as of tax year 2018.  Taxpayers can immediately amend their 2018 and/or file 2019 tax returns and claim these additional deductions to produce a tax refund.  According to the Wall Street Journal, this provision could deliver as much as $30 billion dollars in tax refunds to restaurateurs, retailers, and hoteliers.

c.       Employee Retention Tax Credits.  Eligible employers will receive a refundable credit against payroll taxes. To be eligible, the employer must have (i) had its business operations fully or partially suspended by governmental order or (ii) suffered a 50% reduction in year-over-year gross receipts (comparing calendar quarters).  The credit can be as much as $5,000 per employee.  This credit cannot be used by certain SBA loan recipients.

d.      Deferral of Employer’s Share of Payroll Taxes.  Employers and self-employed individuals will be permitted to defer payment of the employer share of social security taxes for the remainder of the year.  One-half of deferred payroll taxes must be paid the end of 2021 and the remainder must be paid by the end of 2022.  Recipients of loan forgiveness under the SBA PPP loan program will not be permitted to defer payment of payroll taxes.

e.       Losses incurred by Owners of Pass-through Entities.  Owners of businesses operated through pass-through entities can use an uncapped amount of losses from those entities to offset personal non-business income through 2021. Taxpayers who incurred significant business losses in 2018 or 2019 which they were previously unable to offset against capital gains and other non-business income can file amended returns to claim refunds.

f.       Modification of Limitation on Business Interest.  Current tax law limits taxpayers’ interest expense deduction to 30% of adjusted taxable income.  The CARES Act will increase this deduction for tax years 2019 and 2020 to 50% of adjusted taxable income.

g.      Retirement Plans.  Taxpayers with certain retirement plans may withdraw up to $100,000 free of 10% early withdrawal penalties.  Ordinary income taxes payable with respect to any distributions can be paid over a three-year period.  Alternatively, the taxpayer can repay the distribution within a three-year period.

If you have questions about this overview or how the CARES Act might impact your business, please contact Jim Clarke at (916) 558-6084.

COVID-19: Resources for California Employers (Updated 4/3/20)

Published: March 24, 2020

by Meagan D. Bainbridge
The Labor & Employment Law Blog

The COVID-19 pandemic is forcing employers to make unprecedented decisions about their workplace. In an effort to help employers as they make the difficult decisions they are currently facing, we have gathered guidance released by many of the federal and state agencies specifically related to COVID-19. We hope this page is useful resource. That being said, this is a rapidly changing area of law, and new guidance is being implemented on what seems like a daily basis. As such, we recommend employers consult with counsel for the latest developments, including prior to taking any actions.

State of California and City/County Orders:

As we have previously told you here  and here, both the State of California and many cities and counties throughout the state have issued shelter-in-place orders. While the city and county orders may not loosen the State’s Order, they may be more restrictive. While not an exhaustive list, you can find many of those Orders and Directives below:

Department of Labor:

On March 18, 2020, Congress passed the Families First Coronavirus Response Act (“FFCRA”). The President quickly signed it into law on the same day. The Act provides paid sick time and expands the Family and Medical Leave Act to provide an extended period of unpaid or partially paid leave for qualifying reasons related to the COVID-19 public health emergency. Our previous blog post summarizing the FFCRA can be found here.

The DOL has issued a FAQ for the FFCRA. This Q&A page answers common questions to the Act (including which employers are subject to the FFCRA and calculating pay for purposes of complying with the FFCRA, such as computing hours for part-time employees and including overtime for full-time employees), and specifies that it applies to leave taken between April 1, 2020 and December 31, 2020. Please see here,  here, here and here for blog posts discussing the guidance. The DOL has also released a webinar providing information regarding the FFCRA for both employers and employees, which can be accessed here. Accompanying Power Point slides can be accessed here.

On March 25, 2020, the DOL released the Notice to employees regarding the FFCRA. Employers will be required to post this notice wherever it posts its other required notices, as well as distribute it to its remote employees. The Notice can be found here and a FAQ related to the Notice here. A blog post discussing this Notice can be found here.

On April 1, 2020, the DOL announced the issuance of its Temporary Rules regarding implementation of the FFCRA and what employers who are subject to it must do to ensure compliance. The Rules can be found here. A blog post discussing the Temporary Rules can be found here.

