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November Propositions | California Ballot Initiatives' Pros & Cons Part 1 of 2

Los Angeles Environmental AttorneyLos Angeles Environmental LawyerStephen T. Holzer
September 11, 2012

Los Angeles Environmental Attorney

 

Eleven Propositions will appear on the ballot in November. Though the Secretary of State's (SOS's) office has them all listed on their website, we thought it would be a good time to take a look at the pros and cons of each measure.

In this blog, we'll examine the first six of the 11 propositions we'll see on the 2012 ballot. We'll tackle the remaining five, Props 36-40, next week.

To read the Official Title and Summary prepared by the Attorney General, simply click on each numbered Proposition – you'll be hyperlinked to the appropriate page on the SOS website. We also provided links to the main groups opposing and supporting each proposition, where you may find more than the three reasons we listed to vote either for, or against, a particular proposition.

Proposition 30Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding. Initiative Constitutional Amendment.

 

This is the Governor's proposal to increase income taxes on taxpayers earning over $250,000/year and to increase the State sales tax by ¼ cent for four years.  Eighty-nine percent of revenue raised would go to K-12 education and the remaining 11 percent would go to community colleges.  According to the Secretary of State's summary, the Proposition would also guarantee funding for public safety services which are being realigned from the State to local governments. 

Prop 30 Opposition:

Primarily sponsored by the National Federation of Independent Business California, the Small Business Action Committee, and various Chambers of Commerce and Taxpayers Associations, the naysayers to this proposition claim:

1. The Prop raises sales and income taxes on ALL Californians.

2. It won't generate new funding for schools.

3. Prop 30 destroys small business and kills jobs.

Prop 30 Support:

The Yes on 30 movement is primarily sponsored by California university organizations, state law enforcement associations, and various community and business groups. They say Prop 30 will:

1. Prevent about $6 billion in school cuts, and provides additional funding.

2. Constitutionally guarantee local public safety funding.

3. Help balance the budget.

Proposition 31State Budget. State and Local Government. Initiative Constitutional Amendment and Statute.

 

This measure proposes a number of intriguing budget tweaks.  Proposition 31 prohibits the Legislature from creating expenditures of more than $25 million without either also creating equivalent revenues or identifying equivalent spending cuts. 

The Proposition also gives the Governor the authority unilaterally to cut the Budget during fiscal emergencies, provided that the Legislature has been given a chance to act but fails to do so.  Further, the measure requires that all bills be publicized at least three days prior to any vote.  Finally, the Proposition gives Counties the authority to alter State statues and regulations dealing with spending unless the Counties' alterations are vetoed by the Legislature within a two-month period. 

Prop 31 Opposition:

The No on 31 faction includes the California Labor Federation, California Federation of Teachers, the League of Women Voters, and other organizations. They complain that Prop 31:

1. Is poorly written, leading to lawsuits instead of reform.

2. Shifts $200 million from education and other vital services to fund experimental programs.

3. Leads to a more cumbersome, slower government.

Prop 31 Support:

This measure is supported by the California Republican Party, and a group called California Forward, which claims to transform government through citizen-driven solutions. Prop 31 Supporters say the ballot measure:

1. Forces politicians to be accountable by giving lawmakers and the public time to review legislative proposals.

2. Makes State and Municipal governments clearly identify the benefits of new and existing spending.

3. Benefits business by stabilizing the budget and requiring government at every level to set goals and measure progress.

 

Proposition 32Political Contributions by Payroll Deduction. Contributions to Candidates. Initiative Statute.

 

If passed, Proposition 32 would restrict the unions' political fundraising by prohibiting the use for political advocacy of monies deducted for union purposes from employee paychecks.  Such use would be permitted only if the employee consents in writing on an annual basis. 

The Proposition imposes a similar restriction on corporations' use of payroll deductions.  However, even in the absence of voluntary payroll contributions, corporations would still be free to spend money on political advocacy so long as the expenditures come from other sources of revenue.

Prop 32 Opposition:

Labor unions, particularly those for public employees, constitute the key groups leading the opposition. Among other charges, they claim the proposition will:

1. Place restrictions on union workers while creating special exemptions for corporate interests.

2. Give corporations and lobbyists greater influence.

3. Empower insurance companies, real estate investors and other wealthy supporters to contribute directly to political candidates.

