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The Marin Lawyer
See page 15 for details & more events.
President’s Message ........................ 2Update from Bench: Judge Howard ..3 Marin Race for Judgeship ............... 4Food from the Bar ........................... 5Director Spotlight: Damon Connolly 6On Demand Industry ....................... 7Teens & the Law ............................. 8Employment Law ............................ 9Top Ten Privacy Law Pointers ...... 11So You Want to be a Judge ............ 13New Members ............................... 14Calendar Details ............................ 15Marketplace ................................... 16
An Official Publication of the Marin County Bar Association
May 2016 Volume 47, Issue 5
Calendar of Events
In This Issue
The Marin Lawyer editorial team thanks May Guest Editor Christian Martinez.
Tues, May 10: 12:00-1:30 PMLabor & Employment Section Meeting
Wed, May 11: 12:00 – 1:30 PMReal Property Section Meeting
Wed, May 11: 12:00 – 1:00 PMProbate & Estate Planning Section Meeting
Tues, May 17, 2016: 12:00-1:30 PMFamily Law Section Meeting
Tues, May 17: 12:00 – 1:30 PMProbate & Estate Planning Mentor Meeting
Wed, May 18: 12:00 – 1:30 PMADR Section Meeting
Wed, May 25: 11:45 AM – 1:30 PMMCBA Members LuncheonVeterans in the Criminal Justice System Wed, June 29: 11:45 AM – 1:30 PMMCBA Members Luncheon2016 Update on U.S. Supreme Court Rulings
MCBA MEMBERS LUNCHEONWED, MAY 25, 2016 | 11:45 am – 1:30 PM
Serving Veterans in the Criminal Justice SystemSpeaker: Sean Stephens
Veterans Services Officer for Marin CountyWith nearly 2 million veterans living in California, an estimated 300,000 of these veterans suffer from service related trauma. Behavior problems stemming from service-related mental health issues often lead to veterans facing criminal prosecution. Learned military skills that enhance survival in combat may translate to aggressiveness, impulsivity, arrest, and poten-tial for incarceration in the civilian community.
Mr. Stephens will discuss how the veteran’s diversion program helps vets avoid consequences of a conviction, including difficulty finding employment or housing. He’ll discuss how Marin County attorneys can assist veterans through the courts, and the recently enacted veteran’s diversion program. Learn about Veterans Services Agency
San Rafael Joe’s Buffet Lunch 1 General CLE
$40 MCBA members / $50 nonmembersSpeaker & event details, registration
MCBA MEMBERS LUNCHEONWED, JUNE 29, 2016 | 11:45 am – 1:30 PM
2016 Update on U.S. Supreme Court DecisionsSpeaker: Professor Rory Little Constitutional Law Professor, UC Hastings
Club at McInnis Buffet Lunch $45 MCBA members / $55 nonmembers 1 General CLEDetails & Registration
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The Marin Lawyer
2016 MCBA SPONSORSSILVER SPONSORS
BRONZE SPONSORSBank of Marin
Foley & Lardner, LLPAyanna Jenkins Toney
Williams & Gumbiner, LLP
LEADERSHIP CIRCLEElizabeth Brekhus, Esq.
Susan Feder, Esq.Peter Flaxman, Esq.Nassiri & Jung, LLLP
Steven Nielsen, Esq. Gary Ragghianti, Esq.
James Sell, Esq.Lawrence Strick, Esq.
Interested in joining the Leadership Circle? Contact Mee Mee Wong at 415-499-1314
PRESIDENT’S MESSAGEHey Everyone, Step Up and Enter the Leadership Circle
Throughout my short tenure as MCBA President, it has been a joy to preside over the vibrant monthly meetings, watch and hear about the great section events, work with your Board, and interact with the Bench
to further the goals of our organization.Yet, in order to fulfill our mission there is more work
for us to achieve. Our goal, of course, is to expand pro-gramming to address community needs. In order to grow, however, we need resources. Historically, MCBA has been dependent on membership dues for most of its funding. De-spite our robust membership, dues only go so far. They keep our lights burning. To reach further out in the community,
MCBA has launched MCBA Leadership Circle. Simply, MCBA is seeking monetary contributions from members designed to help grow and support our current programing. I am asking you to join a growing list of MCBA Leaders in making a contribution of five hundred ($500) dollars.
In addition to knowing that your contributions are promoting the MCBA mission, Leadership Circle mem-bers will be regularly acknowledged throughout the year at membership meetings, and receive expanded visibility in the monthly newsletter.
I understand the pressures associated with running a small law office, yet I know the satisfaction of giving back to the community. To practice law is an honor, helping the Bar grow is the right thing to do. We are off to a great start and I want to thank our first members of the MCBA Leadership Circle, which you’ll see in the graphic below. Please join me in growing the Circle. Should you have any questions about the program, give me a call or shoot me an email. I look forward to your help in making an impactful difference in our legal community.
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The Marin Lawyer
JUDGES CORNERUpdate from the BenchBy The Honorable Geoffrey Howard
I apologize for this. Really, I’m sorry. You invited me to par-ticipate in this wonderful new MCBA newsletter feature called,
innocuously enough, “Judge’s Corner.” And I’m going to impose on you the worst type of legal article. That’s right – a rules discussion. Why?, you ask. Well, . . . it seems . . how do I say this? . . . warranted.
