Shulman Hodges & Bastian LLP

Business Litigation Archives

Federal court: FedEx misclassified drivers

In disputes over employee misclassification and business models involving independent contractors, often the primary question is whether or not the company controls the contractors' work. If the company does control the work, then workers who have been classified as independent contractors may in effect be employees of the company. When that is the case, the employer may be responsible for back-pay and benefits for misclassified workers.

Court: Not all foreign whistleblowers protected under Dodd-Frank

Signed into law in 2010, the Dodd-Frank Act provides protections to employees who blow the whistle on potential regulatory violations in the financial services industry. Provisions in the law protect whistleblowers from retaliation by their employers. However, a recent U.S. appellate court ruling raises the question of whether certain foreign employees of multinational corporations are afforded those same protections.

Former employees claim SpaceX failed to notify about layoff

In California, if you have 75 or more employees on the payroll and you plan to lay off 50 or more, then you are required to give written notice to the employees at least 60 days before the layoff takes effect. Under the state's Worker Adjustment and Retraining Notification Act ("WARN Act"), employers who don't provide the required notification could have to pay as much as 60 days worth of benefits and compensation to the affected employees. Companies could also face civil penalties for failure to provide sufficient notice.

Carve-out agreement will only be allowed if Chapter 7 trustee rebuts presumption of impropriety

The Ninth Circuit U.S. Bankruptcy Appellate Panel in In re KVN Corp., Inc., 13-1318, decided July 29, 2014, remanded a bankruptcy case from the Northern District of California to determine if a carve-out agreement reached between a Chapter 7 trustee and a bank resulted in a benefit to the bankruptcy estate. Upon the debtor's bankruptcy filing, the bank approached the trustee seeking her aid in selling the lender's collateral. The trustee agreed but in exchange, required the bank to pay storage costs and split the net proceeds from the sale with the estate. The trustee estimated the sale would earn up to $4,400 for the benefit of unsecured creditors. The Bankruptcy Court denied approval of the carve-out agreement and the trustee appealed. The BAP agreed with the Bankruptcy Court that generally, fully encumbered property should not be sold by a Chapter 7 trustee and that there is a presumption of impropriety in carve-out agreements but that carve-out agreements are not per se banned. In order to rebut the presumption of impropriety, however, a trustee must show that s/he has fulfilled his/her basic duties, that the agreement benefits the estate, and the terms of the agreement were fully disclosed. In this case, the BAP had a difficult time finding that the carve-out agreement was in the best interest of the estate and remanded the case. Click here to read the full opinion.

Righting wrongs through a professional negligence claim

A successful business is operated and grown by good, smart work. The effective coordination of skills and experience across jobs can have extremely positive outcomes, and employees and licensed professionals have to be carefully chosen to protect your interests, reduce risks, handle operations and build profits.


The California Court of Appeal recently issued a decision in Wells Fargo Bank v. Weinberg, 2014 Westlaw 2762068 (Cal. App.). There, a corporation (in this case a law firm comprised of only one attorney) needed money which it ultimately borrowed from a bank. Although the attorney personally guaranteed the debt, there was apparently no writing evidencing the guaranty.

Jury verdict favors Facebook in patent infringement case

Whether you're seeking to hold someone liable for patent infringement or defending against a patent infringement claim, it is important that you have a legal professional investigate the patents in question and monitor patent portfolios. With the proper documentation many patent disputes can be resolved outside of court. That wasn't the case, however, in a recent trial involving Facebook and a company representing a now-deceased computer programmer. According to Rembrandt Social Media, which sued Facebook, a Dutch programmer named Joannes Van Der Meer patented the means to operate an online personal diary called Surfbook prior to Facebook's existence.

CA financial adviser told to pay $3.7 million to ex-employees

Litigation comes with great expense and uncertain results. If you're involved with a serious business dispute you should appreciate the benefits of avoiding the courtroom unless it is absolutely necessary. With solid legal planning, mediation or arbitration may be the most cost-effective way of resolving a dispute. If an out-of-court settlement can't be reached, then you will need experienced attorneys who are prepared to litigate.

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