In House - The FindLaw Corporate Counsel Blog

March 2014 Archives

If the news of lean finely textured beef ("LFTB"), a/k/a "pink slime," being sold and used as food brought to mind images like this, then you are not alone. Well, Beef Products, Inc. is not having it. They stand behind their beef, and in 2012 they sued ABC, and the scientist who dubbed LFTB "pink slime," asking for $1.2 billion in damages resulting from plant closures and layoffs, reports The Hollywood Reporter.

Procedural History

The 27-count, 257-page complaint included the following claims: defamation for false statements, defamation for false implications, common law product disparagement for false statements, common law product disparagement for false implications, statutory product disparagement for false implications under South Dakota law, and tortious interference with business relationships.

GC Q1 Checklist: How Do You Stack Up on This Vital 'To Do' List?

Anno domini 2014. Some called it the year of "social media engagement." Others call it the Year of the Horse. And if you're general counsel for a university with an athletics department, it's going to be the year of pain.

For everyone else, it's just another year, with an endless list of tasks to complete. To make sure some of those tasks haven't slipped through the cracks, we thought we'd give you a few reminders. Think of this as a partial Q1 checklist, with the caveat that it's not industry specific. (A GC for a blossoming startup company has different "to dos" than a large bank's in house counselor, for example.)

Northwestern NLRB Decision is a Nightmare for University GCs

Are you the in house or general counsel of a university that awards scholarships to athletes? Prepare for the biggest shakeup you'll ever see, now that a National Labor Relations Board hearing office has labeled college athletes "employees," which brings the right to unionize and other legal headaches. Should the ruling be upheld by the full NLRB in Washington, D.C., this could impact everything from NCAA rules on amateurism to Title IX scholarships.

If it is upheld. Though that's a big "if," many, including ESPN's legal analyst, are already predicting that it will be tough to overturn.

In 1979, Mary Ann Hynes became GC at CCH Inc., the first woman general counsel of a Fortune 500 company, according to Corporate Counsel. Since then, women's ranks of general counsel at Fortune 500 compaines has grown. In 2014 the figure rose to 106, with women leading 21% of Fortune 500 company legal departments, says Corporate Counsel.

Invariably, findings like this bring up questions and comments. Some praise the growth, while others think the "growth" is moving too slowly. Here are some takeaways from the study about women leading law departments.

3 Reasons In-House Counsel Should Embrace Business Risks

Often, the role of in-house counsel is to say "no." Often known as the resident fun-sucker, in-house attorney is there to limit the company's exposure to risk.

But here's the thing: Risks are not only necessary for a company to thrive, they're crucial to survive. Doling out legal advice that is too risk averse can actually harm the longevity of the company. Here are three reasons why you should allow execs (and yourself) to take calculated risks:

Legal process outsourcing is a growing trend, according to Staff.com, as it "is emerging as a lower cost and fast growing alternative to the traditional model," (they even have an snazzy infographic to prove it). Has your company used legal process outsourcing? Interested? Here are some basics on determining whether legal process outsourcing is right for your company.

Why Use Legal Process Outsourcing?

The main reason to use legal process outsourcing is cost. According to Corporate Counsel's informal online survey it conducted last year on the legal process outsourcing industry, of the companies utilizing outsourcing, 68% chose to do so "to reduce costs." In fact, of the companies they interviewed, all had started outsourcing after the downturn. Other reasons to outsource legal process are to save time, manage risk, and create efficiencies, according to Infosys.

More BigLaw Insider Trading (Now With Edible Conspiracies!)

It's like the script of a bad movie.

One man, a Touro Law Center graduate (Google it -- it exists), worked as a career managing law clerk at BigLaw mergers and acquisitions powerhouse Simpson Thacher & Bartlett LLP. You can probably guess where this is going.

He'd allegedly pass along tips to a friend, who passed them to a broker, and eventually, someone noticed and the friend turned state's witness. The only surprising part of the story is the lengths that they went to to avoid getting caught.

Get The In-House Internship: Cover Letter Tips

Companies like to hire attorneys who've had previous in-house experience, so getting an in-house internship as a law student can boost hiring potential.