I get it, too. Eyes can glaze over at MCLE fairs when wise prognosticators discuss impending rule changes. Updates can find themselves at the bottom of the reading stack, just below the “New Rules Self-Test” in the latest legal periodical. New rules happen every day it seems, but rarely do they affect your practice.
Now, there you sit, alternating between panic over how much work you have to do and panic over whether you’ll have enough next week. A long-time, lucrative client storms into your office. She slams a heavy stack of papers down on your desk: “I just returned from my resort in Mexico and found this packet at the house – I’ve been sued! You need to get me out fast! And cheap! And fast!”
You review the Complaint. Despite the length, and scathing vitriol, in your view it fails to state a claim. You can demur! It also prays for damages of $20,000, making it a limited case. Certain that you will further endear yourself to this very valuable client, you clear your desk with a well-placed forearm sweep. You immediately begin drafting your demurrer. As an experienced lawyer, you know the demurrer statute by heart – you’ve won so many! – so you don’t read it again. Four hours later, convinced you have a clean winner, you file and serve your demurrer.
Time passes, filled with many successful court appear-ances. The opposition brief arrives at your door. It explains that you failed to meet and confer prior to serving your demurrer. Uh oh. Meet and confer? “What nonsense,” you mutter to yourself. “Bad faith!” But, as you finally turn to Code of Civil Procedure 430.41, your stomach knots. You will soon have a very unhappy client.
Indeed, “the demurring party shall meet and confer in person or by telephone with the party who filed the plead-ing that is subject to demurrer” to try to resolve the issues related to the demurrer. (Code of Civ. Proc. §430.41(a).) The rule even specifies how to conduct the meeting: “the
demurring party shall identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies.” (Code of Civ. Proc. §430.41(a)(1), emphasis supplied.) This meet-ing must take place “at least five days before the date the responsive pleading is due.” If the parties cannot meet and confer by this time, the demurring party gets an “automatic 30-day extension of time within which to file a responsive pleading.” (Code of Civ. Proc. §430.41(a)(2).) The demur-ring party must also file and serve a declaration with the demurrer. The declaration must state either (A) the means by which the parties met and conferred and the failure to reach an agreement, or (B) that “the party who filed the pleading subject to demurrer failed to respond to the meet and confer request” or “failed to meet and confer in good faith.” (Code of Civ. Proc. §430.41(a)(3)(A)-(B).)
The new statute also specifies that a party may not demur to any amended pleading after a demurrer if the demurring party could have demurred to the prior plead-ing. (Code of Civ. Proc. §430.41(b).) It also limits the pleading party’s ability to file more than three amendments beyond a CCP §472 amendment, without leave of court, in response to successive demurrers. (Code of Civ. Proc. §430.41(e)(1).)
Whew! With your can’t-miss demurrer now on life support, you enter damage control mode. You need to de-liver good news with the bad. Then you remember! Unless you can settle or resolve the case earlier, at least the trial will consume much less time and expense now. That is because new Code of Civ. Proc. § 630.20 mandates expedited jury trials in limited jurisdiction cases (subject to some excep-tions). Both the voluntary and mandatory procedures pro-vide for an eight-person jury (six votes needed for verdict) and a total trial time of five hours, including jury selection. The voluntary trial has no alternates while the mandatory trial has one. In the mandatory trial, each side gets four peremptory challenges. In the voluntary trial, each side gets three. The best part? Code of Civ. Proc. §630.23(d) invites the parties to modify these procedures to their liking by stipulation. (The court does too . . .)
As you consider how to explain all this to your client (especially the bit about the demurrer), you stare down the inevitable. Yes, you must do it. Mandates aside, maybe some good may even result. Slowly, carefully, you reach for . . . the phone.
“Hello? Jane? I see your explanation here about the required meet and confer . . . So, how can we resolve this thing?”
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The Marin Lawyer
On April 27, a large crowd gathered at the Embassy Suites to hear from the candidates running to be the next Marin County Superior Court judge. The June 7 election was made possible by Judge Faye D’Opal’s announcement in February that she is retiring from the bench.
MCBA’s Program Chair Gregory Brockbank provided introductory remarks to the judicial candidates forum. MCBA President Larry Strick served as moderator.
Larry welcomed the crowd and introduced elected officials who were in attendance. All nine judicial candi-dates participated. They include:
Otis Bruce, Jr. Michael Coffino Beth Jordan Sheila Lichtblau Renee Marcelle Thomas McCallister Nancy McCarthy Nicole Pantaleo David ShaneFive of the candidates work at the Marin County
Civic Center: three county prosecutors (Otis Bruce, Thomas McAllister and Nicole Pantaleo); a public defender (Michael Coffino); and a deputy county counsel (Sheila Lichtblau). The remaining candidates work in private practice in Marin: Beth Jordan, Renee Marcelle, Nancy McCarthy, and David Shane.
Each candidate gave a one-minute opening statement, and then Larry asked each candidate why they were running for judge, and what a judge’s role in the community should be. The candidates were given two minutes to provide a closing statement regarding their candidacy.
With so many candidates, there were necessary time constraints placed on the length of responses but the can-didates did a good job of asserting their key qualifications, their judicial philosophies and temperaments. More details
about each of the candidates can be found at the following link which provides a short summary of the candidates along with their respective websites. Candidates Statements
To win outright in the primary on June 7, a candidate must win at least 50 percent of the votes plus one. If this does not occur, there will be a runoff which will be decided during the general election set for November 8. Given the strength of the judicial candidates, a runoff is a very likely outcome.
