In House

In House - The FindLaw Corporate Counsel Blog


Gay marriage is a pretty divisive issue in this country, though it is becoming less so as more states legalize same-sex nuptials. And corporations, typically, steer far away from controversial topics, for obvious reasons.

It is refreshing then, to see Ben & Jerry's join 29 other companies in an "Employers' Amicus Brief" filed in support of same-sex marriage. The brief urges the U.S. Supreme Court to take the case, and to establish a uniform national rule that respects the rights of same-sex couples to tie the knot.

Who else joined them on the brief? And will there be any negative business consequences?

Back in July, John Michael Farren was found guilty of attempted murder for beating his wife, Mary Margaret Farren, nearly to death at their Connecticut mansion in 2010. Farren was a former deputy White House counsel for the George W. Bush administration who, at the time of the assault, was general counsel for Xerox.

But it wasn't over yet. In December, we blogged about the outcome of Farren's civil suit. He was found liable for assault, battery, and intentional infliction of emotional distress to the tune of $28.6 million.

Farren represented himself -- apparently not that successfully -- at both the criminal and civil trials.

A corporation's directors, as agents of the shareholders, are where the buck stops in terms of corporate governance. They're also ultimately responsible for oversight of management.

But executives in the C-suites have much more involvement in the day-to-day operations of the company than the board of directors. As a result, it's more important than ever to have a strong board of directors. That's not always the case, though. Inside Counsel points out that replacing underperforming directors is a concern for at least one-third of directors in a recent PricewaterhouseCoopers survey of corporate directors.

Notably, age is a concern: Can directors effectively govern if they're very old? And if they're not governing effectively, what can be done about it?

The need for attorney-client privilege for in-house attorneys performing internal investigations is obvious: In order to investigate to the best of your ability, and to ensure that employees are as forthcoming as possible, investigations done for the purpose of legal advice need to be covered by privilege.

So how do you keep your privilege and assure that your internal investigation doesn't turn into evidence in a trial? Here are three tips you may want to consider:

Imagine you run a website. We'll call it "Schreddit." It's a website where millions of people around the world post interesting news items, comments, and images. One day, a user posts a link to stolen celebrity nude photos -- celebrities like, oh, we'll call her "Schmennifer Schmawrence." Does your company have to take the posting down?

Naturally, it's the same as the answer to all legal questions: "Maybe. It depends." The Communications Decency Act (CDA) prohibits online obscenity, but that's not very important. Within the Act is a so-called safe harbor provision, found in 42 USC § 230, which immunizes computer service providers from torts committed by users of those services.

If your company operates any kind of online forum, you should make sure you know all about it.

You've probably heard about the inevitable development of the Ray Rice saga. The NFL Pro Bowl running back, who was cut by the Ravens yesterday, was previously suspended for two games after he was charged with felony domestic violence. A video of the aftermath of the incident -- Ray dragging his unconscious fiancé (now wife) out of an elevator -- emerged, creating quite the public relations nightmare, but little in the way of actual consequences.

Ray Rice copped a plea for a pre-trial deterrence program, the NFL suspended him for two games, and the Ravens stood behind him -- until yesterday, when TMZ leaked a video of Ray beating Janay Rice inside the elevator. The incident has created a number of issues: public relations nightmares and collective bargaining/labor law questions.

The concept of ultra vires has generally protected corporate directors from shareholder lawsuits on the ground that the corporation acted outside the scope of its authority. But what if a corporation wants to spend extra money ensuring that, for example, its supply chain is conflict-free? It's probably cheaper to employ slave labor in other countries than it is to contract with manufacturers that are engaging in humane business practices. Arguably, failing to cut costs to the bone impedes shareholder profits and might be grounds for a lawsuit.

Enter the "public benefit corporation," a relatively new type of corporate form that allows corporations to consider motives other than profit when making business decisions.

The date is set. The witnesses are being prepped. And the lawyers are under more pressure than ever to come up with a reasonable settlement.

Have you been missing out on the real-life Silicon Valley drama (as opposed to the hilarious HBO dramedy)? Apple, Intel, Google, and Adobe allegedly agreed to not poach each others' talent, creating the sort of anticompetitive agreement that depresses salaries.

Though initial estimates of the companies' exposure were in the billions range, the companies settled for ... $324 million, a number that made us get our eyes checked, caused one plaintiff to file a formal rejection, and which U.S. District Court Judge Lucy Koh soundly rejected.

Will we see another settlement, or will his head to trial in early January?

Over the Labor Day Weekend, The New York Times published a front-page piece on the rise in "wage theft" claims.

As companies try to cut costs, some employees are being illegally encouraged -- or forced -- to alter their timesheets to reflect fewer hours worked. Such actions violate state and federal labor laws, and though some companies have engaged in the practice as a matter of course, believing that enforcement was scant, enforcement appears to be on the rise.

What should you know if you want to keep your company in compliance and out of court?

The Ninth Circuit has upheld Yelp's practice of manipulating ratings in order to extract advertising fees from businesses.

Several different businesses sued Yelp, all alleging about the same thing: Yelp removed some positive reviews from their business' Yelp pages, causing their ratings to go down. Yelp then appeared on a white horse, offering to "help" them with their negative reviews -- for a price. The subtext (which isn't so sub rosa as it is glaring rosa) is that Yelp intentionally removed positive reviews, then extorted money from the businesses in exchange for restoring the positive reviews (or, alternatively, threatening to remove positive reviews if businesses didn't pay up in the form of buying advertising from Yelp). One business owner signed such an agreement and found that her positive reviews were restored days later.