Over the summer, I like to expand my reading list into different topics. This year I discovered Rory Sutherland and his book Alchemy: The Power of Ideas That Don’t Make Sense. Sutherland is a British marketing executive and vice chairman of Ogilvy, but his insights go far beyond advertising. His book weaves together ideas from economics, psychology, evolutionary biology, and philosophy. It’s packed with practical wisdom for personal growth as well as for running and marketing a business.

While the book is full of insights on nearly every page, here are five key takeaways that I found especially relevant for employers and business leaders.

1. “If you are wholly predictable, people learn to hack you.”

Sutherland argues that the best ideas often come from unexpected places. He urges readers not to rely solely on logic, but also to leave room for chance, counterintuitive thinking, and the quirks of human psychology.

One of his fascinating examples comes from bee colonies: roughly 20% of bees ignore the “waggle dance” instructions that tell them where to find pollen. Instead, they set off in random directions, often discovering new sources of food. Without these “adventurer bees”—which I like to think of as modern venture capitalists—the hive would eventually fail once its known sources ran dry.

Takeaway: There’s risk mitigation in being unpredictable. Businesses benefit when they experiment, explore new opportunities, and avoid becoming entirely predictable.

2. Psycho-logic

Sutherland introduces the idea of “psycho-logic”:

“Logic is what makes a successful engineer or mathematician, but psycho-logic is what has made us a successful breed of monkey, that has survived and flourished over time. This alternative logic emerges from a parallel operating system within the human mind, which often operates unconsciously, and is far more powerful and pervasive than you realize. Rather like gravity, it is a force that nobody noticed until someone put a name to it.”

He points out that strict logic always leads to the same place as your competitors. The problem is that business often underestimates—and even ignores—the role of psychology in determining whether a product or service succeeds.

Takeaway: Employers and business leaders should remember that psychology, not just logic, drives customer and employee behavior.

3. Rethinking Hiring

Sutherland makes an important observation:

“[W]e are much more likely to take risks when hiring ten people than when hiring one.”

This, he argues, can naturally lead to more diversity without imposing quotas. He even says he’d interview a candidate with a “rotten” degree if that person were also the reigning under-25 UK backgammon champion. Why? Because unusual achievements signal qualities you won’t uncover by applying identical hiring criteria across the board.

Takeaway: Be wary of hiring averages. Standardized criteria produce standardized hires. Employers who take calculated risks in hiring can uncover exceptional and unexpected talent.

4. Two Types of Businesses

Sutherland describes two business models:

  1. The tourist restaurant approach – focused on maximizing profit from a single transaction.
  2. The local pub approach – focused on cultivating long-term relationships and repeat visits.

The latter model is built on trust. For example, businesses that resolve customer problems at their own expense demonstrate they are invested in long-term relationships. On the other hand, businesses that squeeze for short-term profits often come across as untrustworthy.

Takeaway: Employers should ask themselves whether they’re building for one-time transactions—or building for loyalty.

5. Why Branding Matters

Sutherland explains:

“Without the feedback loop made possible by distinctive and distinguishable petals or brands, nothing can improve.”

His example comes from Soviet factories, which were once required to produce a quota of rivets each month. Since the rivets couldn’t be stamped with the factory’s name, no one could tell which factories were producing poor-quality rivets. Over time, the incentive to care about quality disappeared – and the factories found it was easier to hit monthly quotas of rivets of poor-quality. Without names, the rivets became commodities. Once factories were required to stamp their names on the rivets, quality improved dramatically.

Takeaway: Branding provides accountability, feedback, and differentiation. Without it, quality suffers and products become commodities.

Alchemy is filled with unconventional wisdom that challenges the way we think about business and human behavior. These five lessons only scratch the surface, but they highlight the importance of embracing unpredictability, understanding psychology, taking smart risks in hiring, building long-term trust, and valuing the power of branding.

For employers, Sutherland’s message is clear: the best solutions often don’t make sense at first glance—but that’s exactly what makes them powerful.

The recent California Court of Appeal decision in Allison v. Dignity Health (June 24, 2025), involving claims over meal and rest breaks, is a reminder that class certification in wage and hour cases is not the end of the story. Even after a class is certified, it can still be decertified if evidence shows that individual issues outweigh common ones. Here are five lessons California employers should take from this important case.

1. Class Certification Is Not Set in Stone

In Allison, two registered nurses sued Dignity Health alleging missed meal and rest breaks, unpaid work time, and related claims. The trial court initially certified the class based largely on time records and a survey showing a high rate of meal-period noncompliance.

But after 19 months of discovery, the employer successfully moved to decertify the class. The Court of Appeal affirmed the decertification, showing that certification can be revisited—and reversed—if new evidence reveals that common proof won’t work for the whole group.

2. Post-Certification Discovery Can Change the Case

What led to decertification? Discovery revealed significant variations in employee experiences:

  • Some nurses voluntarily skipped or shortened breaks.
  • Timesheet entries were inconsistent and sometimes inaccurate.
  • Many employees testified that they were able to take compliant breaks.

