Healthy Workplaces/Healthy Families Act of 2014: Paid Sick Leave

Dear Clients and Friends:

California recently instated a new paid sick leave law that went into effect January 1, 2015. Under the Healthy Workplaces/Healthy Families Act of 2014, employees will earn at least one hour of paid leave for every 30 hours worked, which equals about eight days a year for a full time employee. Employers are allowed to limit the amount of paid sick leave in one year to three days.

Employees will begin accruing sick days on July 1, 2015, as long as they have been working in the state of California for 30 or more days within a year from the beginning of employment. The law required employee notification, effective on January 1, 2015. However, employee entitlement does not begin until July 1, 2015. The paid sick leave applies to all employees working 30 days within a year in California, including part-time, per diem and temporary employees. Exceptions to this law include employees covered by qualifying collective bargaining agreements, in-home supportive services providers and certain employees of air carriers. (For a complete list of these exceptions visit http://www.dir.ca.gov/dlse/Paid_Sick_Leave.htm).

Accrued paid sick leave can carry over to the following year of employment and may be capped at 48 hours or 6 days. However, an employer may have a paid sick leave, paid leave or paid time off policy (PTO) that provides no less than 24 hours or three days of paid leave or paid time off, then no accrual or carry over is required, subject to the full amount of leave is received at the beginning of each year in accordance with the policy (Entitlement, Healthy Workplaces/Healthy Families Act of 2014 Paid Sick Leave, Division of Labor Standards Enforcement, Office of the Labor Commissioner).

To comply with the Healthy Workplace/Healthy Family Act, employers must display the paid sick leave poster where employees can read it easily, which can be found at http://www.dir.ca.gov/dlse/ab1522.html. Employers must provide written notice to employees with sick leave rights at the time of hire and allow eligible employees to use accrued paid sick leave upon reasonable request. Under this law, employers will provide for accrual of one hour for every 30 hours worked and allow use of at least 24 hours or 3 days or provide that amount of time at the beginning of a 12 month period of paid sick leave for each eligible employee to use per year. Employers must also show how many days of sick leave an employee has available and keep records showing how many hours have been earned and used for three years (Healthy workplace Healthy Family Act of 2014, State of California, Department of Industrial Relations, dir.ca.gov).

For more details regarding this law for eligible employees or requirements for employers, visit http://www.dir.ca.gov/.

2015 National Jewish Health Black & White Ball

Congratulations to the 2015 Humanitarian Award recipients, George Blanco, of Avant Advisory Group, and Sunnie Kim, of Hana Financial, Inc.  

The 2015 National Jewish Health Black & White Ball Presented by the Los Angeles Professional Services raised nearly $400,000 to fund clinical care, research and educational programs at National Jewish Health.


 

Industry Voices: All Star Offensive: Converse Turns to the ITC to Protect Its Chucks Brand

By Nicholas Rozansky Contributing Writer | Thursday, April 16, 2015

Late last year, Nike’s Converse Inc. went on the offensive against 31 companies—including WalmartSkechers USA and Ralph Lauren—claiming that the companies are infringing upon a configuration of elements Converse claims are protected by trademark law—a rubber “bumper” running around the front of the shoe, a “toe cap” on the top of the shoe above the bumper, and lines or stripes running around the sides. These, Converse claims, are signature elements of its signature Chuck Taylor All Star.

Converse, which was acquired by Nike in 2003, wants the shoes off the shelves, along with monetary damages, and is pursuing an additional complaint with the International Trade Commission (ITC), which has the power to prevent any shoe it considers to be counterfeit from entering the country. The unusual move of pursuing a separate complaint with the ITC shows that Nike is dead-set on protecting the $1.7 billion of Nike’s roughly $28 billion in sales that Converse represents. 

After Converse’s filing, the ITC “voted to institute an investigation of certain footwear products. The products at issue … are shoes that allegedly infringe or dilute registered and common-law trademarks used in connection with certain Converse shoes, such as the Chuck Taylor All Star Shoe. The complaint, as amended, alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain footwear products that infringe or dilute registered and common-law trademarks asserted with Converse. The complainant requests that the ITC issue a general exclusion order, or in the alternative a limited exclusion order, and a cease-and-desist order.” 

