Our Fathers, Our Companies : Thoughts on Father's Day and Entrepreneurship

On this father’s day, I have been thinking about my own dad and his influence on my life and career as an entrepreneur.   In fact, the dedication I put onto the new edition of Zen Entrepreneurship, launched just last week, was:  “For my Dad, who brought us from the East, into the West”

My father was an immigrant from Pakistan, who packed up the family and brought us, back in the 1970’s, to the auto capital of the world, Detroit, where he hoped to put his economics background to good use.  From that time, he subtly and not-so-subtly encouraged us to think big, be ambitious, and even steered us towards tech entrepreneurship.

One Saturday in the early 1980’s, in the cold landscape of North Dakota, where we’d moved to because he couldn't find a decent job in Detroit during the recession,  he brought both us into his office. They had just bought an Apple II computer, and he wanted to show us that this would be the “next big thing”.  I still remember the first BASIC program that he taught us to write:

10 Print “Hello”

20 Goto 10

Well, after that I was hooked.  My brother and I competed to see who could build the better Tic Tac Toe games on the Apple II at my Dad's office after school.  Eventually we got our own Commodore 64 to program in.  The graphics were terrible – blocky lines that we used to draw X’s and O’s, but I remember my excitement when I figured out that I could have the computer play against a person (It didn’t occur to me until I saw WarGames with Mathew Broderick that you could have the computer play itself!).

My dad also brought out a copy of Time magazine that had a very young Steve Jobs on the cover with an apple on his head and showed it to us.  This was the only cover of Time that I remember him ever showing us (I just looked up the date – it was February 15, 1982), and the only cover of any magazine other than Mad that I remember from when I was kid.

Though my father wasn’t an entrepreneur himself, he always had an entrepreneurial mindset, and I think this had a lot to do with both my brother and I becoming entrepreneurs.   There was another side to this encouragement, of course - like most Asian parents that immigrated back then --  there were only a few “acceptable” professions for their kids: an engineer, lawyer, doctor, or entrepreneur. 

When I proudly announced that I was thinking of becoming an actor in high school, I remember him reprimanding me with some practical advice - if you want to be an actor, that's fine, but get an engineering degree so you can have a "real job" and make a living.  I listened (it turns out I was much better at computer programming than I was at acting!).  The funny thing is that my tech entrepreneurship eventually led me to be an angel investor in startups, which eventually led me to becoming a producer of independent films,  so it's call come back full circle.  

On this father’s day, I wonder what role encouragement from one’s dad (or mom, but we’ll talk about that on mother’s day!) plays in the (unconscious) decision to become an entrepreneur?

My co-founder in my very first (and most recent) company, Mitch Liu, had grown up with his dad running a small business in Seattle.  I also recall in my book that Mitch’s father had given us the funding so that we could afford to go to our first trade show, which launched our first product.

Years later, when I was at Stanford Business School, Steve Ballmer came to speak to to us.  He told us that Bill Gates had wanted Steve to leave business school to join Microsoft full-time. Steve’s own father wasn’t so sure since the company was just a fledliging startup at the time.  When Steve hesitated, Bill brought out the big guns to convince him that Microsoft was an opportunity that Steve couldn't pass up: Bill’s father.  According to Steve, whenever there was a serious negotiation in those early days and someone needed convincing, Bill would make them have dinner with his father, which would usually do the trick!

One of Bill Gates' neighbors, Naveen Jain, whom I met recently, co founder of Intellius and Moon Express, wrote a nice piece about his children becoming entrepreneurs at a very young age on Forbes:   http://www.forbes.com/sites/naveenjain/2012/06/17/the-source-of-my-greatest-happiness-have-always-been-our-children/

If their father hadn’t been such a successful entrepreneur and such an influence on them, I wonder if would they have become so entrepreneurial at such an early age?

Scott Walker, himself founder of Walker Law Group, tells us a cautionary taleabout his own father, who had started and took a telecommunications company public, making milions, and then losing them in a great read on this father's day: “3 Lessons for entrepreneurs on Father’s day”: http://blog.asmartbear.com/three-entrepreneur-lessons.html

As I think about it today, while I don’t believe that genetics has anything to do with it, I can say that most of the people that I know who’ve become entrepreneurs had some serious influence come down from their fathers.  So, on this Father’s day, as we appreciate our Dad’s, let’s also think about the influence we are having on the next generation - it could be a key factor in what direction they end up going down in their own path in life.