Coronavirus Aid, Relief, and Economic Safety (CARES) Act:

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Safety (CARES) Act was signed into law. Among other things, the CARES Act significantly expands unemployment benefits, offers loan support to small businesses, and provides for refundable payroll tax credits. Our blog post discussing the CARES Act can be found here.

Centers for Disease Control and Prevention (CDC):

The CDC has issued the following guidance for businesses responding to the COVID-19 pandemic here. The CDC website contains a wealth of information pertaining to the disease, its symptoms, and other similar information which can be found here. Guidance on when a person with COVID-19 may discontinue home isolation and return to work can be found here.

California Labor Commissioner:

Employees may be eligible to use paid sick leave under state and local law. California’s Labor Commissioner has issued an FAQ on California’s paid sick leave law during the COVID-19 pandemic.

California WARN Act:

On March 17, 2020, Governor Gavin Newsom issued an Executive Order suspending the 60-day notice requirement of Cal-WARN for employers who meet certain requirements. Specifically, in order to be relieved of the Cal-WARN notice requirements, employers considering mass layoffs must give the required notices with as much notice as practical, and for all written notices after March 17, 2020 California employers must also include the following statement (in addition to the other required language): “If you have lost your job or been laid off temporarily, you may be eligible for Unemployment Insurance (UI). More information on UI and other resources available for workers is available at labor.ca.gov/coronavirus2019.” More information regarding the Executive Order N-31-20 can be found here.

Department of Fair Employment and Housing (DFEH):

The DFEH issued an FAQ related to COVID-19. In it, the DFEH encourages California employers to follow the CDC guidelines, and follows many of the EEOC’s guidelines for dealing with the COVID-19 pandemic. This includes permitting employers to ask employees with COVID-19 to leave work, permitting employers to ask employees if they are experiencing symptoms of COVID-19, and conducting temperature checks for the purpose of evaluating the risk a particular employee may present to the workplace. It further reminds employers that all health information must be kept confidential, and provides guidance for employers as to evaluating requests for leave under the California Family Rights Act (CFRA) and as a reasonable accommodation.

Department of Homeland Security (DHS):

The Department of Homeland Security (DHS) has announced that, in light of the shift to a remoted workplace, it provide some flexibility with respect to Employment Verification (Form I-9) regulations. In doing so the DHS is permitting employers to inspect Section 2 documents remotely, as well as to retain copies of those documents. The announcement can be found here.

Department of Treasury (DOT), Internal Revenue Service (IRS), and Department of Labor (DOL):

On March 20, 2020, the Department of Treasury, IRS, and Department of Labor announced plans to provide some relief for small and midsize employers in light of the recently passed Families First Coronavirus Response Act. Specifically, it was announced that employers will have access to refundable payroll tax credits designed to provide reimbursement for the cost of providing COVID-19 related leave to their employees. The full announcement can be found here.

On March 31, 2020, the IRS issued 66 FAQs providing guidance to employers in connection with the payment of, and tax credits for, emergency paid sick leave (E-PSL) and emergency FMLA leave (E-FMLA) under the Families First Coronavirus Response Act (“FFCRA”).  Our blog post discussing those FAQ’s can be found here.

Employment Development Department (EDD):

The California Employment Development Department has released FAQ’s designed to help employers and employees determine what benefits and programs might be available as a result to job loss related to COVID-19.

The Equal Employment Opportunity Commission (EEOC):

The EEOC issued updated its guidance to help aid employers determine what actions may be taken during the pandemic, without violating the Americans with Disabilities Act (ADA) or the Rehabilitation Act, considering the COVID-19 epidemic. This guidance makes clear that the ADA and Rehabilitation Act do not interfere with or prevent employers from following the guidance of the CDC or other public health authorities. That guidance can be found here.

Federal Motor Carrier Safety Administration (FMCSA):

On March 18, 2020, the U.S. Department of Transportation’s Federal Motor Carrier and Safety Administration issued an emergency declaration, which broadened federal exemptions from compliance with certain driver safety regulations for interstate commerce, including the federal Hours of Service regulations. Information regarding this emergency declaration can be found here.