These differences meant that the court would have to assess individual reasons for missed breaks—making a class action unmanageable. Employers should understand that thorough discovery can uncover facts that undermine the “commonality” element required for class claims.

3. Time Records Alone Are Not Enough

The plaintiffs relied heavily on time records and an expert survey to prove widespread violations. The Court of Appeal emphasized that these data sources were not conclusive:

  • Time entries can reflect voluntary choices rather than employer-caused violations.
  • Statistical surveys can be challenged for accuracy, methodology, and reliability.

The Court explained: “In Donohue, the Supreme Court held that a rebuttable presumption of liability arises when an employer’s time records show employees suffered noncompliant meal periods…. [But] it does not result in ‘automatic liability’ for employers.”

4. Employee Declarations Can Make or Break the Case

The court emphasized that testimony from employees themselves could rebut the presumption of liability. As the opinion explained:

“None of plaintiffs’ authorities bar the use of anecdotal testimony to rebut the presumption of liability….Pointing to class members’ conflicting deposition testimony, Dignity argued ‘class member testimony show[ed] wide variation of relevant experiences’ regarding meal period compliance and premium requests. For example, one RN testified that she ‘sometimes chose not to request premiums’; another testified he may have clocked in early from lunch on occasion because he ‘lost track of time’; and another RN stated she did not take a meal period on days when she wanted to go home sooner. In sum, Dignity argued ‘[n]early all of [the deponents] agreed their records were not entirely reliable indicators of when breaks were missed, late, or short because they sometimes chose to skip, shorten, or delay a meal period, or because they simply made mistakes.’”

5. The Decision Affirms Employer’s Defenses to Class Certification and Offers Guidance for PAGA Cases

The Allison decision confirms that employers can—and should—seek decertification when discovery shows that individual issues predominate. This is particularly relevant in:

  • Industries with variable work patterns (healthcare, hospitality, retail, etc.),
  • Cases relying heavily on time records without context,
  • Situations where employee choice plays a role in break practices.

While Allison itself was not a PAGA case, its reasoning also provides a roadmap for employers facing PAGA claims, since courts are increasingly scrutinizing manageability when individualized issues predominate.  By proactively documenting break compliance, training supervisors, and preserving favorable employee testimony, employers can create the evidence needed to challenge certification.

Final Thoughts

Allison v. Dignity Health is a timely reminder that wage and hour class actions cannot simply be determined based on a review of time records.  Courts will look closely at whether the plaintiff’s theory can truly be proven with common evidence—or if individual differences make a class unmanageable.

For California employers, the takeaway is clear: invest in compliance now, ensure accurate employment policies, train supervisors on wage and hour compliance, and don’t hesitate to revisit class certification if the facts support it. Allison also underscores the value of conducting robust discovery and developing evidence that highlights employee choice and variation — tools that can be decisive in defeating class certification.

Mediation is all about finding common ground. As I discussed in my prior article, Mediation in Litigation: Five Key Tips for Success, employers can approach mediation far more effectively when they understand not only what mediation is, but also the tools that may be used during the process. One of the most common — and often misunderstood — tools is called bracketing. This week’s Friday’s Five covers what bracketing is, why it’s used, and five key points for negotiating effectively with it.

1. What Bracketing Is (and Why It Matters)

Bracketing is when one party proposes a range of settlement numbers rather than a single offer.

Example: Instead of saying:

“We’ll offer $75,000,”

A party might say:

“We’ll move to a bracket of $50,000 to $150,000.”

The range itself is important, but often the midpoint is what the other side focuses on. For example, if you propose a bracket of $100,000–$200,000, the midpoint ($150,000) might be interpreted as the settlement zone you are signaling—whether you mean to send that message or not.

Bracketing can change the tone of the negotiation. Instead of fighting over whether the next offer should be $90,000 or $95,000, a bracket reframes the discussion to “are we negotiating in this general range?” That shift can open the door to resolution.

2. Why Mediators Use Bracketing

Mediators often suggest bracketing when the parties are far apart and traditional back-and-forth offers aren’t making progress. Common reasons include:

  • Signaling flexibility without commitment: Bracketing lets a party suggest a broader settlement zone without moving all the way to a specific number.
  • Resetting unrealistic expectations: If one side is anchored to an extreme number, a bracket can re-center the conversation toward a more reasonable range.
  • Testing the waters: Sometimes a mediator uses brackets to see if there’s overlap between what the parties might accept without forcing either side to commit yet.

By shifting from fixed offers to a flexible range, mediators can reduce tension and focus the discussion on zones of potential agreement rather than positional bargaining.

