SEPTEMBER 2017 BOTTLED BUSINESS SENSE NEWSLETTER: Practical Business tips for the Protection and Prosperity of the Business Owner and Entrepreneur.

NEW Bottled Business Sense Newsletter: September 2017--Covering all Business-related entrepreneurial concerns, including helpful articles in the areas of Asset and Estate Protection Planning, Employment Law and General Business Issues and Contracts. SEPTEMBER ISSUE PUBLISHED BEGINNING: 9/15/2017

*FEATURE ARTICLE: PERSONAL PRIVACY VERSUS ASSET PRIVACY- A UNIQUE PERSPECTIVE THAT WILL SURPRISE YOU

Privacy is a big topic and it’s not just about being careful with whom you share your personal information. There are a lot of tricks and techniques out there that we can learn and implement. However, it can also be overwhelming trying to ‘hide’ our personal information in this day and age of technology, if not futile. It’s difficult to determine which strategies work and are worth the effort. The important point to make in this short article is that we need to understand what we are trying to protect, and then be targeted and exact in our privacy protection strategies.

https://bottledbusinesssense.com/assetprotection/

See also: https://businessassetprotection365.com/ https://wfblegalconsulting.com/

*EMPLOYMENT LAW: 1099 CONSULTANTS AND EMPLOYMENT

A 1099 consultant is an outside contractor who works under contract for a company. Running a 1099 consulting company means you receive annual tax forms from various contracts listing the amount of money they paid you that year. While your clients do not take taxes out of your pay, they do report your 1099 earnings to the IRS. Your clients are required to send you a 1099 when you earn $600 or more in a year.

Visit: https://wfblegalconsulting.com

https://bottledbusinesssense.com/employment-law/

*ESTATE PLANNING: PREMARITAL AGREEMENTS AND ESTATE PLANNING: TWIN STRATEGIES FOR PROTECTING CHILDREN AND BUSINESSES FROM THE RISKS OF DIVORCE

Multi-generational businesses and closely held corporations are the lifeblood of the economy. Those who have ownership interests in these entities, particularly founders, become concerned about what will happen if their partners or co-owners end up in marriages that end in divorce. The most obvious tool that is typically recommended to give some measure of protection is a pre-nuptial agreement. However, when the co-owner is a family member, particularly a child or grandchild, professionals advising these families should consider the alternative or additional use of trust planning to accomplish some of the same goals.

https://bottledbusinesssense.com/estate-planning/

See also: NEW site at: https://www.protectyourestate365.com

*GENERAL BUSINESS: IS YOUR BUSINESS IN COMPLIANCE WITH STATE LAW?

While not the most glamorous aspect of running a business, complying with applicable rules and regulations is a must. Business compliance (known as “corporate compliance” for incorporated businesses) is critical for keeping your company in good standing with your state. The specifics of what you need to pay attention to depend on the legal structure of your company and where you’re registered to operate your business. The compliance requirements Limited Liability Companies (LLCs) and Corporations must meet can vary from state to state (and sometimes even from one municipality to another). I recommend you contact your lawyer and your accounting professional to make sure you understand what you need to do to stay compliant.

Read Article Here: https://bottledbusinesssense.com/general-business/

*COMMON SENSE OPTIONS: CAN A SPOUSE BE HELD LIABLE FOR THE DEBTS OF THE OTHER?

The question of whether a spouse can be held liable for the debts of the other spouse is often asked from married (or to be married) couples, but the answer is not uniform and depends largely on the laws of the state where you reside.

Read Article Here: https://bottledbusinesssense.com/sensible-options/

*MONTHLY POST: WHAT IS A NONJUDICIAL SETTLEMENT AGREEMENT?

A powerful tool for amending or repairing irrevocable trusts is the binding nonjudicial settlement agreement (NJSA). Most irrevocable trusts do not provide for the amending of trust terms except in instances where modification is necessary to comply with the tax code or other specified laws. However, there are two methods for repairing irrevocable trusts which most states recognize; one is decanting and the other is the binding NJSA. (Decanting is discussed specifically in a previous issue of this newsletter)

Learn more here.......https://bottledbusinesssense.com/

*PLUS: MONTHLY QUESTIONS FROM BUSINESS OWNERS and EMPLOYEES: Every month I receive questions from concerned business owners, employees and/or clients, concerning the three areas of business law in which I practice: (1) Asset Protection; (2) Estate Planning; and (3) Employment Law and Litigation. Read some of this month's inquiries with my response to each below:

1. What is the proper protocol to firing a new employee?

This employee has displayed subpar performance since the second week of work. Here's a list of violations she has committed over the course of the week. She came in late last week on Monday because of her college construction. She did not call, she texted that she would be late. During the course of this week, my lobby was incredibly loud where I had to step out and control the lobby and regain control of the learners. She was on her phone during one shift this past week on Friday. She's violated dress code by wearing open toe shoes when I clearly stated closed toe shoes only. She did not get the proper forms handed out to parents and employees which resulted in a slew of confusion. All in all, this is my current woe of an "office manager". I know California has strict employment laws and I want to ensure that I am in compliance to release her and move on.

