Deceptive or unfair business practices are against the law here in San Diego, and across the State of California. Businesses, owners, investors, employers, shareholders, and company management officers throughout California are held to a high standard, and can be held accountable for unfair business practices.
3 Key Takeaways About Why Deceptive or Unfair Business Practices are Against the Law in California:
- Unfair business practices is one of the issues contained within the vast majority of business disputes and lawsuits here in California.
- What constitutes an unfair business practice, and what types of business professionals should be aware of their exposure and responsibilities under California business laws?
- The primary ingredient in an unfair business practice is deception. Another important ingredient is the advantage of one person having authority over another within the business context.
The Watkins Firm has more than four decades of experience helping the San Diego and California business community and business professionals and investors within the context of fair business conduct, as well as business-related disputes and lawsuits. If you are concerned about the actions of a fellow business owner, majority interest, manager, or investor you need to contact us or call the Watkins Firm today for a free, insightful consultation at 858-535-1511.
What is an Unfair Business Practice?
Unfair business practices in California are established as a component of our unfair competition laws. The California Unfair Competition law covers deceptive, untrue and misleading advertising as well as unfair business practices such as business fraud and misrepresentation. Most business lawsuits allege some form of unfair business practices, and this is an important distinction from the perspective of risk. This is how small disputes become LARGE FINANCIAL RISKS quickly and unexpectedly. You see, any element of business fraud or deception opens the door to the remedy of punitive damages and attorneys fees. A seemingly small dispute can become an expensive, all out battle.
There are many practices which place business subordinates or minority investors into an unfair position, and this is why deceptive or unfair business practices are against the law in California. It can happen when a former employee or even a business partner or vendor misappropriates your business trade secrets and/or customer or supplier information. Any breach of fiduciary duty, breach of contract, self-dealing or business-related conspiracies can be an unfair business practice. Promoting or inciting actions that are against the interests of a corporation, attempts to go around or dilute the interests of stakeholders, collusion, embezzlement or fraud can result in allegations of deceptive or unfair business practices.
Generally speaking, California’s Unfair Competition laws set the boundaries of the playing field upon which good business is to be conducted. Let’s be clear: in a football game, the field is wide and there is a lot of room between the sidelines. The same is true for business. This is a competitive undertaking, no doubt. However, there are definitely boundaries California has established to prevent other businesses from competing with your company outside of what is fair and true. There are also boundaries of how business owners, executives, and managers are to conduct themselves and discharge their responsibilities.
Pro-Tip: “Deceptive or unfair business practices are against the law here in San Diego, and across the State of California for a very good reason – they create an unfair advantage. What does an unfair business practice include? A better question is what would not be considered to be an unfair business practice? Because it seems to be in every lawsuit that we defend, you sue someone for sexual harassment, you’re going to get sued for unfair business practices. You sue them for any type of fraud in the business arena, you’re going to cite unfair business practices. You sue them for unfair competition. There you go. You’re going to get sued under Business and professions code section seventeen thousand two hundred and seventeen thousand five hundred. And there in between, there are many, many laws talking about what’s unfair and what you can sue for. And it seems to cover everything. It seems to be included in almost all lawsuits, and it has an attorney’s fees clause.
What are some of the basic examples of unfair business practice? Look at it from two perspectives. If you are being sued by someone you’re dealing directly with and they say, ‘well, what you’re doing is gaining an unfair business advantage over me, you’re violating my rights.’ – that’s a direct unfair business practice. If the person across the street is in business and it’s similar to yours and they’re doing things that are affecting your business to their advantage and your detriment, that could be an unfair business practice. So as broad as it is, and as big many large examples as there are, it’s important to see your lawyer. When you’re in business and you have contracts, this is a big way people get in trouble. They put things in their contracts that are deemed to be an unfair business practice. And those can be anything from how they price, how they pay their employees, how they advertise, how they labeled their products. All those things can turn into unfair business practices and a cause of action. And they wind up getting sued.
One of the biggest buckets would be fraud and unethical contact. How extensive of a bucket is that fraud and unethical conduct? Actually, it’s more of a, ‘what was the effect of your action?’ Were you accurate in your representations? Did someone detrimentally rely on something you did say or said to their detriment? And were there any other statutory violations that you committed in the context of whatever contractor agreement you have that would make it unfair to whoever you’re dealing with or to your competitors? And the way you do business, if you don’t pay your employees their legal employment taxes and you don’t take out withholdings and your competitor does, they’re going to say it’s not fair.
Misuse of power is another example of I have power over you in one form or another and I’ve abused that privilege. How does that come into play in these types of actions? It’s a great question, and often the central issue. When you have superior negotiating position and you enter into an agreement or a relationship in business and it turns out that you’re getting an unfair advantage because of it, in addition to the unconscionable, unfair fraud cause of action, you’re going to get this unfair business practice cause of action. And it’s going to say that the terms of the contract should not be held against me. And you’re going to get a list of about 12 causes of action and one will be this unfair business practices one. And if they can make that stick, then they get all their attorneys’ fees, and a small five figure dispute, becomes a six or seven figure dispute.” – Dan Watkins, Founding Partner
We Can Put a Stop to Unfair Advertising and Unfair Competition
The Watkins Firm has 40+ years of experience serving the business, science and tech, real estate and medical / healthcare communities here in San Diego and across California. Deceptive or unfair business practices are against the law here in San Diego, and across the State of California, and our attorneys have the experience and legal skill required to put an immediate stop to these business practices, and recover the financial damages which you have borne as a result of their actions.
Honest competition and proper business action and etiquette is healthy, and California law does not prohibit actions by those who are honestly and fairly holding out their strengths and competitive advantages. However, when a company or business professional uses deception or misleading information, or takes advantage of their inside knowledge or authority, you should take action.
If you are concerned about the deceptive or unfair business practices of a business or individual in San Diego or throughout California we invite you to review our podcast Episode 25 – Unfair Business Practice Overview as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
Meet Dan Watkins:
Daniel W. Watkins is a true people person who sincerely listens. He cares deeply about what others are going through. Dan enjoys digging into the facts and finding creative solutions to problems. He contributes his insights candidly and constructively.
Dan’s interest in people make him deeply invested in every relationship and his exuberant personality makes him a true litigator. Dan fights for his clients with a fierce and calculated commitment.
Dan has practiced in the areas of business, medical practices and healthcare business, high tech/science, real estate and employment defense law since 1987. He is a trusted litigation strategist and true trial attorney with over 50 jury and bench trials to his credit. Dan has successfully represented both large companies and individuals and achieved substantial victories in well-publicized trials throughout California and the U.S.
He is experienced in business and corporate formation and administration, as well as all forms of alternative dispute resolution, including binding arbitration and mediation.
THE ROAD TO BECOMING A BUSINESS LAWYER AND LITIGATOR
Dan has almost 40 years of experience working with, for and against some of the largest insurance companies in the country. He has successfully tried and litigated cases in the areas of Healthcare Compliance, Commercial Litigation, Unfair Business Practices, Fraud, Breach of Contract, Battery, Premises Liability, Product Defect, Medical Malpractice, Discrimination, Sexual Harassment, Construction Defect, as well as Unfair Competition, Defamation, and Trade Secrets.
In December 2003, Dan commenced litigation against Health South Surgery Centers-West, Inc and its’ subsidiaries, exposing the company’s extensive mismanagement and misconduct of its’ surgery centers. Dan has also been asked by some of California’s largest municipalities and corporations to conduct legally required investigations into matters involving alleged employment discrimination and harassment.