Trademark cases rarely make it to the ITC, an underutilized venue for brands aiming to fight infringement, and the defendants are asking for a stay in the federal litigation until the ITC makes its determination. 

Converse’s aggressive stance seems to be working. All but a few companies, including Aldo and Fila, have since settled. Ralph Lauren Corp. capitulated in January after the ITC determined that Ralph Lauren infringed on Converse’s trademarks, including “washed canvas, Western leather, camouflage shoes and bleached-denim shoes.” Ralph Lauren then had 20 days to scrap all of its 36 copycat sneakers and related “molds, parts, tools, marketing, packaging and promotional materials” and paid Converse an undisclosed amount. The ITC went wider than the “bumpers,” “caps” and “stripes.” And in February, Converse filed notice it was dismissing its case against Zulily “in view of an agreement” reached between the two parties. Converse also notified the federal court in Brooklyn, N.Y., that it was dismissing its suits against H&M and Tory Burch

Walmart, the most famous holdout, is taking an aggressive stance, filing a claim of its own and saying it “will fight Converse’s anti-competitive actions to preserve ‘Everyday Low Prices’ for Walmart customers, claiming that “Converse is using the suit to extort monetary settlements.” In its filing, Walmart, citing Converse ads, argues that the toe caps, bumpers and stripes are “actually or aesthetically functional” and therefore “they are not subject to trademark protection.” Trademark law does not allow companies to protect aspects of their designs that are functional, and companies must also prove that consumers associate the specific design with the manufacturer. Other unyielding defendants say Converse waited so long to sue that widespread copying has made this sneaker design generic while others are arguing that the collection of elements lacks sufficient distinctiveness to function as a “source designator” to make the shoe unique and protectable.

New Balance, not named in Converse’s initial lawsuit, took preemptive action by filing a federal lawsuit denouncing Converse’s “aggressive efforts” to protect its Chuck Taylor All Star sneakers from “imitators.” New Balance first contacted Converse to ensure that New Balance’s PF Flyers shoe would be excluded from Converse’s aggressive legal campaign. In return, Converse threatened to add New Balance to the list of alleged infringers it submitted to the ITC.

Shortly thereafter, Converse issued a statement saying it “brought its case to the International Trade Commission to prevent consumer confusion, to protect its legitimate intellectual-property rights and to stop the sale of knockoff Chucks, all of which remain unchanged. We are committed to protecting our rights and will respond to [New Balance’s] filing accordingly.”

It’s important to note two other high-profile cases, Apple v. Samsung and Christian Louboutin v. Yves Saint Laurent, which recently pushed courts to look at protection issues. Most relevant to the Converse cases is the Louboutin case, where the court found that Louboutin’s signature red shoe sole was a “distinctive symbol” that represented the brand and deserved trademark status. The court stated, “The lacquered red outsole, as applied to a shoe with an ‘upper’ of a different color, has ‘come to identify and distinguish’ the Louboutin brand and is therefore a distinctive symbol that qualifies for trademark protection.” Determining factors include advertising expenditures, consumer studies linking the mark to a source, unsolicited media coverage, sales success, attempts to plagiarize the mark, and length and exclusivity of the mark’s use.

This holding narrowed Louboutin’s trademark to circumstances where the red shoe sole is matched with a contrasting upper. The court relied on evidence that the red sole mark’s ability to stand out from competitors depended on the color contrast between the red sole and a non-red upper of the shoe. Conversely, the court determined that shoes employing the same red color on the sole and upper were not a use of the red sole mark. This conclusion led to the court dismissing Louboutin’s trademark claims because YSL’s shoe was entirely red and thus not a use of the red sole mark.

Depending on the outcome, the Converse cases may prove to be a harbinger of similar cases in years to come. λ

 

Nicholas Rozansky, as a partner with Ezra Brutzkus Gubner LLP in Los Angeles, litigates cases for clients in the apparel and fashion industry.