ANSWER:

Let's talk generally about the dress code first, remembering that without a discriminatory or contractual basis, termination is at-will in Ca.

Under California law, an employer can impose a dress code policy as long as it does not impinge upon employee rights under the California Fair Employment and Housing Act (FEHA). As with other workplace rules and policies, an employer can fire you for violating the employee dress code. However, there are times that an employer cannot discriminate against or fire you when a dress code violation is related to your membership of a protected class (e.g. religion, sex, gender identity, disability, etc).

For example, California law prohibits employers from enforcing the following common types of dress code and grooming policies in the workplace:

*Banning employees of one gender from wearing pants (e.g. requiring women to wear skirts or dresses).

*Requiring employees of just one gender to wear uniforms.

*Banning transgender employees from dressing as or taking on the appearance of the gender with which they most identify.

*Requiring disabled employees to wear certain attire or uniforms. This can constitute disability discrimination if the uniform or attire makes it more difficult for the disabled employee to move around or perform work tasks.

*Forcing employees to be clean-shaven which can discriminate against certain religions or nationalities.

*Forcing employees to cover tattoos or piercings if they are related to a religious belief.

*Forcing employees to have short hair which can discriminate against certain religions.

Dress code and appearance policies in the California workplace must be written and specific. If an employer enforces a dress code, it must also be applied in a nondiscriminatory way. An employer should always use discretion and consider California's reasonable accommodation laws when dealing with dress code violations that may be protected under California law.

The above said, a short statement indicating that it is no longer in the best interest of the company to continue the employment relationship suffices. Nothing more needs to be said to the employee. In my experience, in many situations such as the one you describe, any explanation of why an employee is being terminated leads to further questions and the employee is not likely to believe what the employer is stating in any event. Rather, the employee is already starting to determine whether sufficient information exists to file for unemployment benefits as well as to determine whether the employer is firing them for “cause” or as a pretext for some other impermissible reason. It is also considered good practice to have the employee’s direct supervisor be the one to inform the employee of the termination, and have a member of the company’s management team or human resources department present as well. This will demonstrate that the decision was made collectively, rather than by an individual, but nevertheless with input and approval of someone who has firsthand knowledge of the employee’s job performance. It will also allow for witness preservation down the line if necessary. I would also document everything that occurred and again, keep it brief.

Remember, the procedure described is used absent contractual requirements requiring termination for good cause; discriminatory animus; and any potential claims for retaliation.

2. Is it illegal to fire a person while out on medical leave?

I had been working for the company for 4 months when I hurt my back at home carrying water. My back injury was not work related. Three weeks into my recover, I was sent a letter explaining I was being let go for poor sales performance. The letter stated that my sales closures were below 20%. The prior month my sales were below 20% along with other sales consultants. No one was fired at that time for sales closures below 20%.

ANSWER:

An employee cannot be terminated because of medical leave or because of an underlying disability.

Employment, in the absence of an employment contract, is known as at will. (In this context, an employment contract includes a collective bargaining or union agreement, too.) That means that an employee may be terminated for any reason that is not illegal, at any time, without notice. Very few reasons for termination are specifically made illegal, the main ones are:

--No termination because of discrimination against a protected group. Some examples are age discrimination (over 40), race, religion, sex, or most significantly for this purpose, disability. Employers are required to make “reasonable accommodations"to allow disabled employs to work, though employers are not required to take unreasonable steps, such as inventing a job for someone who cannot do any positions the company needs.

--No termination for using a legally protected right or filing a legally protected claim, such as by taking medical leave under the federal or California Family and Medical Leave Acts (FMLA) or (CFRA) respectively.

The above said: Requests for leaves of absence rank among the most frequently encountered challenges faced by the HR administrator. The federal Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA) - applicable to employers with 50 or more employees - contain overlapping and sometimes conflicting employee rights and employer obligations regarding California family leave.

The FMLA and CFRA both require covered employers to provide time off for personal illness, to attend to the illness of a family member and in connection with the birth or adoption of a child. Though this sounds simple, FMLA leave act and CFRA issues are among the most litigated of all employment law cases and can result in large liabilities. Federal and California family and medical leave laws provide eligible employees with the equivalent of up to 12 weeks per year for:

--Bonding with a newborn, adopted child, or child placed for foster care

--Caring for a family member with a serious health condition

--The employee's own serious health condition

--A qualifying exigency relating to a close family member's military service (FMLA only)

According to the federal Family and Medical Leave Act, eligible employees can get up to 26 weeks per 12-month period to care for an ill or injured service member (FMLA only).

Family and medical leave laws also prohibit retaliation or discrimination against an employee for exercising rights under FMLA or CFRA or for giving information or testimony about alleged violations of California or federal family and medical leave laws.

Seek an attorney's advice before proceeding to ensure that you do, in fact, meet all qualifications necessary.

3. Will refuting the claims my employer made on an unsatisfactory work performance review of my work likely lead to terminating me?