Although it's only March, companies already have or are starting to hire their summer interns -- and the competition is stiff. So to get employers to notice your internship application, here are some cover letter tips.

Delaware's reputation as a corporate tax haven is not news, nor is the amount of companies that incorporate in Delaware (more than half of Fortune 500 companies). What is news is this: the Delaware Supreme Court recently adopted a new standard of review for certain kinds of buyouts and mergers.

Do we have your attention now?

"Novel Question of Law"

In a case instigated by the merger of Ron Perelman's M&F with M & F Worldwide, the Delaware Supreme Court had to determine what the proper standard of review was for a "private merger conditioned upfront by the controlling stockholder on approval by both a properly empowered, independent committee and an informed, uncoerced majority-of-the-minority vote."

In the March issue of ACC Docket, the Association of Corporate Counsel released its findings of its "largest global survey of CLOs and GCs," the Chief Legal Officers 2014 Survey.

Methodology

In comparison to other surveys, this particular survey has an "international flavour" with attorneys from 41 countries responding. The ACC notes that they received 1,220 responses, which reflects a 17.65% increase over last year's response rate, and a 23% increase in non-U.S. responses. Aside from the U.S. and Canada, other countries with high response rates included Spain, France, Germany, Singapore, Argentina, Israel, Switzerland, Brazil Netherlands and the United Kingdom.

March Madness is in full swing, and if your company offices are like any of the others in this country, so is March Madness betting. As an in-house attorney we're sure you steer clear of any potentially illegal conduct.

But should you be advising your company against allowing employees to engage in a March Madness office pool? Here are three reasons why you should advocate for a no-bets policy ... and one reason why it may not be such a bad idea.

Caroline Krass Confirmed as New CIA General Counsel

The Senate confirmed Justice Department lawyer Caroline Krass as the new general counsel of the Central Intelligence Agency.

Krass's confirmation process had a few hiccups along the way, as senators held off on her nomination amid concerns that the CIA was not cooperating in an on-going investigation into Bush-era interrogation tactics, The Associated Press reports.

Krass is entering the legal fray at a time of extreme tension between the CIA and Congress.

Maybe it's because of all the Abercrombie & Fitch hijab cases last year, or maybe it was just the right time, but earlier this month the Equal Employment Opportunity Commission ("EEOC") issued two publications regarding religious garb and grooming in the workplace, reports Mondaq.

On March 6, 2014, the EEOC issued "Fact Sheet on Religious Garb and Grooming in the Workplace: Rights and Responsibilities" and a corresponding question-and-answer guide. While this is a must read for an in-house attorney working with a company that has employees (that's everyone), we thought we'd highlight some of the major takeaways for you.

Graffiti artist turned Contemporary artist Jean-Michel Basquiat has become a pop culture phenomenon since his death from a heroin overdose in 1988, at the age of 27. In his short life, he caused a stir in the art scene, dated Madonna before she was the Queen of Pop, and was best buddies with Andy Warhol.

The Adler Collection

On March 3, 2014 was supposed to host an online auction of Basquiat's works from Alexis Adler's collection. Adler, a former lover and roommate of Jean-Michel Basquiat acquired the work when he moved out and left the items behind. Having sensed the time was right, she decided to put the collection up for auction, through Christie's and stated: "I am releasing it to the world. ... It is no longer appropriate for me to be holding on to this," reports WCBS.

Albertsons and Safeway Merge Into Mega Grocery

Cerberus Capital Management agreed to buy Safeway for more than $9 billion and plans to merge it with Albertsons.

Safeway, the second largest grocer in the U.S., will merge with Albertsons, the fifth largest grocer, which Cerberus bought from SuperValu last year, Forbes reports. But this deal may not be in the (brown paper) bag quite just yet.

We previously wrote a three-part series on the qualities of "GCs of the Future," inspired by the Association of Corporate Counsel's study entitled, "Skills for the 21st Century General Counsel." In our research, we came across a white paper released by The Huron Legal Institute, providing tips for new general counsel. In reviewing the ten tips, we noticed that they all played well into the three leading characteristics for GCs of the future.

