In House - The FindLaw Corporate Counsel Blog

July 2014 Archives

The NLRB, McDonald's, and Changes to Joint Employer Liability

Until a few days ago, parent companies of franchises could disclaim responsibility for labor violations of their franchisees. But The New York Times reports the National Labor Relations Board has thrown a wrench into that comfort, finding McDonald's -- one of the largest franchise operators in the world -- jointly liable for its franchisees' violations.

The NLRB's General Counsel is allowing complaints to proceed against McDonald's as well as certain franchises that allegedly penalized workers for engaging in pro-labor activities. Some of these activities included strikes that included other fast-food franchises like Wendy's and Burger King.

While the statement consists only of a press release, it follows hot on the heels of the NLRB's decision to expand the definition of "joint employer," likely paving the way for more franchiser/franchisee cases like this one.

OkCupid Experimented On Its Users. Why Does Nobody Care?

Facebook experimented on its users by peppering their home pages with depressing status messages. Users were mad. The FTC is investigating. This is old news.

Or at least it was. On Monday, OkCupid, a freemium online dating site, announced proudly on its blog that it runs experiments on users too. Some of these seem like no big deal (removing all pictures from the site for a few hours), while others seem like a very big deal (lying to users about compatibility ratings to test the effectiveness of their matching algorithm).

And yet, nobody is mad at OkCupid. Why? And where should the line be drawn for research on your company's customers?

Apple Hourly Workers' Core Complaint: Denied Breaks in Calif.

Fresh on the heels of settling a labor class action (assuming the objectors don't nuke the deal) regarding a Silicon Valley anti-poaching pact, Apple finds itself again on the defensive, and again, it's a labor class action.

This time, a mega-class of current and former Apple workers in California allege that the company's break policies violated California law, both by giving lunch breaks after the five-hour mark and by denying workers a second rest break for longer shifts.

Late last week, a San Diego judge certified the class, which covers nearly 21,000 current and former hourly retail and corporate Apple employees over a four-year period from December 2007 to August 2012, reports the San Jose Mercury-News. California law provides that employees must be paid the equivalent of one hour's wage for each missed break -- a huge tab considering the size of the company.

NLRB Judge: Mercedes-Benz's Union Restrictions Violated Labor Laws

In September 2013, an employee at the Mercedes-Benz plant in Vance, Alabama, made a claim alleging unfair labor practices. The employee asserted that the plant's management was preventing employees from talking about their labor union or soliciting for the union during work hours.

As you probably know, the Fair Labor Standards Act (FLSA) expressly allows employees to engage in union activities and prevents employers from interfering with that right. In response to the complaint against Mercedes-Benz, an administrative law judge with the National Labor Relations Board found three violations of the FLSA.

Here's what in-house counsel need to know from this decision:

Want to Be a General Counsel? Try Texas!

Welcome to the world of in-house counsel, the attorney who lives inside a company as one of its employees, advising and representing it. Did you go to the right law school for this? If you went to Harvard Law School, then you're well on your way.

Harvard, though, isn't your only option. Other top law schools send their graduates in-house, as well. For example, have you considered The Lone Star State? University of Texas, Austin ranks #5 in terms of sending its graduates in-house. UT School of Law ranks #15 on U.S. News and World Report's list of the best law schools -- nothing to sniff at -- but is among the biggest providers of in-house counsel. What gives?

Last week we had one of the worst days of news in recent history. The ongoing Israeli conflict in Gaza, and the downed Malaysian Airlines flight 17 put front and center what we often try to forget: there are world conflicts that persist and life in other countries is not as safe as it can be here.

While we're insulated in our corporate cubes and offices, you may think that outside of news, these global crises don't have an impact on us. But you're wrong. Every world crisis can be a potential corporate crisis if you don't take the following steps.

Earlier this week, Corporate Counsel released the results of its 2014 GC Compensation Survey, which lists the top 100 (with caveats) best-paid general counsel. And while we all know that GCs make a lot of money, when you actually see the figures, I assure you, your jaw will drop.

So here goes, let's all turn green with envy picture what we would do with $5 million as we take a look at the survey results.

The sight of toddlers and children with tablets and smart phones is pretty common these days -- even I'm guilty -- sometimes technology is the only thing that will curb a meltdown (if only that were true of adults). And, any parent probably has their own story about how their child managed to purchase apps (or movies on demand, in my case). How the kids manage to figure this out is a mystery.

Well, parents will have one less thing to worry about because the FTC is taking up one of their causes: unauthorized in-app charges, reports Inside Counsel.

