Issue link: https://read.dmtmag.com/i/705606
1 1 2 V I N E YA R D & W I N E RY M A N A G E M E N T | J u l y - A u g 2 016 w w w. v w m m e d i a . c o m the employee's job responsibilities. Consider educating employees as well about potential government investigative tactics such as issu- ance of subpoenas, questioning by government investigators, and even "sting operations" in which government enforcers may misrep- resent their identities in an attempt to ferret out code violations. Don't assume independent con- tractors will take responsibility for getting necessary and required permits. As the business owner, you are ultimately responsible for making sure your business and the property on which it operates are in compliance with state and county ordinances and laws. Ask to see all the authorized permits and neces- sary certificates — don't just take your independent contractors at their word. Be nice to your neighbors. A significant portion of UCL investi- gations begin with a neighbor com- plaint to a state, county or local agency. If there are issues with your business' neighbors, try to address and resolve them directly. WHAT TO DO IF TARGETED There are several steps you should take to mitigate the potential damage to your business if you're the target of a UCL investigation. Engage counsel to act on your behalf. Counsel experienced in defending UCL actions and negoti- ating with the investigating agency can help formulate and execute a strategy to resolve the investiga- tion or case with the best possible outcome for your business — finan- cially and reputationally. Don't make any statements to investigating agencies without consulting with your counsel. Any statements you or your employees make directly to agencies inves- tigating a UCL case can be used against you in that case and can potentially get your business in more trouble, especially if the inves- tigating agency thinks the state- ments are false or misleading in any way. An attorney can talk to the investigating agency and negotiate on your business' behalf without requirements. These ordinances and the requirements pursuant to them can be complicated, and deal- ing with state and county agencies can be frustratingly slow. However, the risk of noncompliance, given the UCL penalties and costs, can be enormous. Consider hiring a con- sultant or advisor to help navigate state and local ordinance issues. Supervise and educate employ- ees about compliance with state and local ordinances. Businesses can and will likely be held vicari- ously liable for any conduct of their employees who are considered to be acting within the scope of their employment. An employee is considered to be acting within the scope of his or her employment if the conduct is reasonably related to the tasks the employee was hired to perform or the employee's con- duct was reasonably foreseeable in light of the employer's business or creating statements that bind or can be attributable to your business. Counsel will also be able to advise you in responding to gov- ernment agency requests, includ- i n g a d m i n i s t r a t i v e s u b p o e n a s . Although not necessarily tied to a filed lawsuit, administrative sub- poenas should be treated like any formal civil discovery request, with responses stating and preserving all objections and potential privileges. Remember that cooperation is valuable. Demonstrating to an inves- tigating agency that you're willing to cooperate and work with the agency to resolve UCL issues can go a long way in resolving an investigation before it becomes a lawsuit or, if a lawsuit is already filed, resolving the case outside of court. Out-of- court resolutions often involve the government agency agreeing to take a much-reduced civil penalty to resolve the case than could be sought in a court judgment. As soon as you learn about a UCL investiga- tion or lawsuit affecting your busi- ness, have your counsel consider the benefits of cooperation. If those benefits weigh in your business' favor, engage with the investigating agency on the topic of cooperation as soon as possible. With its broad applicability and low standard of proof, the UCL pro- vides a powerful tool for govern- ment entities to enforce state and local ordinances and to obtain civil penalties for their often underfund- ed agencies. The best practices to avoid UCL investigations and law- suits is to be vigilant about state and local ordinance compliance as well as potential investigations and to supervise and educate your employees to do the same. Jessica Nall is a partner and Nell Clement is a senior associate at Farella Braun + Martel LLP. They've assisted a number of wine industry businesses facing UCL enforce- ment actions. For more informa- tion, send an email to jnall@fbm. com or nclement@fbm.com, or visit www.fbm.com. Comments? Please e-mail us at feedback@vwmmedia.com. wine@hoyt-shepston.com