3. Strategies for Using Bracketing Effectively

If you decide to bracket, you need a plan. Here are some ways to use it to your advantage:

  • Control the midpoint narrative: Even though mediators sometimes say “don’t read too much into the midpoint,” experienced negotiators know that’s often exactly what the other side will do. Offer ranges that have a midpoint you can live with.
    • Example: If you want to settle around $125,000, offering a bracket of $100,000–$150,000 can steer discussions toward that zone.
  • Use bracketing to reset expectations: If negotiations are stuck in small moves, proposing a range can disrupt the “inch-by-inch” stalemate and invite more meaningful movement.
  • Make it conditional: To avoid giving away too much, you can make your bracket contingent on the other side offering their own bracket.
    • Example: “We’ll bracket at $80,000–$120,000 if you’ll come in at $100,000–$140,000.”
  • Communicate clearly with the mediator: Make sure they understand whether your bracket is a firm settlement zone or simply a testing range. Without clear communication, the mediator may present your bracket with more flexibility—or more rigidity—than you intend.

4. What to Watch Out For

While bracketing can be useful, it carries risks if not handled carefully:

  • Revealing your bottom line: If your bracket’s midpoint is close to your true walk-away number, you may tip your hand too early.
  • Perception of weakness: Offering a range that makes large concessions can signal desperation and invite the other side to push for even more.
  • Misinterpretation: Without clear framing, your bracket could be taken as your actual settlement zone, even if it was meant as a discussion tool.

Think ahead: if the midpoint becomes the focal point, are you prepared to defend or move from it?

5. When to Decline to Bracket

You’re never required to use bracketing just because a mediator suggests it. Situations where you might decline include:

  1. You’re near your last, best, and final offer. Bracketing could pressure you into revealing a range you’re not comfortable with.
  2. The facts or liability issues are still unsettled. If there’s a major dispute over legal or factual issues, negotiating numbers through a bracket may be premature.
  3. The other side is fishing for your number. If they won’t reciprocate with their own bracket, you may be giving away strategic information for free.
  4. The midpoint doesn’t work for you. If the mediator is pushing a midpoint that’s outside your acceptable range, it’s okay to walk away from the bracket discussion.

Final Thought

Bracketing can be a powerful settlement tool when it’s used strategically. The key is preparation:

  • Know your real settlement range before you start.
  • Work closely with your attorney to frame brackets that advance your position.
  • Understand that the midpoint will often be interpreted as your target—so choose carefully.

And remember: just because bracketing is offered doesn’t mean you have to use it. Only bracket when it serves your negotiation goals.

In a July 2025 decision, the California Court of Appeal for the Fifth Appellate District ruled that so-called “headless PAGA” lawsuits are allowed—actions in which a plaintiff drops their own Labor Code claims but continues to pursue penalties on behalf of other employees under the Private Attorneys General Act (PAGA). This holding, in CRST Expedited v. Superior Court, intensifies an existing split among California appellate courts and sets up a definitive ruling by the California Supreme Court in Leeper v. Shipt, Inc.

Here are five things California employers should know about this growing legal divide and its implications:

1. What Is a “Headless” PAGA Case?

A “headless PAGA” case refers to a situation where a PAGA plaintiff disclaims or dismisses their individual claims—typically to avoid arbitration pursuant to an agreement to arbitrate all employment issues—and instead continues only with representative claims on behalf of other allegedly aggrieved employees. These plaintiffs argue that they may proceed solely as proxies for the State of California to enforce the Labor Code, even if they no longer pursue any relief for themselves.

This procedural strategy aims to bypass arbitration agreements that contain a class action waiver and require the plaintiff to arbitrate their individual claims prior to being a representative in a PAGA case.  These arbitration agreements have been upheld by the US Supreme Court in Viking River Cruises v. Moriana. 

2. CRST Expedited v. Superior Court: The Fifth District Approves Headless PAGA Claims

In CRST Expedited, the plaintiff initially asserted both individual and representative PAGA claims. After the court compelled the individual portion to arbitration, the plaintiff voluntarily dismissed those claims and proceeded in court with the representative portion alone—thus rendering the case “headless.”

The employer argued this stripped the plaintiff of standing. The appellate court disagreed, finding that the statutory phrase allowing an aggrieved employee to bring a civil action “on behalf of himself or herself and other employees” was ambiguous. The court reasoned that the word “may” is permissive, and to promote PAGA’s core purpose of Labor Code enforcement, the word “and” could reasonably be read as “and/or.”

In short: the Fifth District held that plaintiffs may bring representative PAGA claims even after discarding their own, at least under the version of PAGA in effect before the July 1, 2024 amendments.

3. Leeper v. Shipt, Inc.: The Second District Says “No” to Headless PAGA

In a prior case, the Second District Court of Appeal reached the opposite conclusion in Leeper v. Shipt, Inc., holding that every PAGA action inherently includes both individual and non-individual claims. According to Leeper, a plaintiff cannot surgically remove their own claim to avoid arbitration and still retain standing to prosecute claims on behalf of others.

The court emphasized that under the ordinary reading of the statute, the phrase “on behalf of himself or herself and other employees” requires inclusion of both types of claims. It argued that allowing purely representative (headless) actions rewrites the statute and undermines legislative intent.