U.S. Supreme Court: Arbitrator Had Power to Interpret Whether Arbitration Agreement Allowed Class Actions

The Supreme Court infrequently issues unanimous decisions in matters that concern employers and employees. So, it was a bit of a surprise to see Oxford Health Plans v. Sutter, the Court's 9-0 decision today.  Then I noticed that the substantive claims are not employment law-related.  Still, this opinion  will affect class action arbitration, employment law and otherwise.

Sutter was a doctor. He and a class of doctors sued Oxford for failing to reimburse adequately under the insurance reimbursement contract. Oxford required Sutter to arbitrated his claim under this arbitration clause:

No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration in New Jersey, pursuant to the rules of the American Arbitration Association with one arbitrator.

Once in arbitration, the parties agreed to let the arbitrator  decide whether the above language authorized classwide arbitration. The arbitrator held that it did.  When the Supreme Court issued Stolt Nielsen v. AnimalFeeds (when arbitration agreement is silent regarding class action arbitration, the default is to hold individual arbitrations), Oxford asked the arbitrator again to exclude class claims. The arbitrator again refused.

So, for a second time Oxford moved to vacate that finding under the Federal Arbitration Act.  The trial court, the court of appeals and the Supreme Court unanimously said, no can do:

Here, the arbitrator did construe the contract (focusing, per usual, on its language), and did find an agreement to permit class arbitration. So to overturn his decision, we would have to rely on a finding that he misapprehended the parties’ intent. But [Federal Arbitration Act] §10(a)(4) bars that course: It permits courts to vacate an arbitral decision only when the arbitrator strayed from his delegated task of interpreting a contract, not when he performed that task poorly.

As in other cases, the Court's decision in part turned on the litigation strategy of one of the parties. Possibly to garner more votes, Justice Kagan was pretty negative about the arbitrator's decision.  She suggested that a court might well have ruled a different way if Oxford had chosen to ask the district court to interpret the agreement instead of the arbitrator:

We would face a different issue if Oxford had argued below that the availability of class arbitration is a so-called “question of arbitrability.” Those questions—which “include certain gateway matters, such as whether parties have a valid arbitration agreement at all or whether a concededly binding arbitration clause applies to a certain type of controversy”—are presumptively for courts to decide. Green Tree Financial Corp. v. Bazzle, 539 U. S. 444, 452 (2003) (plurality opinion). A court may therefore review an arbitrator’s determination of such a matter de novo absent “clear[] and unmistakabl[e]” evidence that the parties wanted an arbitrator to resolve the dispute. AT&T Technologies, Inc. v. Communications Workers, 475 U. S. 643, 649 (1986). StoltNielsen made clear that this Court has not yet decided whether the
availability of class arbitration is a question of arbitrability. See 559 U. S., at 680. But this case gives us no opportunity to do so because Oxford agreed that the arbitrator should determine whether its contract with Sutter authorized class procedures. See Brief for Petitioner 38, n. 9 (conceding this point). Indeed, Oxford submitted that issue to the arbitrator not once, but twice—and the second time after StoltNielsen flagged that it might be a question of arbitrability.

So, lesson learned.  If you think a court will follow Stolt-Nielsen more faithfully than an arbitrator, seek construction of your arbitration clause in court.

Bonus - the Court said this right up front:  "Class arbitration is a matter of consent: An arbitrator
may employ class procedures only if the parties have authorized them."  That does not bode well for those who would like the California Supreme Court to hold that class action waivers are illegal.

This case Oxford Health Plans LLC v. Sutter and the opinion is here.

Carry On

Lovelies,

This will be a relatively brief post, as I am  in the middle of studying for my final exams taking place this upcoming week. I'm practically brain-dead from learning about Transduction and integrals of Polar graphs. Yikes.

I shot a few photos last week to highlight this absolutely gorgeous Madewell shirt with embroidered detailing. The fabric, a lightweight and airy cotton material, is perfect for the upcoming Central Valley heat here in California. I especially love this shirt because of its neon accents; the neon melon color you see above seems to be the unofficial color of summer! If you're interested, the shirt is featured in Madewell's online catalogue; you can find that here.

I'm very excited to announce that I will be traveling abroad to Paris, Saint- Émilion and Normandy this summer to visit and (stay with) my dearest friend, Marie! I will be completely immersed in the French culture for two full weeks; this includes speaking French...only French....

I'm worried that I'm going to forget my five years-worth of french courses as soon as I step off the plane. In all honesty, however, I cannot wait to see Marie, spend time in museums AND improve my french simultaneously. It's all a rather good plan. ;)

Good luck with finals, everyone!

