In House - The FindLaw Corporate Counsel Blog

May 2014 Archives

Los Angeles Sues JPMorgan Over Discriminatory Mortgage Practices

Add JPMorgan & Chase Co. to the list of banks being sued by the City of Los Angeles, and add one more headache for the banking giant, which has been plagued with legal troubles, most of which emerged from the London Whale trading scandal.

This lawsuit, like a handful of others filed by Los Angeles, accuses big banks of discriminatory lending practices during the mortgage crisis and continuing through the present day. The lawsuits also blame the banks' reckless lending during the crisis for hundreds of millions in lost tax revenue and increased expenses of more than a billion dollars from maintaining foreclosed properties, reports the Chicago Tribune.

Drafting a Privacy Policy? Cal. Attorney General's Helpful Guide

Privacy policies. They're a thing of beauty, aren't they?

Most are jargon-filled nonsense that you'd need a law degree and intimate familiarity with the latest data privacy and tracking trends just to get the overall gist. Then again, nobody reads them anyway, nor do they read companies' Terms of Service or other shrinkwrap licenses. And almost nobody knows about data mining and the failed "Do Not Track" (DNT) standard.

The truth is, most online companies play some part in data mining for advertising purposes, either directly (Google) or indirectly (embedded third-party advertising networks). There's a saying: you either pay for the product, or you are the product.

Last week, I read yet another post about women, and yet another thing they aren't doing as well as the boys in the corporate setting: speaking up at high level meetings. Researchers have confirmed that women "feel less effective" or that "their voices are ignored or drowned out," reports the Harvard Business Review.

I'll admit it, I'm guilty of this. Yes, I'm still kicking myself for not speaking up at my freshman orientation seminar at U. Penn. So, if you want to avoid the regret of not speaking up, let's see what we can all do to change.

Earlier this year we wrote a post about Starbucks and its smart non-reaction to a parody coffee shop called Dumb Starbucks, gleaning lessons in when to let it go.

A few months later, and Disney is teaching us a similar lesson -- and this time really, figuratively and literally, "Let It Go."

The sayings about being early are numerous. From Benjamin Franklin's "Early to bed and early to rise makes a man healthy, wealthy and wise," to "the early bird gets the worm," we always hear that being early leads to success. But is it true?

It turns out, to a certain extent, it is. A new study, soon to be published in the Journal of Applied Psychology, shows that managers have a "morning bias," where they associate an early start time with conscientiousness, reports Quartz.

Here are some ways to combat morning bias, and get to work early.

Speaking of Data Breaches, How About That eBay Disaster?

It seems like just yesterday that we were discussing data breaches -- oh wait, that's right, we were. And while yesterday's post was more forward-looking (planning for the worst), eBay's data breach, like Target's, is a fine example of what a company should not do.

Keeping quiet about a major breach? Didn't they learn anything from Target? And even now, when they're notifying consumers and forcing password updates, the company still isn't getting it right, with a password strength algorithm that is encouraging users to pick weaker passwords.

Last week, we gave you an update on the status of intern litigation -- old and new. Today, we're going to look at what actions you can take to protect your company from the intern litigation trend.

Here are some things for the legal department to consider to avoid intern litigation.

In-House Attorneys' Game Plan for Data Breaches and Cybersecurity

It's one of the hottest topics for in-house counsel, thanks to the countless data debacles over the past few months and years: Target, Neiman Marcus, Barnes & Noble, etc. Companies have sensitive data, hackers break in, and companies respond with mouths agape, including their in-house counsel, who know a lot about law and little to nothing about encryption and best practices.

We're not going to reassure you by saying, "no big deal," because it is a very big deal -- even if you're a technophobe, you need to have a data breach game plan for when the inevitable happens. Scott Vernick, partner at Fox Rothschild LLP, noted that in 2013, 90 percent of companies reported that they'd been hacked, reports Inside Counsel. "There are only two types of companies, those that have been hacked and those that don't know they've been hacked," he stated.

GM Recall Probe Shifts Focus to Company's In House Legal Dept.

Executives have been axed. Thirty-five million dollar fines have been imposed. Lawsuits have been filed. And legal reinforcements have been called in to make arguments in bankruptcy court about New GM's liability for Old GM's defective ignition switches.

Legally, it's a nightmare (unless you are outside counsel). And the nightmare is about to get worse for GM's legal department as federal investigators turn their attention to the company's in- house attorneys, who quietly settled a series of cases, refused to turn over documents, and either refused to investigate or kept a lid on the defective ignition switches that have led to at least thirteen deaths, possibly hundreds of accidents, and millions of recalled vehicles.

If you have not been taking intern lawsuits seriously, you need to. By now you've probably heard about Fox's Black Swan and Heart's intern lawsuits; the appeals of class certifications (granted in the former, and denied in the latter) will be heard by the Second Circuit in tandem.

That's not all. Last month a class of MTV interns was certified and just this week, another intern class was certified, and another intern lawsuit settled -- for the largest amount of money in this type of case to date.

There's even a website devoted to unpaid interns litigation, asking provocatively, "Should you have been paid for your unpaid internship?"

Do we have your attention yet?

FCC Moves Forward With Not Neutral Net Neutrality Nonsense

Net neutrality: those words have swirled in and out of headlines for the past couple of years, but what do they really mean?