4. The California Supreme Court Will Decide: Leeper Now Under Review

On April 16, 2025, the California Supreme Court granted review in Leeper, even though neither party petitioned for it. This rare move reflects the urgency and importance of resolving this issue, which is also been addressed in Williams v. Alacrity Solutions Group, which is also under review pending Leeper.

The Court has asked the parties to address two key questions:

  1. Does every PAGA action necessarily include both individual and non-individual PAGA claims, regardless of whether the complaint expressly alleges them?
  2. Can a plaintiff choose to bring only a non-individual PAGA action?

Employers across California should closely watch for this decision, which could significantly reshape how PAGA claims are structured and litigated.

5. Key Takeaways and Employer Action Items

While the legal landscape remains uncertain, California employers should:

  • Review arbitration agreements carefully. Language and structure still matter—and may determine how courts handle bifurcated claims.
  • Proactively audit wage-and-hour practices. The best defense to PAGA claims remains full compliance and routine audits and training to potentially cap PAGA penalties at 15%. Learn more about how employers can reduce their liability by routine audits in our prior article here.
  • Track the Leeper and CRST developments closely.
  • Consider the cost of delay and dual-forum litigation.
  • Consult experienced employment counsel to tailor strategies to this shifting environment.

Final Thoughts

The CRST Expedited ruling and the issue of headless PAGA cases will impact California’s PAGA landscape. With the California Supreme Court set to resolve the issue in Leeper, now is the time for employers to audit their arbitration agreements, examine potential PAGA exposure, and stay informed.

Need help reviewing your policies or responding to a PAGA notice? Our team is actively helping clients defend PAGA claims as well as advising on proactive steps to mitigate PAGA exposure. 

In today’s employment climate, workforce scheduling isn’t just an operational issue—it’s a legal one. With increasing scrutiny over wage and hour practices, California employers must understand the boundaries when it comes to scheduling flexibility. While California has not adopted “predictive scheduling” mandates on a statewide level, that doesn’t mean employers are in the clear. Local ordinances, case law, and existing Wage Order obligations all come into play.

Here are five key scheduling considerations that sophisticated employers in California must understand:

1. No Statewide Predictive Scheduling—Yet

There is currently no state-level law requiring predictive scheduling in California. However, that hasn’t stopped individual municipalities from stepping in.

Local Ordinances to Watch:
Los Angeles’ Fair Work Week Ordinance mandates that certain retail employers provide 14 days’ advance notice of schedules and penalizes last-minute changes. Other jurisdictions, like San Francisco and Emeryville, have enacted similar rules for specific industries.

Legislative Landscape:
The California Legislature regularly considers predictive scheduling proposals—SB 878 (2016) being one of the more ambitious attempts. It would have required 28 days’ advance scheduling for retail, grocery, and restaurant workers. While no such bill has become law as of 2025, employers should expect continued efforts in this area.

Key Takeaway:
Even in the absence of a statewide mandate, California employers should proactively monitor local developments and consider adopting consistent scheduling practices across jurisdictions to mitigate risk.

2. Reporting Time Pay Obligations Remain a Trap for the Unwary

Under California’s Wage Orders, “reporting time pay” rules create de facto scheduling obligations.

Basic Rule:
If an employee reports to work but is not provided at least half of their usual or scheduled day’s work, they must be paid for at least half the day—no fewer than two hours and no more than four—at their regular rate (not below minimum wage).

Second Reporting Rule:
If the employee is asked to return later that same day and receives less than two hours of work during the second shift, the employer must pay two hours at the regular rate.

Best Practice:
Avoid scheduling practices that result in employees being sent home early unless you’re prepared to pay for their time. Review timekeeping systems and scheduling workflows to ensure compliance.

3. Mandatory Meetings and On-Call Calls May Trigger Reporting Time Pay

Several recent cases have expanded what it means to “report for work,” with serious implications for on-call practices and short-notice meeting requests.

Court Guidance:

  • Ward v. Tilly’s, Inc.: Requiring employees to call two hours before a potential shift was deemed a form of “reporting,” triggering reporting time pay.
  • Price v. Starbucks: Calling employees into work on a non-scheduled day, even for a short meeting, can obligate employers to provide two to four hours of pay depending on the employee’s usual shift.
  • Aleman v. AirTouch: No reporting pay is required when employees are scheduled for two hours or less and work at least half of that time.

Key Insight:
Employers relying on on-call scheduling or last-minute meeting attendance must review their practices to ensure they’re not inadvertently creating reporting time pay liabilities.

4. Split Shifts: Small Oversight, Big Risk

California’s Wage Orders define a split shift as a schedule interrupted by unpaid, employer-mandated breaks (excluding bona fide meal or rest breaks). These arrangements can trigger additional compensation requirements.

Split Shift Premium:
Employees must be paid one extra hour at the state (or local) minimum wage rate. However, if the employee earns enough over minimum wage, this can offset the premium.

Example:
An employee earning $10/hour works two separate shifts totaling 8 hours in one day. As an example, if the applicable minimum wage is $8/hour, the $16 in “excess wages” earned over minimum wage offsets the split shift premium.