-Emily

Details-

Madewell Shirt

Dogeared Necklace

Anthropologie Earrings

Zen Entrepreneurship : Second Edition Now Available and a Bestseller!

“I started meditating, a path of personal growth, because I thought it could help accelerate my career. By the time I was done, I would begin to view my career as a way of accelerating my personal growth. I realized I had it backwards.”

                        -from Zen Entrepreneurship, Rizwan Virk

The second, expanded edition of my book, Zen Entrepreneurship: Walking the Path of the Career Warrior – was launched on Amazon recently and I'm happy to announce it's become an international bestseller in four countries!

Buy it on Amazon.com now:  http://www.amazon.com/dp/0983056919/

Special Promotion - Get hundreds of dollars in free gifts: http://www.zenentrepreneur.com/book

Follow the book on Facebook: http://www.facebook.com/zenentrepreneur

What is this book about?

Zen Entrepreneurship reads like 3 books rolled into one:  a business tale, a spiritual adventure, and a handbook.

On one level, it’s the story of my very first startup, which I founded with my  good friend from MIT, Mitch Liu.  We didn’t really know what we were doing, but were very ambitious and to our surprise, the startup took off, and for a while it was one of the hottest startups on the East coast.  We had numerous articles written about us and Information Week called us one of 8 startups that CIOs of major corporations should watch. One this level, the book can be read as an interesting “startup tale”.

On another level, it’s a book about a path of spiritual growth.  Around this same time, I started meditating and working with a set of spiritual teachers and learning about “the hidden worlds”.  Back in those days, I didn’t care much about spiritual growth – or topics like dreams, finding my calling in life, karma, energetic patterns, synchronicity – I just wanted something that would help me mentally focus and have the mental stamina that a startup requires.  What I found was that the two were interrelated - more than I realized.  At this level, you can read it as a "tale of power" of a student being mentored - like The Way of the Peaceful Warrior, or the Teachings of don Juan. 

The third level, which is the most important in my opinion, is that this book is a handbook for bringing spiritual development and your work into one.  The Buddha once said: “Your work in life is to find your work and give your heart to it!”.  Rather than having your personal growth “over here”, while your work and your career is “over there”, the book describes the “Path of the Career Warrior”, which is a way to integrate the two paths into one.  In fact, the issues you are struggling with in your personal life and/or your meditation, are the same issues you will likely be dealing with in your career. If you have a startup, it’s even worse!

What have people said about the book?

“Tales of Power meets the Peaceful Warrior... in Silicon Valley! It's entertaining, humble, insightful and valuable - not just to entrepreneurs, but to anyone looking to manifest their dreams and make a difference in the world.”


           —Foster Gamble, Creator and Host, Thrive: What on Earth Will It Take

“You will come away with insight about yourself, guidance … and knowledge that you may not be able to acquire anywhere else save the mountaintops of the Himalayas.”


—Bookreview.com

 “Riz Virk brings the wisdom of ancient Eastern traditions into a purely Western setting. The result is an often hilarious but always insightful book that will change how you view career success and help you discover and walk your own unique path.”


—Marc Allen, author of Visionary Business, CEO and co-founder of New World Library

“Zen Entrepreneurship changed my life, it confirmed for me that 'clues' exist in the world around us and are powerful. I shared this book with every one of my clients from that point forward. Powerful. A must read... it reinforces that there is a bigger guide within us if we choose to listen”


—Lorin Beller, author of From Entrepreneur to Big Fish: 7 Principles of Wild Succes

What’s new in the second edition?

There’s at least 50 pages of new content based on feedback from readers in the years since I wrote the first edition  The new content transforms the book from a “fun story tor read” to a handbook, with summaries, principles, and exercises at the end of each chapter.

Many readers have told me they go back to the book every year to “refresh” on some of the business and spiritual principles described in the  story.  The second edition is  definitely the one to do this with – this edition is both a story and a manual for living the 14 principles of the Career Warrior.

Where can I get it?  What’s special on June 4^th!

If you buy the book June 4^th, you will receive a set of bonus gifts, worth hundreds of dollars from myself and other bestselling authors, spiritual and business coaches/advisors.  This includes a preview of my next book about synchronicity, Treasure Hunt,  an ebook from Betsy Chaisse, co creator of the wildly popular film, What the Bleep do we know?, Magical mystical images from visionary artist Ellen Mcdonough, and many, many more!