Prop 32 Support:

Supporters of this ballot say Prop 32 reduces the influence of special interest groups because it will:

1. Stop special interest from taking automatic wage deductions from employee paychecks for political purposes..

2. End special treatment by politicians awarding government contracts to companies who make financial contributions to their campaigns.

3. Break the union hold on politicians and government.

 

Proposition 33Auto Insurance Companies. Prices Based on Driver's History of Insurance Coverage. Initiative Statute.

 

Proposition 33 if enacted, would permit insurance companies to set premiums based on whether the insured previously carried auto coverage with any insurance company. Also, premiums could be raised where the driver did not previously carry continuous insurance (except for lapses of 90 days or less, lapses caused by military service and lapses due to employment loss). 

Prop 33 Opposition:

The biggest opponents to Prop 33 are from Consumer Watchdog, an organization billing itself as a nonprofit dedicated to providing a voice for taxpayers and consumers, and the California Democratic Party. They claim the measure will:

1. Unfairly punish people who stop driving for legitimate reasons, such as unemployment.

2. Hurt drivers who drop coverage while in college, or who temporarily explore other means of transportation (public transit, bicycling to work, etc.).

3. Lead to higher uninsured motorist premiums for all insured drivers.

Prop 33 Support:

According to Drew Joseph of the San Francisco Chronicle, 99 percent of the funding for Prop 33 comes from the chairman of Mercury Insurance, George Joseph. Vocal proponents include the American Agents Alliance and the California Republican Party, who say Prop 33:

1. Rewards California drivers who are always insured by offering them discounts for continuous coverage, even when they switch insurance companies.

2. Empowers continuously covered drivers to shop for better insurance rates.

3. Does not, as the Prop 33 opponents claim, punish drivers who discontinue insurance due to layoffs, for up to 18 months.

 

Proposition 34Death Penalty. Initiative Statute.

 

Proposition 34 aims to abolish the death penalty and substitute life imprisonment as the harshest criminal penalty meted out by the State.  The measure would apply retroactively to any prisoner already sentenced to death, and would require those sentenced to life in prison to work in their prison facility, with wages going to the victims’ families. Prop 34's initiators estimate state savings of over $100 million a year as a result of not having to prosecute expensive trials and defend against appeals.

Prop 34 Opposition:

Not surprisingly, a number of victims' families and district attorneys are against Prop 34. They attest that:

1. Studies regarding cost savings to the state are misleading and inflated, as the data was written or collected by the writers of Prop 34.

2. The people on Death Row are serial killers, cop killers and rapists, who may find their way out again if Prop 34 passes.

3. The Death Penalty system should be fixed, not abolished – they recommend using a single drug for executions as well as mending the Appeals Process.

Prop 34 Support:

Those in favor of this proposition carry some weight, including the American Civil Liberties Union, the California Democratic Party, the California Catholic Conference of Bishops – and individuals such as Gil Garcetti and Antonio Villaraigosa. They say:

1. California tax payers will save $130 million per year by imprisoning criminals for life rather than executing them.

2. Convicted criminals will be required to work and pay restitution to a victims' fund.

3. Innocent people are sometimes wrongfully convicted of, and executed for, serious crimes.

 

Proposition 35 – Human Trafficking. Penalties. Initiative Statute.

 

This Proposition would increase penalties for human sex trafficking.  Prison would be for 15-years-to-life and fines could be up to $1.5 million per offense. The measure would prohibit the sex trafficking victim’s consensual sexual history to be used against that person in legal proceedings and would also require the police to undergo human-trafficking training.  Cost to State and local governments would total several million dollars a year. 

Prop 35 Opposition:

Believe it or not, there are a few voices raised against this Proposition, including the California Coalition for Women Prisoners. The CCWP says:

1. The measure can be used as a pretext to label sex workers as pimps and traffickers, which will deter these workers from seeking help when subjected to violence.

2. Prop 35 increases police power to detain and interrogate people under a pretext of looking for trafficked individuals.

3. The Prop gives a vested financial interest to victims' services and non-profit agencies that work with law enforcement, in the form of fines charged to convicted traffickers.

Prop 35 Support:

Several attorneys general and district attorneys are in favor of Prop 35, and are backed by both California's Democratic and Republican Parties. Also on board are actress Jada Pinkett Smith, former Privacy Chief of Facebook, Chris Kelly, and the president of the California Police Chiefs Association. Supporters claim the Prop will:

1. Deter traffickers with higher penalties and fines.

2. Use fines to fund services for victims.

3. Require convicted traffickers to register as sex offenders.

That wraps up the first six of the 11 Propositions California voters will see on the November ballot. We'll look into the remaining five, Propositions 36-40, next week. We'll also post information about the Los Angeles County ballot measures as we get closer to election day.