Many thanks to MCBA’s 2016 program sponsors. Silver Sponsors (Cal-Pacific Reporting, Inc. and Telnexus); and Bronze Sponsors (Bank of Marin, Foley & Lardner, LLP, Ayanna Jenkins Toney, and Williams & Gumbiner, LLP). Sponsors enable MCBA to host programs that bring interesting subjects to our membership. We also want to thank San Rafael Embassy Suites for their support in de-livering this well attended event.
Read more about the 2016 Judicial Forum at the Marin IJ.
Above, L to R: Coffino, Bruce, Shane. L to R: Pantaleo, McCarthy, McCallister, Marcelle, Lichtblau & Jordan.
The Crowded Marin Race for Judgeship is On!By Caroline Joachim
Lifting business voice service out of the fog and into the cloud.
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1 (510) 859 7000 | www.telnexus.com
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The Marin Lawyer
Food from the Bar Campaign: Hunger in Marin?
The answer is YES. The SF/Marin Food Bank estimates that 1 of every 4 people in Marin and San Francisco goes hungry at times. Dignity usually keeps that food struggle out of view. The Food Bank reports that greatest demand is not from San Francisco’s bigger population but from the tree-studded land of spacious houses, top-draw musicians and famously liberal politics, Marin County.
A look at the numbers shows that rather than getting better, hunger is only biting deeper among the people it serves. The annual distribution of food in Marin jumped by 50 percent, from 4 mil-lion pounds five years ago to 6 million pounds now. 47 sites deliver food monthly in Marin. Only 15 percent of the recipients are homeless. The remaining food-challenged are working, unemployed, disabled, or elderly and are part of the greatest disparity between the rich/poor gap. Read more in a recent SF Chronicle story.
Out of the Public Eye. For example, the Food Bank pantry at Laura Dell Elementary School sched-ules food distributions before dawn to fit parent schedules and privacy, away from prying eyes or the bustle of a full school ground. Across town at the Whistlestop senior center, 120 elderly people pick up their food regularly. As at the elementary school, most of it is produce — 60 percent of the food bank’s supply consists of fresh fruits and vegetables.
Each MCBA member can make a difference!
DONATE: Every $1 donated provides $5 of food.
VOLUNTEER: 30,000 volunteers are needed to distribute 47 million pounds of food.
LET’S WORK TOGETHER TO END HUNGER fooddrives.sfmfoodbank.org/team/mcba
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The Marin Lawyer
DIRECTOR SPOTLIGHT Damon Connolly
What is your practice area?
Mediation; business liti-gation.
Do you have a particular emphasis?
Represent small businesses and start-ups as well as complex litigation.
Why did you decide to become a lawyer?Until taking office as a Marin County Supervisor in
January 2015, I was a full-time lawyer, which was my goal since the age of 12. I’ve always enjoyed advocating for people and figuring out how to solve problems.
Why do you live in Marin?My wife Dawn is from Marin and I’m from the East
Bay. We met at UC Berkeley. After living in Berkeley, San Francisco, and Sacramento, we decided to settle in Marin when our youngest daughter was 6 months old. I was drawn to the community, good schools, and the natural beauty.
What do you love to do when you’re not busy practicing law?
I really enjoy participating in outdoor sports like hiking, biking, and tennis. I also enjoy keeping my calendar full of interesting community events all over Marin and San Rafael.
Tell us about your family.Dawn is a family law paralegal at Simborg-Killing-
sworth. Our daughter, Brette (TL grad), will be graduating from NYU this May, and is now an “official” New Yorker having just rented an apartment in Bushwick. Our daugh-ter, Darin (Marin School of the Arts grad), is an artist and environmentalist and will be attending UC Santa Cruz to study Environmental Science.
If you could pursue any other career besides law, what would it be and why?
Public service. That’s why I’m so pleased to have the opportunity to serve Marin County.
Why did you join MCBA?It started as a way to stay connected with Marin col-
leagues when I was working in San Francisco and Oakland but later helped when I launched my own practice in San Rafael.
Why did you become a Director?It’s a great way to keep a foot in the legal world while
serving on the Board of Supervisors and to continue to give back to the profession.
If you had to pick a single highlight of your career, what would it be?
Finding smoking gun evidence on Enron when I was a Deputy Attorney General and then watching Barbara Boxer use that evidence to grill witnesses at a televised Senate hearing. Having served on the AG’s Energy Task Force as a lawyer, I was equipped to later become a founding board member and Chair of the Marin Clean Energy program.
What hard lessons have you learned practicing law that spill over into your role as a supervisor? What hard lessons have you learned as a supervisor that spill over into the practice of law?
A key lesson from practicing law I use at the Civic Center is to ask the tough questions. I also use my media-tion skills to cut through agendas and other obstacles to find common ground and the greatest good. The key lesson I’ve learned as a Supervisor that applies to the legal profession is bringing people together to solve problems – skills that help me as a mediator.
If you were asked to motivate the U.S. Men’s Na-tional Soccer Team, and you only had one day to do it, what would you do to guarantee a win in at the 2018 World Cup?