Special Promotion is here:  http://www.zenentrepreneur.com/book

Buy it here:   http://www.amazon.com/dp/0983056919/

Follow me on Facebook: http://www.facebook.com/zenentrepreneur

9th Circuit: California Wage Hour Class Action Should Be Certified

Employees of Medline Industries brought a wage and hour class actions, which Medline removed to federal court.  The claims included "rounding," improper calculation of the "regular rate" for overtime purposes, waiting time penalties, and inadequate wage statements. 

The district court refused to certify the class because, although there were common questions, the individualized assessments of which employees were entitled to damages, and how much, outweighed the common issues.

The Ninth Circuit held the district court abused its discretion.  The court explained that individual damage assessments do not defeat class certification if liability can be determined via common proof.

Of note, the court distinguished the U.S. Supreme Court's recent decision in Comcast Corp. v.Behrend, 133 S. Ct. 1426, 1435 (2013):

In Comcast, the Supreme Court reversed an order granting class certification because the plaintiffs relied on a regression model that “did not isolate damages resulting from any one theory of antitrust impact.” Id. at 1431. The Court concluded that “a model purporting to serve as evidence of damages in this class action must measure only those damages attributable to that theory.” Id. at 1433.

Here, unlike in Comcast, if putative class members prove Medline’s liability, damages will be calculated based on the wages each employee lost due to Medline’s unlawful testimony of Medline’s director of payroll operations, andMedline’s Notice of Removal. Those documents show that

Medline’s computerized payroll and time-keeping database would enable the court to accurately calculate damages and related penalties for each claim.

So, this case will proceed as a class action, and the Comcast decision does not preclude class certification when there are individual damages issues, when there is a reliable way of establishing each class member's damages.

This case is Leyva v. Medline Industries, Inc. and the opinion is here.

CA Supreme Court: LA County Union Entitled to Home Addresses and Phone Numbers of Non-Union Employees

The California Supreme Court in a unanimous opinion addressed employees' privacy rights in the public sector union context. The decision has implications for non-union, private sector employers as well, so read on.

The Service Employees International Union, Local 721, represents Los Angeles County's employees.  However, employees within the union's collective bargaining unit may choose not to join the SEIU as a member. Here's how it works per the CA Supreme Court.

Each of the County‟s bargaining units has a memorandum of understanding (MOU), with SEIU. Most of these MOUs have an agency shop provision that gives County employees four options: (1) join SEIU and pay dues; (2) decline to join and pay a fair share fee; (3) decline to join, object to the fair share fee, and instead pay an agency shop fee; or (4) decline to join, claim a religious exemption, and pay the agency shop fee to a nonreligious, nonlabor charitable fund. A recognized bargaining agent acts on behalf of
all employees in a bargaining unit, whether the employees are union members or not.

Every year, the union sends out a packet of information.  Those who do not respond are deemed "fair share" fee payers.  The vast majority of non-members are "fair share" fee payers.  The "fair share" fee covers activities related to collective bargaining, but does not include contributions for the union's non-bargaining related activities, such as political activity.

The County historically did not disclose non-members' addresses and phone numbers. Instead, the union would send the packets to a third party, the LA County Employee Relations Commission, for distribution to the non-members.

In 2006, the union sought to amend the collective bargaining agreements to require the County to turn over the addresses and phone numbers of non-members. After the County refused, the union filed an administrative charge with the County ERC. The ERC held the County's refusal was an unfair labor practice.  The County filed a writ proceeding in Superior Court, which held that the non-members' privacy interests would have to yield to the union's need to discharge its duties as bargaining representatives of the non-members.

The Court of Appeal also held the union was entitled to the information, but for different reasons than the superior court.  The appellate court decided that the non-members had a right to notice and the opportunity to opt-out of disclosure, similar to the rights courts have fashioned in the context of class action litigation.

The California Supreme Court accepted the County's request for review.  First, the Court noted that the National Labor Relations Act does not apply to the County's union relationship.  The County's relationship is governed by state law, the MMBA.  LA County's ERCOM (rather than the NLRB in the private sector or the PERB that covers state workers and counties other than LA) enforces the MMBA.  I know, lots of acronyms.  Bottom line, though, is that PERB interpretations of the MMBA and the NLRB's decisions under the NLRA are persuasive authority.

The Court analyzed the PERB and NLRA decisions as well as the statute and other authorities. The Court concluded that the union is entitled to the names and addresses of the employees it represents, even when the employees do not sign up as "members" of the union and pay only the agency fee.

