By IRA ROSENBLATT Guest Columnist This is one in a series of regular columns in which Valley attorney Ira Rosenblatt answers questions from readers concerning business law issues. Please e-mail your questions to [email protected] Q: Our company employs a large number of bilingual employees. A number of our non-Spanish speaking employees have expressed concerns about other employees conversing in Spanish. Apparently, some non-Spanish speaking employees feel uncomfortable since they don’t know if they are the topic of discussion. Can our HR department adopt an English only policy during work hours? A: The short answer is no. It is an unlawful employment practice to adopt or enforce a policy that limits or prohibits the use of any language in any workplace… unless the restriction is justified by a business necessity and employees are adequately notified of the restriction. (California Government Code Section 12951). Before you say “but my policy is justified by business necessity,” you need to know that section 12951 narrowly defines “business necessity” to include only those situations where (1) the restriction is necessary to the safe and efficient operation of the business; and (2) there is no alternative way to accomplish the purpose equally as well with a lesser discriminatory impact. The situation you describe clearly fails to meet either of these standards. You can, however, coach your employees to be sensitive to others’ feelings. In the end, I expect your employees will likely adopt their own corrective action. Q: Our company recently purchased a new building. All contingencies are waived, our financing is in line, and we are scheduled to close escrow in the next week or so. My broker recently heard that the seller was in escrow with another buyer for a higher price. The seller first denied it, but ultimately admitted they had in fact opened another escrow with another buyer at a higher price. The seller won’t tell me if the other escrow is scheduled to close before or after ours. What can we do now to protect our rights? We want this property! A: Unless your purchase and sale agreement expressly prohibits seller from accepting back-up offers, sellers are free to accept back-up offers. However, it is not clear from your question if the other offer is a back-up offer (which will only mature into an agreement if you fail to close timely) or if seller intends to sell the property to the other party, instead of you, at a higher price. The fact that seller first denied they opened another escrow is disconcerting. The fact seller won’t disclose its intent puts you at risk. If your company wants the property, it is imperative that you consult a litigation attorney with real estate experience immediately. Sellers conduct constitutes a breach or anticipatory breach of the purchase and sale agreement. Provided the purchase and sale agreement does not state that buyer waives its right (waiver would be unlikely) to seek a remedy called “specific performance”, it is imperative that buyer immediately file suit against seller for specific performance and concurrently record a lis pendens. The lis pendens will cloud title, essentially preventing seller from transferring clean title to the other buyer until your specific performance suit is resolved. Buyer’s specific performance suit essentially asks the court to compel seller to perform under the terms of the purchase and sale agreement, which will result in title transferring to buyer. Good luck! Q: One of our vendor’s invoices provides for a 1.5% late fee per month if the invoice is not paid in full within 15 days of receipt. We are in a dispute with them now and they are claiming essentially 18% interest, although they call it a late fee. Isn’t that usurious? Is this enforceable? A: Usury laws are found in the California Constitution. This area of the law is somewhat intricate, riddled with exceptions, and frankly a bit dry. Usury laws exist to limit the amount of interest charged on money lent. Consequently, the usury laws generally only apply to interest payable “for any loan or forbearance of any money”. In your case, the 18% late fee is likely enforceable. First, your relationship with your vendor does not appear to include either a loan or forbearance of money, but rather a sale, which differs from a loan since it involves the transfer of property or services in exchange for a price. Second, an exception to the usury law known as the “time-price” doctrine appears applicable. The law recognizes a seller’s right to name its price for goods or services. Sellers can ask for a cash price, or a higher price if buyers choose to purchase on credit. When you chose not to pay the invoices by their due date, you essentially chose to accept sellers credit terms, which included the 1.5% monthly late fee. Q: Last year my company loaned an employee $1,500. He expressly authorized us to deduct $150 a month from his paycheck until paid in full. The employee quit last week and my controller deducted the balance of the note ($450) from his final paycheck. I just got a letter from our ex-employee disputing the deduction and threatening to file a complaint with the labor commissioner. Did we do something wrong? A: I wouldn’t say you did anything wrong, certainly not morally wrong. However, the deduction was unlawful. Although the $150 monthly deductions were lawful (presuming you had the employee’s written authorization, as your question suggests), deducting the balance of the debt from the final paycheck in effect accelerated the debt and is thus unlawful. The legislative rational is that such setoffs violate state laws prohibiting prejudgment attachment of wages. Although employees may agree to allow deductions from wages for such things as premiums for health or disability insurance, and contributions to pension or retirement plans, it is important for employers to refrain from deducting other employee debts from final paychecks. You should contemplate promptly refunding the wrongfully deducted money and remind your ex-employee of his obligation to remit $150 each month until the $450 is paid in full. If he fails to satisfy his debt, you may consider filing a small claims action. “This column contains general information and under no circumstances constitutes legal advice. This information is not provided in the context of an attorney-client relationship and nothing herein creates an attorney-client relationship. Readers should not act upon this general information without first seeking professional advice.”