Compliance Tip:
Review shift structures in retail, hospitality, and food service operations, which often use staggered schedules. Even if you’re paying above minimum wage, it’s critical to document how those wages are calculated to offset the premium.

5. On-Call and Travel Time: Control Is the Key Metric

Time spent on-call or traveling may be compensable—even if no actual work is performed—if the employee is under the employer’s control.

Critical Cases:

  • Mendiola v. CPS Security Solutions, Inc.: Security guards required to stay overnight in trailers were entitled to pay for all hours on call, including sleep time.
  • Morillion v. Royal Packing Co.: Agricultural workers required to ride employer-provided buses were entitled to compensation for the travel time.

Strategic Consideration:
If your employees are subject to mandatory check-ins, required to remain on premises or use company-provided transportation, their “non-working” time may still be compensable. Review on-call policies and travel logistics to ensure proper wage payments.

Final Thoughts

In a state with aggressive wage and hour enforcement and a high volume of class and PAGA actions, employers must treat scheduling as a compliance priority. While predictive scheduling isn’t law statewide, the legal framework already imposes several indirect but significant scheduling obligations through reporting time pay, split shift premiums, and case law.

Proactive audits, strong documentation, and clear policies are your best defense. Make sure your legal and HR teams are aligned—and stay alert to the legislative horizon.

The financial strain caused by federal taxes on tips and overtime pay has long been a burden for service workers and the employers who support them. In a historic bipartisan move, the “One Big Beautiful Bill” has been signed into law, delivering on promises to eliminate federal income tax on tips and overtime.

Zaller Law Group and TipHaus are proud to have supported this effort, advocating for legislation that directly improves the lives of millions of American workers and strengthens the hospitality industry. Here’s what you need to know:

1. A Landmark Win for Workers — and Bipartisan Cooperation

The “No Tax on Tips and Overtime” policy had rare bipartisan momentum:

  • Donald Trump, who made it a campaign pledge.
  • Kamala Harris, who voiced strong support during her own run.
  • President Biden, whose administration confirmed he would sign the legislation if passed.

On Friday, July 5, 2025, the bill was officially signed into law. This is a transformative moment for the hospitality sector, acknowledging the critical role that tipped and overtime-reliant workers play in the U.S. economy.

2. What’s in the Law: How the Deductions Work

 No Tax on Tips

  • Workers can now deduct up to $25,000 in tip income above the line on their federal return.
  • Applies to tips that are voluntarily paid — not mandatory service charges.
  • Available from tax years 2025 through 2028.
  • Phases out for individuals earning more than $150,000 (or $300,000 for couples).

 No Tax on Overtime

  • Deduction of up to $12,500 per individual, or $25,000 for couples filing jointly.
  • Only applies to FLSA-defined overtime — not state-only or contractual OT. Therefore, California’s daily overtime earned for work over eight hours in one day would not be eligible for this tax benefit.
  • Follows the same income and time limits as the tips provision.

While state/local taxes and payroll taxes still apply, the federal income tax relief is estimated to save workers thousands annually.

3. Implementation Still in Progress

The IRS and Treasury Department will now begin the process of writing the rules that guide:

  • Which jobs and positions are eligible.
  • How tips and OT must be reported.
  • What counts as a qualified tip or overtime payment under the law.

Employers should be ready to adapt their payroll and reporting systems — and expect further clarification in the coming months.

4. Zaller Law and TipHaus: Supporting the Hospitality Industry

From the beginning, Zaller Law Group and TipHaus have been strong advocates for tax policy that reflects the reality of working in the service sector and are proud to have submitted over 4,000 signatures in support for the no tax on tips and overtime bill. This win represents:

  • A culmination of months of engagement with stakeholders and policy leaders.
  • Continued legal and payroll support for restaurant operators and hospitality employers.
  • A clear opportunity to retain staff, reduce turnover, and attract top talent through a more financially rewarding work environment.

We’re proud to have helped shape the conversation and push for smart reforms.

5.  What’s Next for Employers

While the law offers much-needed relief, it also brings new considerations:

  • Reworking W-2 classifications to reflect tip/overtime separation.
  • Determining which staff fall within the qualified categories.
  • Preparing documentation to support employees who take the new deductions.

As new rules emerge, Zaller Law Group will continue to advise employers on compliance, risk management, and payroll readiness. And TipHaus remains committed to giving operators the tools to track and report tip earnings with clarity and precision.

A Win for Workers, A Boost for Business

The “No Tax on Tips and Overtime” law is not just a political victory — it’s a practical one. It makes the hospitality industry more competitive, puts more money in workers’ pockets, and reflects long-overdue recognition of how these jobs power our economy.

Zaller Law Group and TipHaus will continue to champion forward-thinking solutions that support employers and elevate the employee experience in hospitality.

We would like to thank the over 4,000 people and businesses who signed our petition to support this effort. Your voices helped drive this important change, and we’re honored to have worked alongside you to make it happen.