A good day-long Marin training regimen for body and spirit: start with meditation session at Spirit Rock, then run trails of Mount Tam, followed by lunch at Café Del Sol, then a trip to the Pickleweed Community Center and Mill Valley Rec Center to see how kids are inspired to work harder by what the National Team is trying to accomplish. End day with wind-down and pep talk at Marin Brewing.
What were three recent books you read for plea-sure? If you were at a very important job interview, what would you be tempted to claim were three recent books you read for pleasure if asked?
3 recent books are: M Train, Patti Smith; Rewriting the Rules of the American Economy, Joseph Stiglitz; and My Beloved World, Justice Sonia Sotomayor. Since the actual books make me sound eclectic, I’d stick with those for the important interview.
Favorite legal flick?Philadelphia.
Favorite type of food?Mexican.
Go-to drink for those special occasions?Gin martini “up” with olives.
Best way to unwind?Being outdoors enjoying Marin’s natural beauty.
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The Marin Lawyer
Legal Challenges to the On-Demand IndustryBy Keegan Dresow
Contractor/employee classi-fication lawsuits against Uber and Lyft have grabbed headlines in re-cent months, and for good reason.
The outcome of those lawsuits will shape the on-demand industry for years to come. This issue, however, is not the only one that on-demand companies will face. As the on-demand industry continues to expand into other subsectors, less publicized companies are battling a diverse set of legal and non-legal issues in order to stay viable.
Understanding the employee/contractor classification issue is vital because these companies hope to avoid classi-fying their drivers as employees, which are more expensive to the companies than are contractors. Lyft recently agreed to pay out more than $12 million as part of a settlement in which they also agreed to give their drivers additional benefits, but not to classify them as employees (Cotter v Lyft, Inc.). Cotter will not serve as a formal legal precedent, but may be a harbinger for things to come. And just last week, Uber reached a settlement in which its drivers will remain classified as contractors in exchange for $100 mil-lion and other concessions.
Perhaps Judge Vince Chhabria (Cotter) best illustrated the issues facing the courts: “The test the California courts have developed over the 20th Century for classifying work-ers isn’t very helpful in addressing this 21st Century prob-lem...absent legislative intervention, California’s outmoded test for classifying workers will apply in cases like this. And because the test provides nothing remotely close to a clear answer, it will often be for juries to decide.” With the laws outdated, new law will be formed in courtroom battles.
The on-demand restaurant delivery service sector is a less publicized subsector of the on-demand industry that has become particularly crowded in recent years, with lawsuits beginning to materialize. In addition to the aforementioned contractor/employee classification issue, restaurant deliv-ery startups face issues ranging from intellectual property challenges to food safety compliance.
In-N-Out Burgers vs. Doordash (filed 11/06/2015) exemplifies these issues. In the lawsuit, In-N-Out alleges trademark infringement on the basis that Doordash adver-tises that it delivers from In-N-Out while using imitation and registered In-N-Out marks in promotional materials. This, In-N-Out argues, is likely to cause confusion that Doordash is affiliated with In-N-Out, which it is not.
In-N-Out never authorized Doordash to deliver its food, but Doordash continued to do so. In-N-Out argues that it has built decades of positive reputation and goodwill that this deception is likely to damage. A key reason why this damage will occur is, according to the complaint, because Doordash does not comply with food code requirements. The lawsuit is ongoing.
The failure of Homejoy – an on-demand house clean-ing service – further exemplifies the difficulties facing the on-demand industry. Homejoy was founded in 2010, raised $38 million by 2014, expanded into the United Kingdom in 2014…and closed its doors in 2015. While Homejoy was able to tap into the massive home services market, it (argu-ably) struggled to provide consistent, quality work from what were often young, inexperienced workers. Homejoy faced dual challenges in this regard as compared to the on-demand ride share industry: (1) unlike the ride share industry, in which a high percentage of the population are already “expert” drivers who need little or no training, a low percentage of the population is experienced in high-quality house cleaning; (2) expectations are higher in the home services market – an Uber or Lyft passenger expects only a reasonably safe and comfortable ride, whereas a home-owner wants nothing less than professional caliber clean-ing of their home. Homejoy faced the massive challenge of providing quality cleaning without hiring experienced employees while keeping training costs low enough to be able to provide the promised discounts and remain profit-able. When considering those challenges, the promised efficiency and profitability of on-demand house cleaning became harder to attain. Adding the prospect of lawsuits forcing Homejoy to reclassify its contractors as employees (in addition to competition from rival Handy, which has survived and is currently fighting the employee/contractor battle), the chances for future profitability became even slimmer, and the company shut down.
The contractor/employee classification lawsuits will continue to shape the on-demand industry. As Doordash illustrates, however, the challenges to various subsectors of the on-demand industry will be unique and will cross-over into many other areas of law. Cautionary tales such as Homejoy show us that each subsector’s unique chal-lenges will only add to the pressures exerted by contractor/employee classification issues and other legal challenges.
Keegan Dresow recently returned to Marin after coaching football in Denmark for four years. Since return-ing, his practice has focused on municipal, real estate, land use, and criminal law. He is available for contract work, and may be contacted at [email protected].
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The Marin Lawyer
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Teens & the Law comes to Drake High SchoolBy Patricia Medina
Individual rights, personal responsibility, and con-sequences under the law were dramatically portrayed in the Teens and the Law program held April 26 at Drake High School. With the help of Drake students, members of the MCBA’s Public Outreach Committee recreated two courtroom scenes for 60 students. They brought to life a sentencing hearing after a senior prank had “gone wrong,” and a hearing for a restraining order against a social media “cyber bully.”
