Articles Posted in Business Litigation

Public policy in California dictates that businesses should be free to compete against each other in the marketplace. Competition among businesses greatly benefits consumers. At the same time, competition engenders higher quality goods and higher service quality at price points advantageous to the consumer. Toward that end, California’s antitrust law, known as the “Cartwright Act,” prohibits a wide variety of conduct designed to restrain competition in the marketplace.


The San Jose business lawyers at Structure Law Group, LLP dedicate their practice to helping business owners grow their company while insulating them from harm.  Unfair competition has a negative effect on consumers and businesses. Business entities should avoid structuring agreements which arguably cause unfair competition. Failure to do so could subject those businesses to lengthy and costly litigation and expose them to potential damages.

According to California business, trusts are unlawful and against public policy. California law defines a trust as a “combination of capital, skills, or acts by two or more persons” to:

The exchange of cash for payment for a goods or services is rare these days. We have certainly become a digital society. Business make advances daily to make transactions more efficient and convenient. However, businesses engaging in e-commerce must not compromise security for expediency. Additionally, businesses store infinite amounts of personal data about their customers. These businesses, such as health care providers and health insurance companies, not only must safeguard their electronic transactions but must also secure sensitive information and proactively combat data breaches. Failure to do so can lead to a huge economic loss for the customers and the company. The savvy business attorneys at Structure Law Group, LLP advise businesses on the best practices to prevent data breaches and counsel them on the necessary steps to take if such an unfortunate event occurs.


In California, people have a constitutional right to the safety and integrity of their personal information. California’s information security act defines personal information as any information that could identify or describe a person. Personal information is also an individual’s name, address, social security number, license number, medical information, and the like. A business in possession of such information must take reasonable steps to prevent disclosure of private information. California law obligates businesses to implement security measures reasonably designed to protect the integrity of the private information. Every business entity, from a sole proprietorship to a multi-national corporation is subject to the information security act.

California law broadly defines “data breach.” Data breach includes any “unauthorized acquisition of computerized data that compromises the security, confidentiality, or integrity of personal information maintained by the person or business.” The information may be used in good faith for the benefit of the person whose information is disclosed, provided that such disclosure is authorized.

A “fraudulent,” or more accurately “voidable” transfer, is a transfer by a party (the “debtor”) of some interest in property with the goal or effect of preventing a creditor or creditors from reaching the transferred interest to satisfy their claim or claims.

Signing contract
What Law Governs “Fraudulent” or “Voidable” Conveyances/Transfers?

Fraudulent conveyances are governed primarily by the Uniform Voidable Transactions Act (UVTA), which replaced the Uniform Fraudulent Transfer Act (UFTA) in California as of January 1, 2016.  The UVTA applies to transfers made or obligations incurred after January 1, 2016.  The UFTA will continue to apply to transfers made or obligations incurred prior to January 1, 2016.  One of the most noticeable changes made in the UVTA is the removal of the word “fraudulent” from the title and body of the act. This change emphasizes that a transfer may be, and often is, voidable even in the absence of any sort of improper intent by the debtor or the transferees.

Businesses must endeavor to guard their trade secrets jealously. Failure to do so can wreak havoc upon development and growth. It will also give competitors a leg-up in the marketplace. Knowing and understanding California’s trade secret law is therefore critically important. Implementing multiple safeguards to prevent trade secret disclosure is necessary. If a business fails to implement reasonable safeguards to prevent trade secret misappropriation, then the business may be without recourse in court. Working closely with experienced business attorneys to develop the appropriate security measures to prevent trade secret theft could prevent disaster from striking. The San Jose San Jose business attorneys at Structure Law Group, LLP (in San Jose and Oakland) have extensive experience counseling businesses on how to best protect their trade secrets and defending businesses against trade secret misappropriation in court.


California’s Uniform Trade Secrets Act (“UTSA”), which follows the Uniform Trade Secrets Act adopted in 48 states, defines a “trade secret” as “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (Ca. Civil Code §3426.1.)

In order to assert a claim for misappropriation of trade secret information, the owner of the trade secret information must identify its trade secret with sufficient specificity so that the information is separate from areas of general knowledge. For example, customer lists, marketing plans or pricing concessions are examples of broad categories of trade secret information. Or, the trade secret can be highly specific, such as a newly designed manufacturing process or the recipe for some sugary carbonated beverage, such as the recipe for Coca-Cola.