I have published this post since 2015 (I cannot believe this year marks a decade of publishing this article) recognizing the Fourth of July. This is one of my favorite holidays.  Hopefully I’ll be able to keep publishing it for many years to come.  Wishing you a great Fourth, and hope you have some time to put aside your work for a bit and enjoy some time with your family.  Happy Fourth of July!

Five things I’m thankful for this Fourth of July:

1.     For the great risk and sacrifice our Founding Fathers took to establish the country. 

When learning about the Founding Fathers in high school history class I did not have a perspective about the risks the Founders took in establishing the country.  Only now that I have a business, a family, and am relatively successful, can I realize the huge risks the Founders took.  By all means, they were the establishment, the elite of the American society, and if anyone had an interest in preserving the status quo, it was them.  Their sacrifices of life (theirs and their family members) and their fortunes helped build the foundation we benefit from today.

2.     The ability to speak freely and practice (or not practice) any religion I want.

It is great being able to freely speak your mind and believe in whatever you want.  It is also great be free to practice (or not) any religion you want.  We live in a very tolerant society, and it is even better when the government is not telling you how to live your life.  It is important to remember that throughout history, this is the exception for how a government normally behaves.

3.     Our Country’s ability to attract creative people.

Creative and productive people want to practice their trade where the government will basically leave them alone and provide a good environment to protect their gains derived from their hard effort (see item #5 below).  The U.S. provides this environment, and that is why so many people come to the U.S. to create a business or to practice their trade.  It is also important to recognize how lucky we are to be in the U.S.

4.     My right to practice any profession and access unlimited resources to learn required skills.

No one is dictating what students need to be after they graduate high school or college.  Everyone is free to pursue their interest, and the market decides the value of the effort.  With basically any information freely available on the Internet, anyone can learn almost any skill, and like no other time in human history individuals have an almost free method to sell their services or products over the Internet.  In your mid-40’s and want to make a career change?  Perfect, and you don’t even need to go back to school as the information is freely available on the Internet.  Didn’t finish college and are 20 years old with an idea?  Perfect.  Venture capitalists don’t care about your pedigree, they are only interested if you work hard and don’t give up.

5.     Our legal system.

Yes, it sounds trite.  But while I don’t think our legal system is perfect by any means, it is the best system established in the history of mankind.  Everyone living in the U.S. presently is very lucky to have this benefit.  It is a foundation for many of the items I mentioned above.  Because people have a good basis for predicting the outcomes of their actions, such as being able to retain property legally obtained, and knowing if someone breaches a contract there will be repercussions, it creates an environment that attracts hard effort and the best talent from around the world.  This is why the U.S. has been the leader in ideas and new businesses.  However, just because the system is established does not mean our work is done.  We have to be vigilant not to lose the fairness, reasonableness, and lack of corruption in the legal system.

Happy Fourth of July!

AI is no longer just a buzzword—it’s actively transforming the workplace. Whether employers are aware of it or not, AI tools are being embedded into daily operations across industries. With California pushing forward with proposed regulations that could take effect as early as July 1, 2025, employers must begin understanding the implications now. Here are five essential points to keep in mind:

1. AI Is Already in the Workplace—and Use Is Expanding

Many California employers are already using AI—even if only in limited ways. One of the most common use cases is resume screening. Large employers facing thousands of applications use AI to quickly sort resumes and identify the most qualified candidates. AI is also being used to:

  • Draft employee communications: HR teams are using tools like ChatGPT to write performance reviews, disciplinary notices, or coaching emails.
  • Assist in onboarding: Chatbots can guide new hires through paperwork, benefits enrollment, and training schedules.
  • Enhance recruiting: Some available tools use video analysis and natural language processing to assess applicant responses.

Even managers are using AI to brainstorm better ways to give feedback or handle difficult conversations.

Example: An HR manager struggling to coach an underperforming employee may use ChatGPT to draft a constructive and empathetic email, saving time and ensuring the message is clear and legally sound.

2. California Is Leading with New AI Employment Regulations

California’s proposed Automated Decision Systems (ADS) regulations aim to ensure that AI tools used in employment decisions are fair, transparent, and compliant with anti-discrimination laws (see our prior article on the proposed regulations here). These rules are considering implementing the following:

  • Potentially require notice to applicants when AI tools are used
  • Mandate anti-bias testing and corrections
  • Impose a four-year recordkeeping requirement
  • Apply to vendors and hold employers legally responsible for third-party tools

The regulations are designed to prevent unintentional discrimination—such as AI tools screening out candidates with gaps in employment (which may affect women or caregivers more).

Example: If your company uses AI to rank candidates and the system deprioritizes people who’ve taken career breaks, that could result in a discriminatory impact. Under the new rules, you’d need to detect and fix that.

3. Employers Are Still Liable—Even When AI Makes the Decision

You can’t delegate legal responsibility to an algorithm. If an AI screening tool inadvertently excludes protected classes (e.g., based on age, race, or disability), your business is still liable under existing discrimination laws.