It's a principle, one that means that no legal Internet traffic is prioritized or demoted over other traffic. Internet Service Providers don't filter or promote websites or content by restricting data speeds or access. In times past, the argument was whether ISPs could restrict the amount of bandwidth used by data-hungry services, like Netflix or Bittorrent. Now, it's the reverse question: can they take bribes to give services priority bandwidth.

Today, the FCC announced that it was moving forward with its latest proposed rules, which don't explicitly authorize "fast lane" prioritization, but don't explicitly ban it either. The Internet, as expected, is responding with a wide variety of protests.

If you work in the legal department of a company that sells food or beverages, then you have surely noticed the growing litigation surrounding the word 'natural' lately.

And if you haven't, (or even if you have -- but especially if you haven't), then you need to read on.

Plaintiff Objects to Silicon Valley Anti-Poaching Settlement

One week, rumors are flying about a settlement in the billions range, and as we noted, it wasn't a far-fetched argument either.

For years, Apple, Intel, Google, and Adobe agreed not to poach each others' talent, an anticompetitive practice that almost certainly depressed salaries. The evidence was strong as well, with smoking gun emails sent by Steve Jobs and others now on public display.

Instead, a proposed settlement was reached for millions, which sounds like a lot, until you consider the less-than-$5,000 per head payout and the years of artificially depressed salaries. Our reaction to the proposed settlement was, "Is that all?"

We weren't alone.

3 Ways In House Counsel Can Facilitate Innovation

Creativity. Innovation. These aren't adjectives that are typically applied to lawyers, and for good reason: we're not Picassos, Hemmingways, or even code wizards like ten-years-ago Zuckerberg.

But in-house lawyers are involved in innovation: you can invent the next big thing, but if the IP isn't protected, it'll only be valuable until a bigger, stronger company steals the idea. You can build the next great product, until your team flees for a different company. You can challenge the status quo -- until a regulatory war grinds your progress to a halt.

Corporate counselors may not be the artists, but they make the artists' work possible, and profitable, in these three ways:

As you probably have heard, on Monday, Target fired then-CEO Gregg Steinhafel because of the massive data breach that compromised 70 million addresses and 40 million credit card accounts, resulting in a 2.5% decrease in fourth-quarter sales, reports The Boston Globe.

As general or in-house counsel, the last thing you should do is stick your head in the sand. You may think this has nothing to do with you -- but you are wrong -- this has everything to do with you. As in-house counsel's role evolves, business issues like this will more often fall in the realm of the legal department.

The Path to the Best In House Job Ever: NBA Commissioner

Until a couple of weeks ago, nine out of ten people would've stared at you blankly if you had said the name "Adam Silver." The tenth was most assuredly a Lakers fan, and was glad that David "basketball reasons" Stern was finally gone. Silver has long been the anonymous sidekick of the former commissioner, and outside of those few celebrating Angelinos, remained anonymous even after he took the NBA's seat of power on February 1, 2014.

And then, Donald Sterling happened. Silver, after announcing Sterling's lifetime ban and fine, trended on Twitter.

As a lifelong sports fan, who once dreamed (okay, still dreams) of being a general manager of a sports team (or a commissioner of a league), it got me wondering: how did Adam Silver go from law student to NBA superpower?

In House Lawyers Agree: We Are Afraid of Math

Maybe not just in-house lawyers, but really, how many lawyers of all stripes out there are afraid of math?

Fear of math can cause real pain as well as embarrassment, reports CBS. Now double that if you are counsel to a company that does engineering. Or pharmaceuticals. Or genetics. Or real estate. Or taxes.

Or anything.

If you declare that you "can't do math," the non-lawyers at your company might not openly mock you, but your statement will not inspire confidence in your abilities. Would you trust a professional who was otherwise great but couldn't read?

In 2009, during GM's reorganization, a new entity was created -- "New GM." Whereas Old GM would stay in bankruptcy and deal with the creditors, New GM bought old GMs profitable assets, essentially giving GM a fresh start.

Part of the reorganization required that pre-existing claims for personal injury and the like would be resolved in Old GM's bankruptcy proceeding. Judge Gerber noted, "the only alternative to an immediate sale is liquidation -- a disastrous result for GM's creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates."

But that was all before the ignition switch fiasco. Now what?

In this past month alone we've seen the initiation of two high-profile fashion cases -- one involving Rachel Roy in a dispute with her investor, Jones Apparel Group, and the other between fast fashion giants Aeropostale and H&M.

In the ever-evolving area of "fashion law" that encompasses everything from intellectual property to employment law (and many other practice areas in between), let's take a look at these cases and see what you can learn from them -- even if your company is not in the fashion industry.

Trouble Landing an In House Counsel Job? This Might Help

You dislike your current job and want to make the move to inside counsel. The pace sounds better with less pressure -- but still good money -- and you're ready to make the switch. Problem is, you've followed all the advice (network, use LinkedIn, do Internet job searches, etc.) but they haven't worked yet.

What's missing? We've got a few ideas.

In-House Counsel: 'Secret' Etiquette Tips

So you are in-house counsel. A lawyer among non-lawyers. Good manners are especially important for you because, given the grave respect -- even awe -- with which others view you, a slight discourtesy from you will be especially problematic.

Kidding.

Still, it never hurts to be polite. No one tries to be brusque or uncouth, but especially if we feel rushed or under pressure we can sometimes offend by violating rules we didn't even stop to consider. Here are some etiquette rules you might not even be aware of. Following them will only polish your already sophisticated image and smooth your way in the corporate environment.