 

Stephen T. Holzer is a Business Litigation Attorney, and Chair of our Environmental Practice Group. Contact him via email: sholzer@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Tuesday
Sep042012

Top Attorneys in Business Law | Stephen T. Holzer & Sue M. Bendavid Named

Top Attorneys in Business - Environmental Law Top Attorneys in Business - Employment Law

by Lewitt Hackman
Sepetember 4, 2012

Two Lewitt Hackman attorneys were featured in this year's Super Lawyers Business Edition as top attorneys in their respective practice areas.

Stephen T. Holzer is named for his work in Environmental Law, and Sue M. Bendavid is named for her work in Employment Law – both lawyers are veteran attorneys and Chairs of their Practice Groups at our firm.

To be named a Top Attorney in Business Law, the selection team reviews nominations from more than 8,500 law firms around the nation and then employs 12 measurements of professional achievement and peer recognition to narrow the pool. It's a multi-stage process involving firm size and individual point totals.

Steve began his practice in real estate issues and business litigation in the 1970s, and in the early 1980s began a concentration in representing clients with land and water pollution issues.

Sue represents employers in all types of employee matters including claim prevention and litigation. Sue has defended numerous class action claims, as well as lawsuits alleging harassment, discrimination, wrongful termination, wage and hour violations and more.

Both attorneys have been named Southern California Super Lawyers for over five years, have received numerous awards from civic and business organizations throughout Los Angeles, and are rated AV 5.0 Preeminent by Martindale-Hubbell – the highest rating awarded by peers of the bar and judiciary for legal ability and ethics.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Thursday
Aug302012

Competition and Contract Breaches: How Business Sales Affect Noncompete Covenants

 

by Stephan Mihalovits

One latest political football seems to be the role government plays in either stimulating or stymying free enterprise. We usually associate government with burdensome regulation that handcuffs business.

But contrary to our predetermined bias, in a recent case, the California Court of Appeal reaffirmed free movement of labor in the state by nullifying noncompete covenants in employment contracts, even where the covenant is part of the sale of a business.

It is bedrock law in California that noncompete covenants are generally not enforceable. Business & Professions Code Sec. 16600 states “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” 

This means a company cannot generally prevent an employee through contract from working in the same profession or industry after she or he is no longer employed by the company. But many companies would argue such covenants are entirely justifiable.

Businesses have legitimate reasons for seeking to bind their future former employees. They hire employees and invest in their skills. Investments take many forms, including the time and money involved in paying for training and continuing education. Investing always takes varying amounts of time and money, and companies are often happy to invest, as long as the investment is a good bet.

A business may justifiably seek to prevent an employee from using training the company paid for in order to gain employment with a rival competitor.

The employee may have learned confidential trade secrets that may be divulged if the employee worked for a competitor, no matter if the company secured a nondisclosure agreement. Accordingly, businesses use noncompete covenants to prevent employees from divulging and using trade secrets.

 

Lawful Noncompete Covenants

 

Despite these legitimate interests in favor of covenants not to compete, such provisions are generally not enforceable. But California established two limited exceptions. Noncompete covenants can be lawful if either the covenant occurs in connection with the sale of a business, or in connection with dissolution of a partnership. (B&P 16600-16602).

The rationale behind the business sale exception goes to the value of the business during and after a sale.

Suppose a dentist pays a lot of money to buy a popular, retiring dentist’s business. The value of the business depends on the selling dentist retiring and not offering more services to his customers.

Now suppose after the sale the seller spontaneously comes out of retirement and establishes a new practice in the same geography. The business the buyer bought is now worth far less, because the seller’s customers will likely return to their former dentist. To protect the value of the asset, the buyer dentist is allowed to contract that the seller not be able to compete for a certain number of years.

In the recent case of Fillpoint, LLC v. Maas, et al., (August 24, 2012), the Court of Appeal concluded a noncompete covenant was unenforceable, even when arguably in connection with the sale of a business.

In Fillpoint, Michael Maas sold all his shares of Crave Entertainment Group to buyer Handleman Company. As part of the sale, Maas agreed not to compete with Handleman for three years. At the same time, the two sides entered into a written employment agreement where Maas:

(1) agreed to work for Handleman for three years, and

(2) agreed not to compete for one year after he eventually left. Maas left after completing the three-year agreement and went to work for a competitor. Handleman then sued to enforce the one-year noncompete covenant.

