Message from the Firm

By Brad Cohen

Doing business in California can involve many legal and tax hazards and hurdles. This newsletter discusses three issues we have dealt with in our business practice that demonstrate such hazards and hurdles.

Jon Karp's article discusses one of the potential pitfalls a client faced during the sale of its business in California as a result of the differences in the federal and California WARN acts. Jon also provides a creative solution to the problem that satisfied the law without creating additional transaction costs for either the buyer or the seller.

In the second article, Gary Wexler summarizes a recent Supreme Court case involving the inducement of at-will employees to quit their current employment to come work for a competing company. Gary's article points out that the mere solicitation and/or hiring of a competitor's employee is not actionable in California, however, a defendant may be held liable if the solicitation was coupled with an independent unlawful action. Unfortunately, the Court did not specify what that unlawful action was, therefore, one needs to exercise great care in the hiring of a competitor's employees.

California Usury laws regulate the maximum amount that can be charged on a loan. These rules are very complicated and may apply even if the lender or the borrower didn't know the interest rate exceeded the maximum amount prescribed by law. Although there are many exceptions to the Usury laws, the definition of interest is broader than you might think. If the law applies, a borrower has several remedies against the lender.

As always, if you have a question about an article in this newsletter, please contact the author or me.

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