In the sentencing hearing, students were shown that even a college-bound student who has made bad choices after a night of drinking and vandalizing school property will be subject to consequences that can derail a top stu-dent’s plans. With the Honorable Michael Dufficy Ret., (a former Drake student,) presiding, Deputy District Attorney Yvette Martinez argued for an appropriate punishment after a high school senior drove onto campus, vandalized a football field and school building, and injured her friend and the night custodian as she made her escape from school. When found at home, the teen had a high blood alcohol content and there was evidence of drug use.
The defendant’s counsel Peter Arian, a San Anselmo attorney and former attorney with the Marin County Public Defender’s office and the Federal Public Defender, asked the sentence to take into account his client’s lack of prior record and remorse. The defendant also made a statement accepting responsibility and recognizing need for substance abuse treatment. Considering all these factors, Judge Dufficy’s “sentence” demonstrated a balance between an appropriate consequence for the severity of the property damage and personal injury, and the court’s hope that the student’s substance abuse issues be addressed so that she could go on with her education.
The Drake students also played the role of the plaintiff and defendant in a cyber bullying scenario based on a law-suit in which Elizabeth Brekhus and her client petitioned for a restraining order against an ex-boyfriend who was posting demeaning statements on social media and harassing her. The restraining order had consequences that impacted a teen’s social life because the defendant couldn’t be at the same game, party, or school event as her client, and that the order could affect the defendant’s hope to become a police officer. After the skit, Ms. Brekhus provided some background about the extent of the harassment, and she described considerations that led to filing the lawsuit.
Many thanks to performers Judge Dufficy, Peter Arian, Elizabeth Brekhus, and Deputy District Attorneys Yvette Martinez and Tom McCallister, Deputy County Counsel Sheila Shah Lichtblau, and School Resource Officer and Drake High School graduate Deputy Domenick Yazzolino. Each described their own careers and interest in the law and law enforcement. Thank you also to MCBA Board members Tom Brown and Patricia Medina who coordi-nated the program. Finally, a special thanks to Drake High School students Rebecca DeAngelis, Jackie Lozaw, Tony Marelich, and Aislinn Miller, as well as Drake teachers Kathleen McCormick and Shelly Norstad for inviting the Public Outreach Committee to Drake.
L to R: students Rebecca De Angelis and Jackie Lozaw, Peter Arian, Deputy Domenick Yazzolino, and Judge Michael Dufficy.
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The Marin Lawyer
(Continued on page 10)
Employment Law Impact of the New Defend Trade Secrets ActBy James Pooley
The Senate has just passed – unanimously – the Defend Trade Secrets Act (DTSA), S.1890, and
passage in the House, while not certain, looks likely, since the bill has more than 125 co-sponsors from both parties. The main focus of the legislation is to add a civil right of action for trade secret misappropriation to the Economic Espionage Act. But this article will focus on two of the lesser-known aspects of the bill that could have a significant impact on employment law.
The Death of the “Inevitable Disclosure Doctrine”The first of these concerns the preservation of em-
ployee mobility, an important idea that it is embedded in Cal. Bus. & Prof. Code § 16600. Although that statute is nominally about prohibiting noncompete agreements, it has informed court decisions on related subjects as a reflection of California’s strong public policy favoring the free move-ment of labor. But we also have to protect legitimate trade secrets, and the general inclination of judges to empathize
with someone switching jobs can be tested when an em-ployee with a great deal of sensitive corporate information leaves to join (or form) a direct competitor.
Recognizing the critical importance of preventive relief to trade secret rights, the Uniform Trade Secrets Act (UTSA) has always permitted injunctions against “threatened misappropriation,” and the same language is used in the DTSA. But because the DTSA would establish a national standard, some critics (particularly from Cali-fornia) expressed concerns that the “inevitable disclosure doctrine,” which has been expressly rejected here, might be used by a California federal court to block an employee from taking a new job. The draft bill had tried to address this concern with a proviso that no injunction could “prevent a person from accepting an offer of employment under con-ditions that avoid actual or threatened misappropriation,” but this did not quiet the controversy.
To understand the nature of the dispute we need to wind back the clock to 1995, when the Seventh Circuit issued its decision in Pepsico v. Redmond, 54 U.S. 1262 (7th Cir. 1995), affirming a five-month injunction against a former marketing executive who had lied about his plans to take an identical position with another company that was about to launch a directly competitive product. Although the court had emphasized the executive’s bad behavior, it also summarized that “defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade secrets.” Commentators promptly wrenched this phrase from its context and warned that Pepsico could be used to justify enjoining someone from taking a job just because of what he or she knew. This is how the so-called “inevitable dis-closure doctrine” was born.
Having (mis)construed Pepsico this way, it was easy to make it a target, raising the alarm that “inevitable disclo-sure” was the equivalent of a post-hoc judicially-imposed noncompete agreement. Perhaps unsurprisingly, the backlash was particularly strong in this state. In Whyte v. Schlage Lock, 101 Cal. App. 4th (2002), the Fourth District Court of Appeal issued a blistering condemnation of the doctrine and flatly declared it unacceptable under Califor-nia law. It did this in response to the plaintiff’s argument that the doctrine should be available as an “alternative” to proving “threatened misappropriation.” Just what kind of evidence might be enough to establish a threat under the UTSA was not addressed. However, that question was answered several years later by the Fifth District in Central Valley General Hospital v. Smith, 162 Cal. App. 4th 501 (2008). The court said that evidence of bad behavior, like a prior misappropriation, an intention to misappropriate, or a refusal to return confidential material, should be enough to supply the inference.