But the Court struck the covenant as unenforceable while upholding the three-year covenant, which was already completed. The three-year covenant was enforceable as directly related to the sale. The buyer paid Maas for his share of the Crave business based partly on the premise that Maas would not compete with Crave for three years.

But the one-year covenant dealt only with the employment agreement. There was no legal justification for prohibiting Maas from working for whomever he chose once he satisfied the three-year covenant. Since there was no connection to the sale, given the general rule of prohibition, the Court struck the one-year noncompete covenant as unenforceable.

The message of Fillpoint is that free movement of labor is alive and well in California, and even may trump California’s equal fondness for freedom of contract. Parties are generally permitted to contract to whatever they wish, within reason. But even with employment agreements entered into as part of a business sale, contracts will not prevent workers from engaging in future competition.

Stephan Mihalovits is a Business Litigation Attorney who represents clients in employment, franchise and intellectual property law. Contact him via email: smihalovits@lewitthackman.com.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Thursday
Aug232012

Insurance Companies Behaving Badly: The Progressive Fiasco

Personal Injury SettlementsInjury Attorney

 

(818) 907-3254
by David B. Bobrosky

 

Thanks to social media, the power is truly back with the people. 

It helped revive Betty White's career, thanks to a Facebook campaign by her fans. It got the Susan G. Komen Foundation to rethink its decision to cut funding for Planned Parenthood, and public outcry further prompted the resignation of five Foundation executives. Social media also sparked a movement to boycott Chick-fil-A, and then a counter-movement to support the chain, after the company president took a public stance for traditional marriage. 

 

Personal Injury Free ConsultationClick image to contact us for a free consultation.

Regardless of what side of these issues you fall, social media has proved to be powerful. Now, Progressive Insurance is the latest to be feeling the pain of public outcry in social networking forums. 

It started in 2010, when Progressive client Katilynn Fisher was killed in an automobile accident in Baltimore. Among other things, her insurance policy covered her for accidents with uninsured or underinsured drivers.

Nationwide Insurance covered the other driver, and promptly paid out its policy limits of $25,000 to Fisher's estate.

Under Fisher’s underinsured policy with Progressive, there was another $75,000 available to the estate.  A total of $100,000 certainly seems like nothing for the death of a loved one, but that’s all that was available.  To make matters worse, Progressive refused to pay out even the $75,000, claiming Fisher may have been at fault for the accident.

Apparently, in the State of Maryland, if your insurance company refuses to settle your underinsured motorist claim, you must prove your damages against the other driver first in court. In this case the other driver’s company had already paid its own policy limits.  Nevertheless, Progressive still fought the family. 

In California, it would be a little different.  After recovering the third party policy, an insured could demand arbitration against its own insurance company if it refused to pay on the underinsured policy.

Progressive refused to settle the matter for anything more than a third of the policy, and then set out to defend the other driver even though he appeared to be at fault.

This prompted Fisher's brother, Matt Fisher, to post a blog about the insurer on August 13th entitled My Sister Paid Progressive Insurance to Defend Her Killer in Court:

Here I address you, Prospective Progressive Insurance Customer: someday when you have your accident, I promise that there will be enough wiggle room for Progressive’s bottomless stack of in-house attorneys to make a court case out of it and to hammer at that court case until you or your surviving loved ones run out of money.... Which is what Progressive decided to do to my family. In hopes that a jury would hang or decide that the accident was her fault, they refused to pay the policy to my sister’s estate. 

Rather than accepting responsibility for its actions, Progressive posted a response to Matt Fisher’s blog.  Progressive stated:

            “Progressive did not serve as the attorney for the defendant.”

On August 14th, Fisher posted a response to a statement by the insurer.  Fisher pointed out that the Progressive attorney sat at counsel table during the trial, presented an opening statement, questioned the witnesses, and presented the closing argument.  As Fisher stated, he was “comfortable characterizing this as a legal defense.”

The posts earned the case some national media attention. Fisher was invited to appear on national television and Progressive's Facebook page saw an onslaught of negative commentary.

A circuit court in Maryland awarded $760,000 to the Fisher family. Progressive paid the $75,000 it owed to begin with, and then paid an additional undisclosed settlement for the way the company handled its own insured’s claims.

