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Westinghouse in Bankruptcy! Do they owe you money?

Westinghouse Electric Bankruptcy

By Kimberly S. Winick, Esq.

Westinghouse Electric Company LLC and thirty of its affiliates filed for bankruptcy relief on March 29th – they are calling it a strategic restructuring.  The companies design, manufacture and maintain nuclear power plants.  In the course of their business they hire employees and independent contractors, buy and lease equipment and real estate, contract for casualty, liability, workmen’s comp, and a myriad of other forms of insurance, buy materials and supplies, and store and move them.  They hire catering services and buy food for work teams.  In short, thousands of other businesses and individuals across the USA, and across the world, will be affected by this filing.  We don’t know who, yet, because Westinghouse hasn’t filed the requisite lists and schedules of creditors, asset, contracts, and liabilities.  But those creditors, landlords, contract parties, and others have rights that are being affected now.  The Bankruptcy Court today held hearings on Westinghouse’s requests for special procedures and modifications of Bankruptcy laws and procedures.

The cases were filed in the Southern District of New York (New York City). However, lawyers from all around the country will be representing affected parties and participating in the case.  If you are doing or have done business with Westinghouse or an affiliate, now is the time to review your records, contact a business bankruptcy lawyer, and prepare to protect yourself.


Thank you for joining us on CIarkTalk! We look forward to seeing you again on this forum. Please note that views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog. If you have any questions about the content in this legal alert, please feel free to contact the author by email at kwinick@ClarkTrev.com, or by telephone at 213-629-5700.

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At Will Employment – What Does It Really Mean?

At Will Employment

By Deborah H. Petito, Esq.

All employers—large and small—are governed by a myriad of state and Federal laws with complex legal requirements. Navigating the complicated and ever-changing maze of employment laws can be confusing, and employers may find themselves caught in an employee lawsuit if they aren’t careful to avoid making these common mistakes.

Many employers do not understand the true meaning of “at will” employment. At will employment is defined as the right of the employer or the employee to terminate the employee’s employment at their will for any reason.  In California, Labor Code §2922 provides that all employees are employed at will and specifically states, “An employment having no specified term, may be terminated at the will of either party on notice to the other.”  It seems pretty clear but employers often fail to take other laws into consideration that affect at will employment.

Employers have two basic misunderstandings about at will employment:

  1. They can terminate an employee’s employment at any time for any reason (given the definition this is a valid assumption); and
  2. They can do nothing to change the at will status of an employee.

First, employees always have the right to terminate their employment at will unless they have a contract which provides otherwise in which case they may be giving up benefits under the agreement. Employers cannot force employees to work – slavery was abolished long ago.  Employers on the other hand are restricted by both federal and state law. These laws include: discrimination under the California Fair Employment and Housing Act and Title VII, worker’s compensation, Americans with Disabilities Act, Family Medical Leave/California Family Rights Act, whistleblower laws, and other California and federal statutes that provide rights to employees. Employers cannot terminate employees for a discriminatory or retaliatory reason or because employees have exercised their rights or complained because they were not allowed to exercise their rights under these laws. Employers also cannot terminate an employee for complaining to an outside government agency about the employer’s practices. There are many nuances to each of these laws and employers need to be aware of them before they decide to take action to terminate an employee.

Second, while employees begin their employment as at will employees (unless there is a contract), employers can change the employee’s at will status by its words and actions. Employers may refer to the company as a family operation where everyone “grows old together,” or tell employees they have a “job for life.” These words can change the at will relationship and in the 1980s court decisions confirmed this fact. Also, similar statements in employee handbooks can change the at will relationship. While the owner or management team may be aware of this fact, they often forget to train their supervisors and managers. In California supervisors and managers are the eyes and ears of the employer and can create liability for the employer. Therefore, it is necessary for employers to recognize that fact and train their supervisors and managers not to make such statements.

In order to protect its interests, employers should:

  1. Review terminations of employees carefully and ask themselves:
  • Is the employee in a protected class?
  • Has the employee complained?
  • Did the employee file a workers’ compensation claim?

A careful review may reveal underlying issues. The best practice is to contact your employment attorney and discuss each termination to undercover any potential issues. Upper management also should not blindly accept recommendations from lower management without asking questions. This review, even if it uncovers some potential issues, does not mean that the termination does not occur but it allows consideration of potential claims and may lead to offering severance to avoid future litigation.

  1. Make sure that employee handbooks contain at will provisions which specifically state that the at will relationship cannot be changed except in writing by the owner, president or other high level officer of the employer. Take out progressive discipline from your handbook. You should use it in making decisions but do not commit to using it. There will always be a situation where warnings will not be given before termination and plaintiff’s attorneys will use that provision to show you did not follow your own policies.
  2. Evaluate and terminate employees as soon as performance, attendance or other issues arise. Many employers fail to use the orientation period to evaluate employees. The message is evaluate early and do not keep a problem employee. They rarely get better.

