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1011 Camino Del Rio S, Suite 531
San Diego, CA, 92108
United States

(619) 236-8655

Representation in business, real estate, construction, home care, trust and probate litigation and general civil litigation.

Blog

Extortion: Risks from Overzealous Demand Letters

Ron Stormoen

Issue

Can a person legally use the threat of potential criminal, administrative or disciplinary charges in addition to civil liability in a demand to an opposing party to pay a debt?

No. Due to recent clarifications in California law, a threat in this regard may be considered extortion.

Background

Prior to the initiation of the trial process, the vast majority of civil disputes are resolved by the parties outside of court. Common legal platitude claims that 95% of lawsuits result in a settlement. Demand letters are typically utilized to force parties into settling their disputes outside of court before the litigation process even begins. While these are great tools, certain types of demand letters run the risk of being considered extortion.

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No-Hire and Non-Interference Contract Provisions

Ron Stormoen

Issue

Can a company prevent one of its current clients from hiring away the company's employees?

Short Answer

Possibly. Generally, the company, as an employer, cannot restrict the movement of its employees. However, some California Courts seem to suggest that a narrowly defined contract provision between a company and its client may give the company the ability to prohibit “employee raiding,” or at least make it expensive for a client to steal an employee, which might be a hiring disincentive.

Background

Under common law, contractual restraints on the practice of a profession, business, or trade were once considered valid as long as they were reasonably imposed. In 1872, however, California adopted a public policy that promoted open competition, thus rejecting the common law rule of reasonableness. This public policy is manifested in California Business and Professions Code Section 16600, which states:

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Changes in the Law - Home Care: Now What?

Ron Stormoen

By now many in the home care industry have heard about recent California and Federal laws which may drastically impact how home care companies operate. 

This is the second of two articles.  Article 1 summarized some significant changes.  This Article provides some possible alternative contractual/care arrangement for home care companies, their employees and the care recipients to consider.

If the traditional in home care company model has now become too expensive for the home care company and/or the care recipient, is there an alternative?  An employment type agency model may provide an alternative.  As with any legal discussion, you should consult an attorney to determine whether an alternative is right for you. 

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Changes in the Law - Home Care: What Changed?

Ron Stormoen

By now many in the home care industry have heard about recent California and Federal laws which may drastically impact how home care companies operate.

This is the first of two articles. Article 1 summarizes some significant changes. Article 2 provides some possible alternative contractual/care arrangement for home care companies, their employees and the care recipients to consider.

First, what changed?

A.      ASSEMBLY BILL 241

Recently, the California Legislature passed AB 241, known as the Domestic Worker Bill of Rights (“DWBR”). There are many components to DWBR and you should consult with an attorney about how the law affects you, but the following is one of the major changes made by this law.

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New Corporate Forms in California

Ron Stormoen

As of January 1, 2012, there are two new subtypes of stock corporations in California: a Flexible Purpose Corporation and a Benefit Corporation. This article provides a brief overview of these corporation types.

WHAT IS A FLEXIBLE PURPOSE CORPORATION?

Purpose: A Flexible Purpose Corporation (FPC) is a for-profit corporation that may also pursue environmental or other public purpose objectives. Nonprofit corporations often prove inadequate for “social entrepreneurs” because the Internal Revenue Code and regulations severely restrict the for-profit activities of a nonprofit corporation, and the process of seeking tax-exempt status can be prohibitively lengthy. On the other hand, the two business forms available to for-profit entrepreneurs—the corporation and the limited liability company—have downsides when social objectives are combined with profit-making goals. These downsides are especially problematic when traditional investment capital is sought. A FPC integrates the “for profit” aspect of a traditional corporation and the charitable purpose of a non-profit corporation by allowing the corporation to have a flexible purpose which is stated in the articles of incorporation. Additionally, a flexible purpose corporation enables the board of directors to pursue a social object without the threat of a shareholders’ lawsuit for not maximizing profit.

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