U.S. Department of Health and Human Services (HHS):

On March 28, 2020, the Office for Civil Rights of the HHS released a bulletin reminding employers of their obligations despite the pandemic. This followed their earlier bulletin  confirming that HIPAA still applies despite the pandemic.

Occupational Safety and Health Administration (OSHA):

Employers have an obligation under the Occupational Safety and Health Administration (“OSHA”) to keep its workplace free from a hazard where: (1) the hazard is recognized; (2) the hazard was likely to cause death or serious physical harm; and (3) the hazard could feasibly be corrected. (See 29 U.S.C. § 654(a)(1).) This applies to COVID-19 in the workplace. Similarly, the California Occupational Health and Safety Administration (“Cal/OSHA”) protects employees from working conditions that could pose an imminent danger to employees. OSHA has instructed employees to follow the U.S. Centers for Disease Control and Prevention (“CDC”) interim guidance with respect to responding to the threat of COVID-19.  That guidance can be found here. Cal/OSHA has published its own set of guidelines, which can be found here.

U.S. State Department:

The Department of State has issued a “Level 4” travel advisory, advising all American citizens to refrain from international traveling due to the COVID-19 outbreak. That advisory can be found here.

Office of Federal Contract Compliance (“OFCCP”):

The OFCCP has granted a three-month, national interest exemption and waiver from AAP obligations for new federal contracts “entered into specifically to provide Coronavirus relief.” This “exemption and waiver extends to all affirmative action obligations of supply and service and construction contracts, and other obligations as specified in” FAR clauses 52.222-26 (EEO-Executive Order 11246); 52.222.35 (veterans); and, 52.222-36 (individuals with disabilities). More information about this waiver can be found here.

San Francisco, Office of Labor Standards Enforcement (OLSE):

On March 24, 2020, the San Francisco Office of Labor Standards Enforcement issued guidance regarding use of COVID-19-related paid sick leave as used by San Francisco employees. That guidance can be found here, and a blog post discussing the OLSE guidance can be found here.

The attorneys at Weintraub Tobin are available to assist you as you evaluate the difficult decisions that employers throughout the state are being faced with.  Please reach out to the Weintraub Tobin attorney you regularly work with, or to any of the attorneys in the Labor and Employment Group.

California Governor Newsom Issues Statewide Stay at Home Order

Published: March 20, 2020

by Lizbeth (Beth) V. West
The Labor & Employment Law Blog

On March 19, 2020 Governor Newsom issued a statewide stay at home Order that will remain in place until further notice. To view or download a copy of Executive Order 33-20, click here. The Order directs all residents in the State of California to stay home unless necessary to maintain the continuity of operations of federally recognized critical infrastructure sectors.  To determine what infrastructure sectors are critical, the Governor refers to the U.S. Homeland Security CISA website. There are 16 critical infrastructure sectors (industries) listed by the CISA as critical to the United States: chemical; commercial (which could potentially be broadly interpreted to cover many businesses); communication; critical manufacturing; dams; defense; emergency services; energy; financial; food and agriculture; government; healthcare and public health; IT; nuclear waste; transportation; and water and wastewater.  Governor Newsom’s Order expressly states that he may designate other sectors as critical to protect the public health and safety.

The CISA list of critical infrastructure sectors is a guide to help state and local governments make decisions.  Ultimately it is up to the respective governmental body to make the decisions as to what it will deem critical. However, the CISA advises that when trying to determine whether a business or service is critical, “the focus during this response is maintaining the businesses and services that enable continued economic and social vitality. It is not focused on maintaining business as usual nor is it trying to sustain the operating capacity of non-critical businesses and industries.“

Combining the shelter-in-place orders issued by various counties with this state-wide order, businesses are advised to evaluate whether or not they fit within a critical infrastructure sector and take all appropriate steps to comply with local county orders and this new state order.  The attorneys at Weintraub Tobin are available to assist in this evaluation and compliance analysis.  Feel free to reach out to the Weintraub Tobin attorney you regularly work with, or to any of the attorneys in the Labor and Employment Group. We wish you and yours the best through these very difficult and uncertain times.

For more information on determining critical infrastructure workers, see our March 21 post:

Governor Newsom’s Statewide Order is in Place So Now, How Do Businesses Identify Essential Critical Infrastructure Workers?