A current case in California, Mobley v. Workday, involves a 40+ year-old Black man who alleges he was repeatedly rejected by AI tools used by employers. The case is moving forward under current federal and state anti-discrimination laws.

Example: Even if a third-party software provider made the AI, if it screens out applicants unfairly, and your business uses it, your company can be sued under FEHA or Title VII.

4. AI May Actually Help Reduce Bias—When Used Correctly

There’s hope for AI to help level the playing field. A study by researchers at Stanford and USC found that AI-led hiring processes were more successful at identifying qualified candidates—particularly younger, less experienced, and female applicants—than traditional resume reviews and human interviews.

AI can promote a more “blind” evaluation process, reducing the potential for human bias related to names, photos, age, or education pedigree.

Example: A company replaces its initial resume screening with a structured AI interview system. The result? A more diverse candidate pool, selected based on skills and responses, not superficial traits.

5. Wearables and AI Tools Raise Serious Privacy Concerns

With tools like AI-powered glasses (like Google’s new Gemini glasses) and Zoom note-takers, privacy risks are growing. These tools can record conversations, analyze speech, and even recognize faces. California is a two-party consent state—recording without consent is illegal and could lead to criminal and civil penalties.

Example: An employee shows up wearing smart glasses that record everything they see and hear. If they record private conversations without the other party’s consent, it could violate California Penal Code section 632 and create liability for the employer.

Employers should start preparing policies or training on the use of wearables and AI tools in the workplace—even if a formal “AI governance policy” feels premature.

Final Thoughts

AI can help your business stay compliant, attract better candidates, and operate more efficiently—but only if you understand the risks and responsibilities. Think of it like a powerful new employee: it needs supervision, training, and accountability. Don’t wait until your competitors—and the regulators—are ahead of you.

Start small. Use AI to help HR draft communications or streamline workflows. Just be sure you pair every tool with legal oversight and human judgment.

As Tony P’s Dockside Grill prepares to close at the end of June, I’ve found myself reflecting on the profound impact Tony Palermo has had on my life — not just professionally, but personally and profoundly.

I first met Tony P when I was a newly minted lawyer in the early 2000s. My wife and I were having dinner on the patio at Tony P’s — a place that would soon become like a second home — when I heard about a golf tournament hosted by the California Restaurant Association. Knowing the law firm was working at had a connection to the CRA, I decided to cold call Tony and ask if I could join.

He didn’t hesitate. “Sure,” he said warmly, “I’ll set you up with a great foursome.” That simple act of generosity sparked a friendship — and a career trajectory — that I could have never predicted. The partner he placed me with, Greg McNally, became a friend, a client, and a key connection in my journey within California’s restaurant industry.  Greg and I still talk a lot and try to play together in the annual golf tournament. That was just Tony: welcoming, kind, and a connector of people.

A Mentor in Hospitality and Leadership

Tony’s influence extended far beyond that first golf tournament. In 2005, he was instrumental in encouraging me to join the California Restaurant Association Los Angeles Chapter Board of Directors. He believed in my potential when I was still finding my voice as a young attorney. And when I made the leap to start my first law firm in 2007, Tony was there with a smile and a signature Tony P line:

“Well, if it doesn’t work out… at least they can’t take your birthday away from you.”

That line has stuck with me ever since — a reminder to bet on yourself, and to keep your perspective no matter what.

A Place Full of Memories

Tony P’s wasn’t just a restaurant. It was our family’s place. Since my mom first met Tony in 1999 to plan my LMU graduation dinner, we’ve celebrated a lot of events there: birthdays, Friday night dinners, wedding parties, and law firm holiday gatherings.

My wife and I have likely shared over 500 dinners there with our three boys. That spacious, scenic outdoor patio was the perfect refuge for a young family — a place where our kids could be noisy, and we could relax, watch the boats drift by, and enjoy some “no bones about it” (my favorite), bread bowl clam chowder (some of the best I’ve had), burgers, or a round of Tony’s famous Mai Tais.

It became our go-to recommendation for visiting family and friends. Because when you brought someone to Tony P’s, you were bringing them into the heart of Marina del Rey.

The Interview That Said It All

In 2011, I had the privilege of sitting down with Tony for an interview as part of my video series Just Ship It. That conversation was a masterclass in hustle, heart, and the grit it takes to succeed in the restaurant business. Tony shared how he started working in kitchens at age 13 in Detroit, eventually building his culinary foundation through experience, grit, and mentors he called his “angels.”

From those early days — boning out lamb legs in a European-style kitchen, sleeping at the restaurant during remodels, to opening Teasers in Santa Monica and eventually Tony P’s Dockside Grill in 1997 — Tony’s story is an American success story. No silver spoon, no shortcuts. Just hard work, long hours, and a deep love for hospitality.

He spoke candidly in the interview about the realities of the business:

“The restaurant business is hard — but it’s no secret. It’s good food, good service, reasonably priced, and giving people what they want. But to do that, you’ve got to work a lot.”