The Court then considered whether California's right to privacy outweighed the union's right to the information. The Court first decided that applicants and employees had a reasonable expectation that employers would keep personal contact information private.  The Court noted:

A job applicant who provides personal information to a prospective employer can reasonably expect that the employer will not divulge the information outside the entity except in very limited circumstances. For example, various laws require employers to disclose information to governmental agencies, such as the Internal Revenue Service and Social Security Administration, and disclosure may also be necessary for banks or insurance companies to provide employee benefits. (See Belaire-West Landscape, Inc. v. Superior Court (2007) 149 Cal.App.4th 554, 561 (Belaire-West).) But beyond these required disclosures, it is reasonable for employees to expect that their home contact information will remain private "in light of employers‟ usual confidentiality customs and practices."

This conclusion is important to private sector, non-union employers, because it means that employees should be notified and should consent to disclosure to third parties, such as customers or vendors.  These notices and consents usually occur when employees sign up for benefits and the like.  Employee handbooks can contain a policy notifying employees that sometimes names and addresses will be disclosed to customers, vendors, etc. if that is a concern.

The Court next decided that disclosure of names and addresses amounted to a serious intrusion, another essential element of an invasion of privacy claim.

So, the County having established a reasonable expectation of privacy and a serious intrusion, the union had to show its legitimate interest in the information outweighed the employees' privacy interest.  The Court agreed that the union's interest was sufficiently important to justify the intrusion. 

The Court noted that employees and the County could put into place procedural safeguards themselves that would limit or preclude disclosure of non-members' information such as via collective bargaining: 
 

Employers like the County remain free to bargain for a notice and opt-out procedure in negotiating collective bargaining agreements with employee unions. Public employers can also draft employment contracts that will notify employees their home contact information is subject to disclosure to the union and permit employees to request nondisclosure. Finally, nothing in the relevant statutes or case law appears to prohibit agencies such as PERB or ERCOM from developing notice and opt-out procedures that would allow employees to preserve the confidentiality of their home addresses and telephone numbers

The decision is LA County v. Los Angeles County Employee Relations Commission and the opinion is here.

DGV






 

Court of Appeal Affirms Summary Judgment on Sexual Harassment Claim and More

The Court of Appeal's decision in McCoy v. Pacific Maritime Association covers a lot of ground.  The opinion contains analysis of a variety of issues important for pre-trial and trial lawyers alike.

Here are the main issues -

1. The plaintiff's allegations of hostile work environment harassment and intentional infliction of emotional distress were not severe / pervasive / extreme / outrageous enough to reach the jury.  The plaintiff's claim is summarized here:

Appellant testified that she was harassed and shunned throughout her training period. Her complaints centered around one vessel planner in particular, Anthony Spanjol. Appellant testified that Spanjol would disrespect her by talking down to her and by putting his feet up on her work space. On one occasion, he yelled at her in front of other employees and called her stupid. One of appellant‟s supervisors, Marc Izzo, witnessed this incident, but left the room rather than address it. Appellant testified that when she complained about the incident she was told that she should go home and that Spanjol‟s behavior was just a part of his personality. She also stated that Spanjol often made racially derogatory remarks and engaged in sexually offensive behavior. He would comment on the buttocks of other female employees once they left the room, using terms like "„nigger ass‟" and "„J-Lo ass.‟" On at least one occasion, Spanjol also made crude gestures toward a woman when the woman‟s back was turned. He also mocked these women in appellant‟s presence. During another incident, appellant asked Spanjol a question regarding the unloading of a ship, but he ignored her and "never spoke to [her] again." Appellant testified that shortly after this incident she decided she could no longer handle the work environment and quit her job entirely.

The court held that the harassment was not severe or pervasive enough to require a jury's consideration. The court also held that the allegations of co-worker harassment were not actionable because the plaintiff did not prove that her employer knew or should have known of the conduct directed toward her.

2.  The court held that the trial court properly excluded evidence of harassment of other women because the only claim tried was retaliation.

3.   "Me-too" evidence of retaliation against other women should have been admitted.

4.   The plaintiff claimed denial of promotion based on retaliation. The court held she was entitled to damages if she prevailed even if she did not prove constructive discharge. The amount of those damages would have to be limited to what she actually lost (the difference between her pay and the pay if she had been promoted).  I don't understand how she would be entitled to that differential after she quit if it's not a constructive discharge.  If you voluntarily quit, you no longer receive pay...  I know, there I go thinking again.

5.   The court held that PMA, an association that negotiated collective bargaining agreements, was not the plaintiff's employer, and therefore could not be held liable for retaliation or other FEHA based actions.

So, lots of reasons to cite this case.  It's long, but worth reading.  The opinion in McCoy v. Pacific Maritime Association is here.

DGV