Real Estate And Land Use Expert Joins Monty White LLP
Monty White LLP is pleased to announce that Nelson Lee has joined the firm as Of Counsel. Nelson’s practice comprises nonprofit law, estate planning, conservation law, and real estate transactions. He was trained in business law and real estate law as an attorney at Morrison Foerster and for 23 years was General Counsel for The Trust for Public Land, a national nonprofit land conservation organiza-tion. Nelson advises on the income and estate tax consequences of transactions involving charitable donations and the use of conservation easements. Nelson also provides estate planning services for individuals.
Monty White LLP is a nine-attorney firm with offices in San Rafael and Santa Rosa. Practice areas include personal injury, construction, estate planning, real estate, land use, nonprof-it law, immigration, elder law, general civil litigation, and family law.
San Rafael Office1000 Fourth StreetSuite 425San Rafael, CA 94901tel: 415.453.1010www.montywhitelaw.com
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The Marin Lawyer
In the meantime, the ideological battle lines had been drawn, and the forces mustering against inevitable disclo-sure, reinforced by many academic and popular articles, were determined to stamp it out if possible, or at least to protect their own jurisdiction from infection. The fervor of the debate apparently distracted everyone from critically examining what “inevitable disclosure” meant, or how it was actually being applied in places that didn’t have a reflexive opposition to it. It turns out that the doctrine was almost never used as the opponents assumed, that is where the only threat indicator was how much the employee knew. In fact, in those cases judges typically explained their deni-als by reminding the plaintiff that if all this information had been so critically important they could have demanded that the employee sign a non-compete agreement.
I was fortunate to have a ringside seat to the delibera-tions over the DTSA, first as a witness before the Senate Judiciary Committee in December 2015 and since then providing informal input to Senate staff. Following some very productive conversations with Mark Lemley, professor at Stanford Law School, we concluded that the concern over the inevitable disclosure doctrine was a false conflict. So we suggested to staff that the issue should be reframed around the kind and quality of evidence that should be required – under the UTSA or the DTSA – to prove “threatened misappropriation,” and that the inquiry should focus on the employee’s behavior, not merely on how much they knew.
Ultimately, Senator Feinstein proposed an amendment to the relevant portion of the DTSA, which was accepted as part of the bill that passed on April 4. It allows an order against threatened misappropriation, provided that it not “prevent a person from entering into an employment rela-tionship, and that conditions placed on such employment shall be based on evidence of threatened misappropriation and not merely on the information the person knows.” (In a belt-and-suspenders approach, the DTSA also includes a directly related amendment proposed by Senator Cornyn that the order may not “otherwise conflict with an appli-cable State law prohibiting restraints on the practice of a lawful profession, trade, or business.”)
The new language on threatened misappropriation has at least two very positive effects. First, it makes express the apparent consensus from courts across the country that “threatened” misappropriation may not be established merely by the importance of the information that someone knows. This makes sense not only as a matter of public policy but also of evidence law. Second, it relieves us from the energy-draining debate over “inevitable disclosure,” which was pretty much a straw man that people loved to punch. Courts – at least federal courts for now – will not
have to consider whether a jurisdiction accepts or rejects this abstract “doctrine,” but instead will ask: what is the actual evidence from which we should conclude that this person (or their new employer) can’t be trusted to honor the integrity of the plaintiff’s trade secrets? Outcomes in particular cases should not be substantially different.
Protection for Employee Whistleblowers Against Suit for Violation of Their Nondisclosure Agreements
Another recent amendment to the DTSA addressed a long-neglected question in trade secret law: how do we as-sure that employees who find evidence of criminal activity inside the company, but who are restricted by nondisclosure agreements from communicating those facts, can safely speak to their lawyers and to law enforcement officials? One might think that this question would already have been reliably answered by now, but it hasn’t been. In a wide-ranging and thoughtful article on the subject, Tailor-ing a Public Policy Exception to Trade Secret Protection, Professor Peter Menell of the UC Berkeley School of Law explores not only the sparse and sometimes contradictory legal authority, but also the psychology of whistleblow-ing and the importance of clear “safe harbors” for those who are thinking of reporting wrongdoing. As a practical matter, they face a conundrum, where the upside is a clear conscience but the downside can involve painful and relent-less retaliation. Helping the individual in these situations also serves society, because the authorities frequently get access to information that would otherwise remain buried.
The DTSA whistleblower amendment seeks to bal-ance these concerns against the legitimate interest of the employer in its corporate secrets, by limiting the protected disclosure, made in confidence, to (a) an attorney or gov-ernment official, for the purpose of reporting or investigat-ing a violation of law, or (b) a filing made under seal in a lawsuit “or other proceeding.” Immunity is provided under federal or state law against any claim for violation of the individual’s nondisclosure obligations. In order to ensure that employees (a term that also includes contractors) know about their rights, employers are required to give an ap-propriate notice in the nondisclosure agreement (as is often done now with state inventor statutes), although this can be a reference to the company’s separate policy document. A failure to comply with the notice provision would block any award of attorneys fees or enhanced damages against an employee under the DTSA. Significantly, the whistleblower protection would not immunize any otherwise improper acts by the employee, such as hacking information in viola-tion of the Computer Fraud and Abuse Act.