The video is something I’ll always treasure — a lasting testament to Tony’s wisdom, grit, and generous spirit. You can watch it below.

More Than a Restaurateur — A Community Builder and an “Angel”

Tony wasn’t just running a restaurant; he was building a community. He preached getting involved: in the local chamber, in nonprofit work, and in the CRA. In that same interview, he said:

“Most restaurant guys are the mayor of their own city — but you’ve got to reach out to the other cities.”

Tony and his business partner, Dan Ringwood, didn’t just talk about giving back — they lived it. From fundraisers and legendary beer dinners (where Tony crafted everything on the menu, even the ice cream) to supporting over 400 nonprofits, their generosity rippled throughout the community. Tony P’s wasn’t just a restaurant on the water — it was the heart of Marina del Rey. That spirit extended to the next generation too: Tony and Danny hosted nearly every kindergarten class from St. Anastasia, giving local kids an unforgettable field trip filled with behind-the-scenes tours, laughter, and hands-on learning. For so many, their first real taste of the restaurant world — and of community — began at Tony P’s.

A Legacy That Will Outlive the Closing

The closing of Tony P’s Dockside Grill marks the end of an era, but Tony’s legacy lives on — in the careers he helped launch, the families he fed, the friendships he sparked, and the culture of community he championed. As someone who started as a customer, then became a mentee, friend, and forever fan, and an angel for me, I can say with deep gratitude: Thank you, Tony.

Thank you for welcoming a young lawyer into the restaurant world. Thank you for the laughter, the lessons, and the late nights filled with stories. Thank you for giving my family a place to grow up around a table.

Enjoy your well-earned retirement, Tony and Danny. You’ve fed a city — and you’ve filled our lives with joy.

— Anthony Zaller

The ramping up of enforcement by Immigration and Customs Enforcement (ICE) across California has been expected for some time now. We have hosted multiple webinars earlier this year with this expectation, and now is a good time to review the materials again. What we’re seeing now is not a surprise, and the focus on employer compliance, especially in high-risk sectors like hospitality, agriculture, and construction was anticipated since the end of 2024. Employers who take proactive steps now will be in a far better position to avoid disruption and penalties later.
Here are the key actions California employers should take now:

1. Should You Conduct an I-9 Audit Now?

Yes — and it’s never too early to start.

ICE has emphasized that employers are expected to self-police their I-9 compliance. Internal audits are not only allowed, they are encouraged, provided they are performed in a non-discriminatory manner and any corrections are well-documented.

Some best practices include:

  • Use the latest Form I-9 (dated 01/20/25).
  • Review all sections for completeness and accuracy.
  • Do not backdate changes — cross out errors, correct, and initial with today’s date.
  • Attach memos explaining corrections where necessary.
  • Retain I-9s separately from personnel files for quick access.

Employers must retain I-9s for three years after the date of hire or one year after the date of termination, whichever is later. See our prior post on Form I-9s: Navigating Compliance in 2025, for more information for employer’s responsibilities for Form I-9s.

2. Training Managers and Frontline Staff

Your frontline managers are your first line of defense — and often the first to interact with ICE agents.

Items to consider for training:

  • How to verify documents without discriminating based on nationality or appearance.
  • What to do if ICE arrives: Do not allow entry without a valid subpoena or judicial warrant. Direct agents to the designated company contact.
  • How to post notices (required under California Labor Code within 72 hours of receiving a Notice of Inspection).
  • Document retention and audit procedures.

Consider mock ICE audits or walkthroughs to familiarize managers with response procedures.

3. What Should Employers Say to Employees?

Clear and lawful communication with employees is essential.

When ICE Contacts You or Conducts a Raid:

  • Do not question employees about their immigration status.
  • Do not retaliate or take adverse action based solely on a Notice of Suspect Documents.
  • Post the required employee notification within 72 hours of receiving an inspection notice, per California law.

4. Preparing for ICE Raids or Audits

Create a response plan:

  • Designate a point person and a legal contact (internal or external).
  • Store I-9s centrally — not in personnel files — for fast retrieval.
  • Maintain electronic systems with audit trails and secure document transmission protocols.
  • Consider enrolling in E-Verify (required for remote I-9 verification).

During a raid or visit:

  • Do not voluntarily consent to searches or to allow ICE access to private areas of the business.
  • Do not let ICE into non-public areas without a judicial warrant.
  • Politely decline to provide records until legal counsel is consulted.
  • Keep a log of all interactions with ICE agents.
  • Provide documents only in accordance with the Notice of Inspection or subpoena.

5. Electronic I-9s and Remote Verification

If you use an electronic system to store I-9s:

For remote hires, only E-Verify-enrolled employers may use remote I-9 verification. Be sure to follow all steps, including live document review via video and storing secure copies.

Final Thought: Prepare Now, Avoid Disruption Later

An ICE audit or raid can disrupt the flow of business and may lead to fines for employers. By auditing now, training your team, and establishing clear procedures, you can protect your business from unnecessary penalties and ensure compliance with both state and federal law.