I am a substitute teacher. My employer that sends me out on teaching assignments has given me a written warning in the form of an unsatisfactory work performance review. They are basing it entirely on negative claims made against me by the schools I subbed at, such as, difficulty following lesson plans/directions, having classroom management issues, being disruptive, and arriving tardy/leaving early. I have written out a response refuting these claims in an organized fashion. I would like to know if my employer responds to my response by firing me if I have grounds for a wrongful termination case.

ANSWER:

In CA, employment is at will, unless the employee has a contract with the employer changing this status. Many employers take additional steps to protect their right to fire an employee at will by, for example, stating in their employee handbooks that employees work at will or requiring employees to sign an agreement that they work at will. Simply. it's not illegal for an employer to fire an employee, even for a reason that seems unfair or unjustified. However, the employer cannot legally fire anyone for a reason that breaches a contract or violates the law. If the real reason for terminating an employee is discrimination, retaliation, employee whistle-blowing, or other protected activity, the termination is wrongful.

4. Will I need to pay taxes on the sale of a home that I received through a living trust?

My mother passed away in March 2017. Her home was placed into a revocable living trust prior to her death. The home is to sell in September 2017 for about $220,000. My father is the trustee on the trust. He will be splitting the money from the sale between my brothers and me. Will I have to pay any taxes on my share?

ANSWER:

If someone dies in California with less than the exemption amount, their estate doesn't owe any federal estate tax, and there is no California inheritance tax. The heirs and beneficiaries inherit the property free of tax. They don't pay income tax on it, either, because inherited property is not ordinary income. Furthermore, while you do not have to claim an inheritance as income for income tax purposes, if assets that you inherit appreciate you may have to pay taxes on the gains.

5. Do contingent beneficiaries have a right to ask for the accounting of the distributions after the main beneficiary has died if a

... final distribution is not showing or filed? Thanks.

ANSWER:

Typically, under California statutory law, contingent beneficiaries do not have an automatic right to receive an annual trust accounting from the trustee, unless the trust provides otherwise. Nonetheless they still have important rights.

All beneficiaries, including contingent beneficiaries, have the right to request the trustee to provide them with information about the trust’s assets, liabilities, receipts (income) and disbursements (expenses) of the trust, the acts of the trustee and the administration of the trust relevant to the beneficiary’s interest, including a complete copy of the trust.

Requesting such information is a preliminary step to showing that there may be a problem with the trustee’s administration. The trustee’s response or lack thereof provides the grounds for petitioning the court for relief.

Speak to an Estate lawyer to have the trust in question reviewed.

6. Non-Solicitation agreement signed in California?

I have an Irvine, CA based s-corporation (Company A) with me and my wife as the employees. I am an independent IT consultant offering consulting for companies. There is another Irvine, California based consulting company (Company B) offered me to work on a contract with a client (Company C) in October-2015 and at the time got the non-compete, non-solicitation agreement signed between my corporation (Company A) and the consulting company (Company B). The engagement with the client (Company C) ended in February 2016. They have given me a release letter stating that the engagement with the company C is done. Subsequently, another consulting company (Company D) was looking for some resources to work for the client (Company C) and engaged me a part-time work in May - 2016. I worked for the client (Company C) through company D till the end of Dec-2016.

Now, the company B is sending letters threatening to sue that my company has violated the non-solicitation agreement. In reality, my company did not solicit the business, since i was in the market to get new gigs (though have a company, but I am more of independent consultant), i wanted to respond to the company B. can you please help?

ANSWER:

The California Supreme Court has held that nonsolicitation agreements that prohibit employees from soliciting their former employer’s customers are void – unenforceable – as a matter of the state’s public policy. California law places a very high premium on competition in the open market and employee mobility. If an employee can’t compete for a former employer’s customers, this policy is thwarted.

Outside of California, however, nonsolicitation agreements are likely to be enforced as long as they don’t make it too difficult for an employee to earn a living or unfairly limit a competitor’s ability to hire workers or attract customers through legitimate means.

To be enforceable, an agreement must meet these requirements:

?       The employer must have a valid business reason. Such a reason might include protecting a valuable customer list, protecting trade secrets or other valuable information, or protecting the company from the mass departure of valuable employees with specialized skills, knowledge, and access to trade secrets.

?       The customer list must be worth protecting. If the purpose of a nonsolicitation agreement is to protect the company’s customer list, the company must have spent time, energy, and money establishing its client database – and it must contain information that isn’t readily available to the general public. If anyone could figure out who a company’s customers or clients are just by looking in the phone book, a court probably won’t protect the customer list.

?       Employees and customers can leave voluntarily. Non-solicitation agreements can’t prevent a client, customer, or employee from moving to a competitor voluntarily. There isn’t much a company can do to stop its other employees from leaving to join a former employee at a new company, as long as the departing employee hasn’t improperly solicited them (and the employees aren’t subject to enforceable non-compete agreements). Similarly, if customers want to take their business to a competitor, a non-solicitation agreement isn’t going to be much help, unless the departing employee has improperly pressured them or used the former employer’s information (such as a price list) to get their business.

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Read More Here: https://www.bottledbusinesssense.com

Beginning September 15, 2017, SEE ENTIRE NEWSLETTER AT:

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