(Employment Law, continued from page 9)
(Continued on page 14)
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The Marin Lawyer
(Continued on page 12
Top Ten Privacy Law Pointers For LawyersBy Beth Arnese
Privacy law is an area of law gaining increasing visibility and relevancy. As the internet, electron-ic transactions, and the sharing of personal or sensitive data increase, resulting regulations governing this
data also increase,1 the result is an increasingly relevant area of law – privacy law – that has special significance for attorneys and their clients.
What Is Privacy Law, and Why Does It Matter?Privacy law deals with personal data and the use of
that data: the regulation, storage, and protection of infor-mation about individuals. It is a multidisciplinary field of law, impacting any business that collects information from customers, clients, employees, or other businesses, in any form. For example, privacy law impacts a small cafe that takes payment card information. It also impacts the cafe when it collects information to process an employee’s pay-check. On a much larger scale, a company like Amazon is impacted by privacy laws regulating what a business can collect from consumers via its website, how it must protect such information (generally from an IT perspective), and to whom it must report when such information is breached (think the recent Target data breach).
The Health Information Privacy Accountability Act (HIPAA), which deals with medical privacy, is a classic privacy law, as are laws that specify what information a company can collect online, such as the Children’s Online Privacy Protection Act (COPPA). Most laws about market-ing are considered privacy law, as they regulate when and how you can use people’s information to contact them (via
email, mail, and phone). The CAN-SPAM Act (regulat-ing what businesses can do with emails) and Do Not Call laws are classic privacy legislation. In short, any time you are collecting, giving away, or using personal information, you’ve entered the realm of privacy law.
Why Are Law Firms Subject to Privacy Law?On a big-picture level, lawyers should understand that
lawyers and law firms have to comply with privacy laws. Lawyers often have very sensitive, confidential information stored on their mobile devices, networks, and computers.
Depending the practice area, lawyers may be gather-ing highly sensitive or confidential information from their clients or other sources. The specifics, of course, will vary depending on the nature of the law practice, but below are some practical considerations for all lawyers.
Top Ten Privacy Practices for Attorneys 1. Several free or lost-cost programs allow a subscriber
to send encrypted emails. Lawyers should consider using this type of software if they send email with private or confidential information. Some examples of these services include Tutanota and Virtru.
2. Law firms should post a privacy policy on their website. California state law requires a posted privacy policy on commercial web sites that collect personally identifiable information. If the website allows visitors to sign up for webinars, newsletters, or contact an attorney (and thus provide their contact information), the site needs a privacy policy. The California Online Privacy Protection Act of 2003 (CalOPPA), requires businesses to conspicu-ously post a privacy policy and to actually comply with it or risk being penalized by the Federal Trade Commission for deceptive privacy advertising.
3. Lawyers should use security when using the in-ternet and should consider the risk of a data breach their devices and electronics might pose. Attorneys often have confidential information on their mobile phone or iPad, for example, and they should secure their devices at all times. Using password-protection on these devices is a bare minimum. Attorneys should also be careful of join-ing unsecured internet hotspots, should carry anti-virus protection on their phones, and should treat their mobile devices like they would a wallet – securing it physically at all times. Small businesses are 50 percent more likely than larger businesses to report a physical breach, or theft or loss of unencrypted data on electronic devices, so encrypting data on any mobile device, as well as on laptops, desktop computers, hard drives, and USB drives is a good practice.
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4. A firm or company should have a document retention policy that it follows consistently. After the time period for retaining records expires, a firm takes on additional risk for a data breach by keeping confidential documents on hand.
5. When a firm uses a cloud service, it should realize that it is still responsible for a data breach. Cloud services spend significant time and money to ensure that a data breach does not occur, so they are a good way to man-age risk. However, know that unless the firm asks for an indemnification clause from the cloud provider, the firm retains liability.
6. On a related note, firms should consider limiting access to private data, either via cloud or local hardware, to its employees who have a “need-to-know.”
7. When logging in remotely, firms should make sure they are doing everything they can to secure their systems such as using strong passwords and updating software. Firms should also consider additional security measures like firewalls, limiting users who can log in remotely, and setting an account lockout policy after a certain number of incorrect guesses.
8. Firms’ vendor contracts should address privacy and confidential information and be sufficiently protective of clients’ and employee information. Firms must not assume that vendors will take all necessary measures to protect sensitive information unless spelled out in contract.
9. Law firms may be “business associates” under HIPAA if they have access to the protected health informa-tion of their clients, or they may be covered entities if they administer their own health plan, for example. If the firm is a business associate or covered entity, there are extensive, technical requirements it will need to follow, including creating and sending onto to its vendors a business associate agreement (or signing one itself).
10. Malware and hacking present the greatest threat in terms of breaches of personal information to attorneys and other businesses. Malware can be delivered via “phish-ing,” which is used to deceive employees into clicking on an email that downloads malicious software. Firms should train employees to spot phishing emails and should upgrade new versions of browsers and other critical software when earlier versions are no longer supported and patched. The California Department of Justice recommends that all busi-nesses implement the Center for Internet Security’s Criti-cal Security Controls (available online). According to the California Department of Justice, failure to implement all
of the controls that apply to an organization’s environment constitutes a lack of reasonable security. In addition, when firms become aware of a security breach, they should fol-low legally required procedures. For example, California law requires a business to notify any California resident whose unencrypted personal information was acquired, or reasonably believed to have been acquired, by an unauthor-ized person.
