January 2012 Archives

Wage and hour lawsuit. Did that phrase just send a chill down your spine? In house counsels face a myriad of legal issues every day. Employment law is one of these thorny subjects. Violations of wage laws can result in costly litigation.

It's a lesson that drugmaker Novartis found out the hard way. The company is now paying $99 million in order to settle a class action lawsuit filed by its sales representatives.

The sales representatives claimed they were entitled to overtime pay. Novartis asserted otherwise. It said the employees should be considered exempt.

The footwear battle between iconic French fashion labels Christian Louboutin and Yves St. Laurent (YSL) over red shoes is heating up.

Since 1992 Louboutin made shoes with a very specific signature: "Chinese red" soles. The designer thought it gave his footwear a specific "energy."

Louboutin sold 240,000 pairs of shoes priced at $1,000 a pop since then. That's why the company was none-too-pleased when YSL made shoes with the same signature sole. They trampled on Louboutin's toes, if you will.

Health care giant Johnson & Johnson has settled its Medicaid fraud lawsuit in Texas for $158 million.

The company had faced potential fines of up to $1 billion.

The suit centered on the anti-psychotic medication Risperdal. Johnson & Johnson was accused of fraud.

As the Internet's downloading denizens frantically looked for new content sources, file-sharing site Megaupload began to assemble a legal team to fight last week's criminal indictment.

On Friday, well-known defense attorney Robert Bennett was announced as Megaupload's lawyer. But by Monday, the Hogan Lovells attorney had resigned.

Sources cite a conflict of interest.

Iconic photography company Eastman Kodak has filed for Chapter 11 bankruptcy protection.

Kodak has been in business for 131 years. The company pioneered innovations in print film. It was widely considered the "Google" of its day. Kodak film accounted for 90% of the market in 1976. Kodak cameras accounted for 85% of the camera market.

Up through the 1990s the company was heralded as one of the top 5 most valuable brands, according to The Economist. Ironically, its downfall can partially be attributed to its own innovation: the digital camera, invented by Kodak in 1975.

The Jacksonville Jaguars' Paul Vance apparently fumbled in drafting a series of team contracts, and now he's out of a job.

The Jaguars' new owner fired Vance as the team's general counsel and vice president of football operations Sunday, ESPN reports. A potentially costly typo is likely to blame.

The typo appears in the contracts of seven former assistant coaches who signed contract extensions in 2010, according to ESPN.

The team intended the extensions to last two years, through the end of the 2011 season. Instead, the contracts explicitly state the agreements "shall terminate on the later of January 31, 2012 or the day after the Jaguars' last football game of the 2012 season and playoffs," according to ESPN.

A class action lawsuit has been filed against Walgreen Co. and Par Pharmaceutical Cos. The suit alleges that Par and Walgreens overcharged insurance companies, self-insured employers and union health funds for generic drugs.

Cheaper prescription-drug tablets were switched out for more expensive capsules. This was done in order to improve the companies' bottom lines.

The suit was filed in federal court in Chicago. It claims that the two companies were involved in the scheme together.

New Yorker Minhee Cho stopped by a Papa John's pizza chain for dinner last week. Cho ended up slapped with a racial slur -- on her Papa John's receipt.

The store employee typed out that her name was "lady chinky eyes."

Cho, a communications manager for an investigative journalism non-profit, tweeted a picture of the offending receipt. The photo went viral. The company is now facing a flurry of criticism and negative publicity.

A spokesperson for the Equal Employment Opportunity Commission announced on Wednesday that the agency has extracted a $3.1 million settlement in a racial bias suit filed against PepsiCo.

The EEOC's Pepsi suit focused on the company's policy of not hiring workers who have arrest records, as well as those convicted only of minor offenses. Though applied neutrally, the policy disproportionately affected African-American job applicants.

Approximately 300 of those applicants will share in the settlement monies.

An iconic American bakery brand, Hostess, is bankrupt again, and the company is blaming costly labor agreements for eating away at its bottom line.

Hostess Brands Inc. filed for Chapter 11 bankruptcy protection Wednesday, and retained BigLaw firm Jones Day as counsel for bankruptcy proceedings, The Wall Street Journal reports.

Rising pension and medical-benefits costs are the main reasons for Hostess' bankruptcy, the company said in court papers. To address those issues, Hostess plans to continue talks with 12 employee unions that represent 83% of the company's workers, the Journal reports.

Here's a recent New York ruling worth sniffing. Judge Jed S. Rakoff temporarily barred Clorox from airing its cat litter ads. He agreed with Clorox rival Church & Dwight's assessment that the ads would cause irreparable harm.

Church & Dwight makes Arm & Hammer cat litter. The company sued Clorox for running ads that said carbon-treated cat litter was better at combating odors compared to baking soda.

The long-awaited Google-Oracle trial will take place in mid-March.

In case you've forgotten, the legal dispute is about patents. Oracle brought a patent infringement suit against Google over Java, which is used on Google's Android operating systems.

Tech company Sun Microsystems was the original creator of Java. Oracle acquired Sun in 2010.

Let's face it: you'd rather have your employees report securities violations to you first before they tell the SEC.

Internal reporting has its advantages. You'll be better prepared. You also won't get suddenly drawn into a SEC investigation without prior warning.

But how do you get your employees to report violations to you first? Below are a few tips to help:

Blueseed, a Silicon Valley startup, is raising funds to construct a floating incubator that they hope will become the "Googleplex of the Sea."

Their plan is to purchase and renovate a large boat that they will anchor around 12 miles off the coast of San Francisco. There, tech workers can sleep, work, and dodge immigration visa issues.

Does this sound legally tenuous -- or is it simply a clever approach to a common problem?

Consumers rarely opt-out of class action settlements. Some trash the notices and others forget after they're set aside. And if companies are really lucky, a few won't even submit a claim.

But Heather Peters is not an ordinary class member. She's upset with the Honda hybrid settlement and has launched a small claims court campaign. She's urging consumers to take the car manufacturer to court and ask for the statutory maximum.

The worst part for Honda? There may be no lawyers allowed.