Legal Updates

Employers Must Be Prepared To Implement New Meal And Rest Break Practice On Short Notice Now That The California Supreme Court Has Set A November 8, 2011 Hearing Date For Brinker

by Michael Kun

Some were beginning to wonder whether it would ever happen. After more than two years, the California Supreme Court has announced a hearing date in the much-awaited Brinker v. Superior Court case — November 8, 2011.

Unless the Court takes a detour, California employers should finally know the answer to a question that has long driven California’s billion dollar wage-hour class action industry — must an employer “ensure” that employers take meal and rest periods, or are they only required to make them “available” to employees.

Should the Supreme Court rule that employers need only make them “available,” wage-hour class actions will not grind to a halt. Plaintiffs’ counsel will merely change their allegations to allege that meal and rest breaks were not made “available.” But most employers should have valid defenses to such claims, and, perhaps just as importantly, they will not need to revise the way they operate.

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Counterfeit Goods: Significant Statutory and Punitive Damages

We have been following the line of cases dealing with counterfeit goods and the resulting damage awards, and note the most recent case from the Federal Court makes clear that a tougher approach to trademark  and copyright infringement can now be expected in Canada.  In Louis Vuitton Malletier S.A. v. Singga Enterprises (Canada) Inc., the Court awarded significant damage awards as well as punitive damages against the three defendant companies and their principals.

The Plaintiffs, Louis Vuitton and Burberry, hired a number of investigators to attend the stores and warehouses of the defendants Singga Enterprises Canada, Altec Productions and Guo (doing business as Carnation Fashion Company), as well as purchase items from their websites. While in attendance at the stores and warehouses, the investigators were shown and purchased a number of counterfeit items including handbags, sunglasses and jewellery, all of which contained unauthorized productions of the Louis Vuitton and Burberry trade-marks. The Plaintiffs were successful in showing that the defendants’ activities of manufacturing, importing, distributing, offering for sale and actual sale of bulk quantities of counterfeit and/or infringing items had been ongoing and, in the case of one of the defendants, had continued after the commencement of the proceeding and the motion for summary trial brought by the Plaintiffs.

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NLRB postpones notice posting requirement

On October 5, 2011, amid substantial criticism from Congress, and legal challenges by employer associations, the NLRB announced that it is postponing the effective date of its notice posting requirement to January 31, 2012.

Our August Alert on this subject said the following:

On August 25, 2011, the National Labor Relations Board (the “Board”) issued a final rule (the “Final Rule”), which requires employers to inform employees of their rights under the National Labor Relations Act (the “Act”). This Final Rule was designed to close a so-called “knowledge gap” in the workforce. The Final Rule contains minor changes from the Board’s Proposed Rule on this topic.

Click here to view our previous Alert regarding the Proposed Rule, “Ready or not, here they come – NLRB issues new Proposed Rule to revamp the union election process.” The Final Rule is expected to take effect on November 14, 2011.

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Fallout of New FDI Policy: “In built Options”– When Foreign Investments can become Loans


Section of the new FDI Policy states that only:

(i)         equity shares,

(ii)        fully, compulsorily and mandatorily convertible debentures; and

(iii)       fully, compulsorily and mandatorily convertible preference shares,

in each case with no in-built options of any type, would qualify as eligible instruments for FDI. Equity instruments issued/transferred to non-residents having in-built options or supported by options sold by third parties would lose their equity character and such instruments would have to comply with the extant external commercial borrowings (“ECB”) guidelines.

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Levelling the playing field

European Court signals change to territorial rules for broadcasters and download content providers

The European Court of Justice (ECJ) today gave its judgment in cases brought by the FA Premier League (FAPL) and its licensing partners against the sellers and users of satellite TV decoder cards shipped from Greece to the UK and used in British pubs to screen live Premier League games.

The ECJ, in a sweeping judgment, ruled that the FAPL could not prevent UK users from buying decoder cards in other European countries, and held that contract terms which the FAPL had with all its European broadcasters, and which tightly enforced territoriality, were unlawful and unenforceable.

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Electronic identity verification AML/CTF Act and Privacy Act amended

New laws commenced on 28 June 2011 permitting verification of an identity using information held by a credit reporting agency. AML/CTF reporting entities should amend their privacy consents if they want to use this method.  read more…

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Estate Planning Alert: Roth recharacterization may save tax — October 15, 2011 deadline nears

If you did a Roth IRA conversion in 2010, and the value of the Roth IRA has decreased since the date of that conversion, you may be able to recharacterize the Roth IRA to a traditional IRA before October 17, 2011.

Roth IRAs remain a very useful planning tool. However, recent drops in the stock market may cause you to reconsider a 2010 conversion to a Roth IRA. For example, if you converted a $100,000 traditional IRA to a Roth IRA in 2010, and that account is now worth $90,000, you are paying tax on $10,000 that you no longer own.

If you “recharacterize” the Roth IRA to a traditional IRA before the applicable deadline, you will not be required to pay the income tax on the 2010 Roth IRA conversion (or, if applicable, you will be entitled to a refund of the tax you already paid), and your IRA will be treated as a traditional IRA. In other words, by recharacterizing your Roth IRA, the Roth IRA conversion is undone. 

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Without question, it is more common to hear of Wrongful Dismissal, than Unfair Dismissal. Perhaps this is more due to ignoranceof the law, than anything else.

Notably, Sections 34 and 35 of the Employment Act makes provisionthus:

34. Every employee shall have the right not to be unfairly dismissed, as providedin sections 35 to 40, by his employer.

35. Subject to sections 36 to 40, for the purposes of this Part, the question whether the dismissal of the employee was fair or unfair shall be determinedin accordance with the substantial merits of the case.

For the full article, please click here.

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Fourth Edition of the Consolidated FDI Policy Released by DIPP

The Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India (“DIPP”) on September 30, 2011 released the fourth edition of the consolidated FDI Policy of India vide Circular 2 of 2011.

As per the DIPP, some of the major revisions to the FDI Policy:

1.         Exemption to Educational Institutions and Old Age Homes – FDI in construction development activities with respect to educational institutions and old-age homes has been exempted from the conditions imposed on FDI in Construction Development Sector, viz. the minimum area and built-up area requirement; minimum capitalization requirement; and lock-in period.

The exemption has been granted with an intent to augment the physical infrastructure (with respect to educational institutions as well as old-age homes) and bring it up to global standards.

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"Are you legally vulnerable?" Jim Boutrous and Jim Giszczak interviewed by Smart Business Magazine

Are you legally vulnerable?
Jim Boutrous and Jim Giszczak

A recent amendment to the Americans with Disabilities Act has lowered the threshold of who qualifies as disabled ? former distinctions are gone between a person with a disability who was recovering well and one who was not.

“The amendment has classified both as disabled under the statute,” says Jim Boutrous, attorney with McDonald Hopkins LLC in Detroit.

“Companies need to look at accommodation requests to see that if you are making an employment decision, you are doing it for legitimate bases, independent from the protected classification,” he says.

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