Had Progressive treated its insured fairly, it would merely have paid the $75,000, and saved the insured’s family additional grief. Instead, Progressive paid significantly more and put the family through additional anguish.

I’d like to think Progressive, and other insurers, have learned a lesson here…but we know they probably haven't. Insurance companies will continue to do whatever they can to pay out as little as they can on all claims.

David B. Bobrosky is a San Fernando Valley Personal Injury Attorney and avid safe driving proponent. Contact him via e-mail: dbobrosky@lewitthackman.com

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Thursday
Aug162012

Social Security Benefits | 10 Retirement FAQs

Trusts & Estate Planning

by Kira S. Masteller
818.907.3244

 

We've all heard about the financial difficulties engulfing our nation's Social Security program.

Decades ago, there were nearly five workers paying into Social Security for every one person receiving benefits. Today, there are nearly three workers paying into the program for every one beneficiary, and that ratio is steadily decreasing.

But according to the Associated Press, we have over two decades before Social Security beneficiaries will see a cut in benefits, and there's some (albeit slim,) hope that Congress  will overcome the deficit hurdles in that time. Whether or not a viable cure for the program's ills can be found, it still may be strategic for baby boomers retiring in the next few years to wait to file for benefits.

But how do you know what to do and when to file?

Here are 10 Frequently Asked Questions regarding your filing for Social Security, whether your household has one working spouse or two.

 

Retirement Planning: Social Security Retirement Ages & Benefits

 

1. Why do people defer their Social Security benefits to age 70 when they can receive checks at age 66?

Under the current program, deferring the payments increases the benefits by eight percent annually. 

 

2. Why take benefits at an earlier age?

Consider your health. Currently, men who are aged 65 today can expect to live to 83, while 65 year old women can expect to live to 85. These are merely averages. If you think you are in poor health, you may want to take your Social Security benefits now, rather than wait until you are 70. 

 

3. Is a spouse who never worked entitled to a spousal benefit at age 66?

Yes. Spouses without a work history are entitled to half of his or her working spouse's benefit, but can't collect until the working spouse elects to receive his or her own benefit. 

 

4. CAN A WORKING SPOUSE DEFER A BENEFIT TO AGE 70, BUT ENABLE THE NON-WORKING SPOUSE TO COLLECT A SPOUSAL BENEFIT AT AGE 66?

Yes. The working spouse may "elect and suspend" Social Security benefits, which allows that working spouse to wait for the higher benefit at age 70, and still allow the non-working spouse to collect benefits at age 66. 

 

5. What if the non-working spouse doesn't collect benefits at age 66?

The spousal benefit deferred won't mean bigger checks. But a non-working spouse who waits to file for benefits may file for retroactive benefits. 

 

6. If one working spouse who earned less defers the benefit to age 70, and the other working spouse earned more but opted to take benefits at age 66 – can the deferring spouse receive a spousal benefit?

Yes. The deferring spouse can take a full spousal benefit, or 50 percent of the benefit of the spouse who is receiving Social Security at age 66, which won't affect or diminish the deferred benefits. 

 

7. Will the working spouse who opted

for benefits at age 66 be entitled to a spousal benefit when the deferring spouse turns 70?

Yes, though that spouse should ask the Social Security Administration to determine whether or not taking the spousal benefit would be beneficial. 

 

8. What if both spouses earned high incomes throughout their work histories?

You can still use the "elect and suspend" option above. The spouse who took the spousal benefit gets four additional years of income, and their own higher benefit at age 70. 

 

9. If both working spouses plan to defer to age 70, can each spouse elect to receive spousal benefits?

No. A married couple may only receive one spousal benefit at a time. 

 

10. What if I was forced to retire, but didn't really want to?

The Social Security Administration will allow you to collect benefits for up to a year, and pay them back so that you can receive higher benefits later. You can only do this once though, so when you retire after the first time, make sure you are ready!

According to the Social Security Administration website, the first person to receive monthly retirement checks from Social Security paid into the program for three years. Ida May Fuller's accumulated taxes in that period totaled $24.75. Fuller's first retirement check totaled $22.54, but since she lived to be 100 years old, she collected over $22,000 in Social Security benefits in her lifetime.

None of us will get that large of a return on our Social Security taxes anymore. But with a little planning for the future we may still make the best of retirement.

 

Kira S. Masteller is an estate and gift tax planning attorney. E-mail her at kmasteller@lewitthackman.com. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
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