Privacy law, like technology, is constantly and rapidly evolving. Attorneys should understand enough about this vital area of the law so that they can protect themselves, their staff, and their clients.
Beth Arnese is an employment and privacy law at-torney, providing advice and counsel, privacy compliance, workplace complaint investigation, and litigation services to companies throughout the Bay Area. Beth received her J.D. from UCLA School of Law in 2005. She can be reached at [email protected].
1 Either intentionally via social media or unintentionally via data breaches.
(Top Ten, continued from page 11)
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California Women Lawyers & The National Association of Women Judges Present:
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ConclusionSometimes narrow provisions of federal laws can
have a profound effect on state law practice. While the “threatened misappropriation” language in the DTSA will not change California’s rejection of the “inevitable disclosure doctrine,” it should influence – even in state courts applying California’s Uniform Trade Secrets Act – the analysis of what it takes to prove an implied “threat” by an employee that could imperil an employer’s trade secrets. And the DTSA’s whistleblower provisions will for the first time grant a real safe harbor to the employee who has evidence of criminal activity inside a company but has signed a confidentiality agreement that would otherwise make blowing the whistle a perilous act.
Besides his well-known legal treatise Trade Secrets, Jim Pooley is the author of a new book, Secrets: Manag-ing Information Assets in the Age of Cyberespionage. Jim recently completed a five-year term as Deputy Director General at WIPO in Geneva, running the international patent system. He now provides independent advice on patent and trade secret strategy, dispute resolution, and information security in Silicon Valley. www.pooley.com.
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(Employment Law, continued from page 10)
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Tues, May 10: 12:00-1:30 PMLabor & Employment Section MeetingSubstance Abuse IssuesSpeaker: David Mann, The Other BarRagghianti Freitas, 1101 5th Ave, San RafaelCost: $10 Section Members / $20 Non-MembersBrown Bag Lunch, 1 CLE Credit, Substance AbuseRegistration & InfoContact: Sarah Wright, [email protected]
Wed, May 11: 12:00 – 1:30 PMReal Property Section MeetingBankruptcy Solution for Real Estate LawyersSpeaker: Michael St. James, Esq., St. James Law, P.C.1 hour CLE, generalResolution Remedies, 1000 4th St, San RafaelCost: $30 Section Members / $20 Members 5 years or less in practice / $40 Non-Section MembersRegistration & InfoContact: Tracy Wilson [email protected]
Wed, May 11: 12:00 – 1:00 PMProbate & Estate Planning Section MeetingMarin County Probate Court Speakers: Hon. Faye D’Opal & Hon. Mark TalamantesLocation: Marin County Superior Court, Dept. CBrown Bag Lunch, 1 hr. CLE, generalRegistration & InfoContact: Anne Reilly [email protected] or Dan Furhman [email protected]
Tues., May 17, 2016: 12:00-1:30 PMFamily Law Section MeetingWho Keeps the House after the DivorceSpeakers: Kathleen Nemetz, Certified Financial Planner; Sandra Acevedo, Family Law Attorney; Jodi Fischer, Mortgage Banker; & Ron Moss, CPAMarin County Courts, Courtroom HCost: Free, Members / $10 Non-MembersBrown Bag Lunch, 1 CLE CreditRegistration & InfoContact: Abby Lucha, [email protected] or John Brekhus, [email protected]
Tue, May 17: 12:00 – 1:30 PMProbate & Estate Planning Mentor MeetingLerman Law Building, 802 B Street, San Rafael RSVP to Michelle Lerman [email protected] or Debra Whitehouse, [email protected]
Wed, May 18: 12:00 – 1:30 PMADR Section MeetingThe Good, The Bad, The UglyConsumers’ Views on MediationSpeakers: Erica Villanueva, John FederCost: $20 members / $30 nonmembers Location: Resolution Remedies, 1000 4th St, San RafaelRegistration & InfoRSVP: [email protected]
Wed, May 25: 11:45 AM – 1:30 PMMCBA Members LuncheonServing Veterans in the Criminal Justice SystemSpeaker: Sean Stephens, Veterans Services Officer for Marin CountyCost: $40 members / $50 nonmembersLocation: San Rafael Joe’s, 931 4th StRegistration & Info, 1 hr. CLE, generalContact: [email protected] Tues, June 14: 12:00-1:30 PMLabor & Employment Section MeetingEthics and Professional ResponsibilitySpeaker: Samuel BelliciniRagghianti Freitas, 1101 Fifth Avenue, Suite 100Cost: $10 Section Members / $20 Non-MembersBrown Bag Lunch, 1 CLE Credit, EthicsRegistration & InfoContact: Sarah Wright, [email protected]
Wed, June 29: 11:45 AM – 1:30 PMMCBA Members Luncheon2016 Update on U.S. Supreme Court RulingsSpeaker: Professor Rory LittleCost: $45 members / $55 nonmembersLocation: Club at McInnis250 Smith Ranch Rd. San RafaelRegistration & Info, 1 hr. CLE, generalContact: [email protected]
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