Hope you found the above discussion helpful. In my upcoming posts, I plan to share with the readers practical knowledge and tips on a variety of labor and employment law topics applicable to employers.  Stay tuned for another conversation on ClarkTalk!!

Thank you for joining us on ClarkTalk! We look forward to seeing you again on this forum. Please note that the views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog.  If you wish to consult with the author of this post or another attorney at Clark & Trevithick, please contact Deborah Petito by email at dpetito@ClarkTrev.com or telephonically by calling the author at (213)629-5700.

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San Jose “Opportunity to Work” Ordinance

San Jose, California

By Deborah H. Petito, Esq.

San Jose is the next city to pass an ordinance that regulates employers. In what appears to be partially motivated to prohibit employers from hiring part-time employees to avoid providing health insurance under the Affordable Care Act, San Jose has passed the “Opportunity to Work” ordinance. The San Jose ordinance prohibits employers from hiring a temporary employee or employees through staffing agencies before offering additional hours to existing employees who, in the employer’s good faith and reasonable judgment, have the skills and experience to perform the necessary work. This ordinance also requires that the employer use a “transparent and nondiscriminatory” process to distribute these extra hours among existing employees. Employers do not have to provide additional hours to existing employees if it would require payment of overtime.

Employers will be required to post a notice prepared by the City and employers will be required to keep records for any new hire documenting that current employees were offered additional hours. Employers will also be required to maintain records, such as employee work schedules, and any other records the City requires employers to retain.

There are no fines, fees or civil penalties for the first violation. The Ordinance also provides a hardship exemption and small business exemption.

The Ordinance is effective April 6, 2017. As local government becomes more active in the employment area, employers need to keep abreast of local government actions.


Thank you for joining us on CIarkTalk! We look forward to seeing you again on this forum.  Please note that views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog.  If you have any questions about San Jose’s “Opportunity to Work” Ordinance, please feel free to email Deborah H. Petito at DPetito@ClarkTrev.com or Leonard Brazil at LBrazil@ClarkTrev.com, or contact our office at (213) 629-5700.

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Considerations for Troubled Borrowers Approaching Loan Workouts

Restructuring

The following blog article is brought to you by our Real Estate Workout Team which is comprised of attorneys Kevin P. Fiore, John A. Lapinski, Leslie R. Horowitz,  James A. Arico, Joel A. Goldman, and Kimberly S. Winick.

Start Considering Workout Scenarios Right Away

Consideration of possible workout scenarios should begin as soon as possible following the appearance of difficulties with applicable performance indicators (e.g. income stream, construction schedule, cost overruns) of a property. Loan workout negotiations may prove to be more fruitful if commenced before the borrower is in default under its loan obligations.

Develop A Plan Before Approaching the Lender

Before approaching the lender, a borrower should develop a workout plan that reflects light at the end of the tunnel for a lender. A successful plan is forthright about the existence of the problem, identifies the roots of the problem, sets forth a well-detailed feasible business plan and a proposed restructuring of the loan, explains why the loan should be restructured and how the restructuring will assist the borrower through the economic downturn. Most importantly, the plan must make clear when and how the lender ultimately will be repaid. If the ultimate repayment necessitates a discount on the original loan obligation, the workout plan must explain with particularity why it is to the lender’s advantage to permit the borrower to retain control and possession rather than simply to take the collateral and deal with it as its own.

Cash At The Front Can Be An Advantage

By addressing the problems early, the borrower may be able to develop a workout plan that involves a new cash infusion at the front end. If the borrower has no cash at the time it is seeking restructuring arrangements, the borrower will face great difficulty in (a) developing a viable workout plan or (b) funding an adversarial relationship with its lender. The borrower needs to remember that, absent voluntary arrangements with the lender, the borrower and lender will be forced into an adversarial relationship, in which event the lender is likely to prevail unless the borrower has a “war chest” with which to engage in the adversarial proceedings with the lender (which, of course, may lead to a more intelligent approach to the problem by the lender). The success or failure of a borrower’s loan modification/workout arrangements with its lender will largely depend on the experience of the lender’s workout group and the position of the lender vis-à-vis its regulatory obligations, if any, to the bank regulatory agencies.

React Quickly To Preserve Your Options

As initially noted, lenders, depending upon their circumstances, are reacting differently to troubled loan scenarios. There is no one size fits all approach to troubled loans, but one thing is certain: the sooner the problem is considered, the more options the troubled borrower will have in achieving either a successful workout or salvaging any remaining equity in the troubled property.


Thank you for joining us on CIarkTalk! We look forward to seeing you again on this forum. Please note that views expressed in the above blog post do not constitute legal advice and are not intended to substitute the need for an attorney to represent your interests relating to the subject matter covered by the blog. If you have any questions about the article, please feel free to contact our office at 213-629-5700.

Clark & Trevithick is a full service Los Angeles-based law firm that has been representing clients throughout California for 40 years. The firm’s attorneys have broad expertise which permits Clark & Trevithick to provide its clients with the comprehensive legal advice necessary to operate in today’s business environment. For more information, visit www.clarktrev.com.