When you enter a contract with a provider, a client, or another business setting forth the terms of your business deal, you expect the other party to abide by the terms of the contract. If the other party fails to adhere to the terms of your business agreement, it can cost you time and money and can be infuriating, especially if you have performed your obligations under the contract or the breach of contract costs you money or future business. Business owners harmed by another party’s breach of contract often want to immediately march into court and file a lawsuit against the breaching party. However, this is often not the best or most advantageous course of action and often may even constituted a breach of contract by you. If you believe that a contract has been breached, consider promptly consulting with a qualified attorney to evaluate the contract and assess rights and legal options.

Have Your Attorney Negotiate with the Other Party

Often, a party may not realize that they have violated or are not in compliance with the terms of a contract and may not understand the potential liability they face for having breached or being in non-compliance with the agreement. Many times these issues can be remedied, putting the aggrieved party in a much stronger legal and negotiating position. It may then make sense for your attorney to reach out to the other party to attempt to resolve the dispute prior to commencing a lawsuit.

If your business employs at least one person, you should be thoroughly familiar with both the California and federal wage and hour laws. These laws regulate many aspects of employment from minimum wage to guaranteed rest and meal breaks. One important part of compensation that is regulated by wage and hour laws is overtime payments for individuals who work more than 40 hours per week.


Overtime laws entitle certain employees to time-and-a-half payments for additional hours worked. However, not everyone is entitled to overtime and the laws that regulate overtime exemptions can be complex. One important rule under the Fair Labor Standards Act (FLSA) is that anyone who earns less than $455 per week for full-time work ($23,660 annually) is automatically entitled to earn overtime. If employees earn more, a closer examination into their job duties must be made. In addition, once an employee earns $100,000 annually, they are considered to be “highly compensated” and no longer have the right to overtime provided his or her job duties meet certain minimum requirements.

The Department of Labor updated the overtime rules with regard to the income threshold and the new rules will take effect on December 1, 2016. The new threshold for automatic entitlement to overtime will be $913 per week for full-time work ($47,476 annually) and the new highly compensated threshold will be increased to $134,004. It is estimated that over four million people will receive a new entitlement to overtime.

Starting a business with a partner can be highly beneficial: collaborations offer many benefits and are particularly popular with startups and firms providing professional services. When you start a business with another person or people, the last thing you expect is to end up in a disagreement about business ownership. Unfortunately, these kinds of disputes arise on a regular basis and can have a significant impact on the success of your business as well as your personal bottom line.

Business disputes can arise in a variety of contexts – here are some of the most common situations:

  • A party may attempt to assert authority which he or she does not have

Businesses are not immune to making mistakes, and many businesses will at some point be served with a lawsuit. Being sued is, without a doubt, very stressful. However, if you find yourself in this situation, you should ensure that you act in a manner that preserves your legal rights and positions while allowing for the best possible outcome. Here are some things that you should consider:

Seek Legal Assistance. Do Not Tackle Business Lawsuits Alone.

Businesses faced with potential lawsuits may not fully consider the potential negative fallout that may occur as a result of the litigation. Some businesses may be very concerned with the expenses that would be required to defend the suit. However, do not make the foolish decision of not obtaining legal counsel.

In a corporate merger or acquisition, it is important to ensure that both companies involved are on the same page early in the process. Mergers and acquisitions can be complicated and can require costly resources, so it is important to know what each party is prepared to offer before moving forward with the transaction. One way to ensure both parties are on the same page is to draft a letter of intent (LOI), which outlines the deal points of the merger or acquisition and serves as a type of “agreement to agree”.


The LOI should be carefully drafted by the purchasing company and submitted to the selling company and should set out important basic terms of the transaction. This letter is typically not viewed as a binding contract though that does not mean it should not be given careful consideration. When submitting an LOI, the buyer should put forth attractive though realistic terms. If it fails to do so, it could result in a breakdown in negotiations or a later legal dispute if the expectations set out in the LOI were not in good faith. On the other hand, the purchaser should fully realize that an LOI does not represent the final agreement and that the terms of the deal may change after due diligence is conducted. Because of the importance of an LOI to a merger and acquisition, you should always seek assistance from an experienced M&A attorney when drafting, reviewing, or negotiating the letter.

Provisions to Include in a Letter of Intent

Contracts are utilized in every type of business and every business owner should know that written contracts should be carefully drafted, reviewed, and negotiated before signing. However, not every business deal is memorialized in writing and many agreements are based on verbal interactions and a handshake. Just as with written contracts, legal disputes can arise over deals that were verbally made. When a disagreement arises, the first question is naturally: is an oral contract enforceable under the law?


Whether an oral contract is enforceable depends on several factors. The law requires that certain types of contracts be in writing in order to enforce the terms of the contract. Some contracts that may apply to businesses that must be in writing involve the following:

  • Contracts for the purchase or sale of goods that are worth more than $500;