Since you're probably very busy learning the ropes of your new position, we thought we'd consolidate these tips for you, and frame them as they pertain to important GCs of the future qualities. As new general counsel, your future is now. 

Here are some ways to ensure a smooth transition.

In-House Counsel: Review Your Company's Security Check Process

Does your company compensate workers for time spent going through a security screening?

The U.S. Supreme Court recently granted a petition to review whether workers in a Nevada warehouse, which fills orders for Amazon, may be entitled to compensation under the Fair Labor Standards Act for time spent going through security screenings while off-the-clock.

The Court's ruling could set a de facto national standard on post-work security screening compensation.

Last week, the United States Patent and Trademark Office named Sarah Harris as General Counsel, even though the USPTO's top leadership position is still vacant, reports Reuters.

Like many patent attorneys, Sarah Harris obtained a degree in electrical engineering before receiving her J.D. She went on to establish her career as an intellectual property attorney at Hewlett Packard and Compaq, was of counsel at Hayes and Boone, and Chief Intellectual Property Counsel at Cooper Industries, according to the Practising Law Institute. In addition, Harris was formerly president of the Houston Intellectual Property Law Association.

Are You Being Rate-Jacked By Outside Counsel?

"Churn that bill, baby!"

Those words, possibly spoken in jest, made a lot of in-house counselors shiver. After all, controlling the bills for outside counsel is one of your main duties. But, the bigger the case, the harder it is to keep track of escalating costs.

Are you being charged market rate? Are the bumps in compensation for associates assigned to the case legitimate, or are you being gouged?

Coffee With DRM Protection? Keurig Competitor Screams Antitrust

Keurig, a subdivision of Green Mountain Coffee, makes single-cup pod-style coffee makers. Until 2011, they held 100 percent of the legitimate market, as they had a patent on the cups.

Until 2011.

And late last year, Green Mountain's attempt to use method patents to stop the burgeoning third-party pod market was shot down by the Federal Circuit, putting the company's $2.4 billion cash cow at risk. The Federal Circuit called the strategy an "end-run around exhaustion," dismissing the company's argument that their method patents applied to the brewers, end-users were violating those patents, and that competitors were inducing infringement.

Trade Secret Theft Accounts For Up To 3 Percent of GDP

A recent study by PricewaterhouseCoopers US and CREATe.org found that the theft of trade secrets amount to one to three percent of the United States GDP.

According to the study, malicious insiders are the number one source of exposing trade secrets. The loss from occupational fraud amounts to about $3.5 trillion worldwide. With the significant economic impact of trade secret theft, what can a company do to better protect its trade secrets?

We recently posted about the influx of new general counsel at about 10% of large organizations, and the expected corollary to that is former general counsel are leaving those positions. The thing is, some general counsel are not leaving of their own accord.

Here's an update of the recent law department shakeups (some voluntary, some not) making headlines.

In-House Counsel: Don't Let HR Send Nasty Rejection Letters

Kelly Blazek, the employment director of a popular local job bank listserv, experienced the public's wrath for the scathing rejection letter she sent to a Cleveland woman in response to her Jobvite request. The rejected applicant certainly got the last laugh when she posted the rejection email on various social media platforms and it went completely viral.

It's a good example of how nasty rejection letters can harm a company's reputation and goodwill in the community. Alas, employee email isn't as private as you'd like to believe.

Here are five ways in-house counsel can keep a rejection letter or email in the legal clear:

"To every thing there is a season," the saying goes, and as in-house counsel there's a season coming up that you'll want to be prepared for: H-1B visa season.

As in-house counsel for a company that may hire professionals outside the confines of the U.S. border, H-1B visa season is big business. The United States Citizenship and Immigration Services ("USCIS") issues H-1B visas to nonimmigrant workers engaged in a "specialty occupation" with a "bachelor's degree or higher degree or its equivalent." In addition to these requirements, applicants must have a U.S. employer, and will be working for an "appropriate wage."