Apple Settles E-Book Dispute Pending Appeal on the Merits

More than a year later, Apple has finally taken a judge's advice and settled its long-running e-books price-fixing antitrust case -- pending further appeals. On the eve of the damages trial, Apple settled with the government for $450 million, $400 million of which goes to consumers. However, the settlement is conditioned on Apple not losing its appeals, appeals which could reduce the settlement to $70 million or, if Apple gets truly lucky, nothing at all.

That last part seems unlikely, however. If you recall, the government had a ton of evidence, including emails from the late Steve Jobs. The evidence was so compelling that the trial judge warned Apple, on the eve of the merits trial, that it would be best to settle.

Earlier this month, the Supreme Court granted cert in a pregnancy discrimination case to determine whether the Pregnancy Discrimination Act ("PDA") requires employers who make accommodations for people with short-term disabilities to make the same accommodations for pregnant workers.

A mere two weeks later, the Equal Employment Opportunity Commission issued new guidelines related to pregnancy discrimination, reports The Washington Post. Let's take a closer look at the coincidental timing, the new guidelines, and what this means for your company.

Samsung and the Tech Industry's Child Labor Problem

Stop me if you've heard this one: tech company's Chinese supplier is caught violating labor laws.

Okay, don't actually stop me. Keep reading. That's better.

This time, it's Samsung. Shortly after announcing an "all clear" in its recent internal labor audit, at least in regards to child labor (there were plenty of other violations, of course), the company is doing a double-take after a watchdog allegedly found multiple instances of Chinese children working for a supplier using fake IDs.

DOJ Settles Subprime Mortgage Dispute With Citigroup for $7 Billion

It's not about the size of the company -- it's about the culpability and level of misconduct during the subprime mortgage bubble that preceded the 2008 financial crisis. That's the message the Department of Justice is sending after today's settlement with Citigroup.

While the company opened negotiations with a $363 million offer, and the DOJ demanded $12 billion, the approximately $7 billion deal struck is this: a $4 billion civil penalty paid to the Justice Department, $500 million paid to the Federal Deposit Insurance Corp. and several states. The bank will also allocate $2.5 billion for "consumer relief," such as modifying mortgages for struggling homeowners and financing affordable multi-family rental housing.

A federal district judge has preliminarily approved a settlement in a class action, in which plaintiffs allege that J.Crew violated Massachusetts law by collecting zip codes at check out. While that case is wrapping up, another, involving UPS is heating up as the Supreme Court granted cert to hear the case in the 2014 term.

Let's take a look at the issues in the case, which incidentally, affect most companies operating today.

With Patent Reform Bogged Down, New Bill Targets Demand Letters

We got fee-shifting, thanks to the Supreme Court. And the Innovation Act passed the House ... before it hit a dead end in the Senate.

Well, here's another one to keep patent reform advocates satiated in the meantime: curbing abusive demand letters. The Targeting Rogue and Opaque Letters Act (TROL Act) would target patent troll letters that, in most instances, are frivolous demands for settlements with no legal merits.

Ideas for curbing frivolous demand letters were considered and left out of the Innovation Act, as that bill's sponsor, Bob Goodlatte (R-Va.), noted that it would be difficult to balance speech interests, and legitimate defense of intellectual property, with a law that restricts demand letters.

Law school, despite being an academic institution, is a bit controversial these days. You have those who complain about not being able to do anything with their law degree, those who disagree, those who want to shorten law school to two years, and those who want to "kill" law school.

Amidst the controversy, we see a new trend emerging -- coursework geared toward working as in-house counsel. Let's take a look at the offerings, and how you, as in-house counsel, can get involved.

What Companies Need to Know About Religious Obamacare Exemptions

Congratulations: Your closely held corporation is a person. And when it comes to religious beliefs, that fictional person, it seems, takes after its figurative parents -- its closely held owners.

What does the Supreme Court's landmark Hobby Lobby ruling mean for your company, your religious beliefs, and your requirement to provide either contraceptive coverage or insurance coverage for other services that run contrary to your beliefs?

Depending on the level of accommodation you're requesting, you may only need to fill out a form or send a letter, though for objections to anything other than contraception, you may be forced to litigate.

FTC Preparing to Take on T-Mobile Over Hidden Bogus Fees

The nation's fastest growing cell phone carrier is about to meet the Federal Trade Commission in a courtroom, and the fallout could be more than a few fines -- the PR hit from allegedly cramming bogus fees on customers' bills could cost the company dearly.

The FTC announced earlier this week that it filed a complaint [PDF] against T-Mobile, accusing it of knowingly passing along unauthorized fraudulent third-party charges to consumers, while taking a thirty-five to forty percent cut. The charges would be hidden in bills that were dozens of pages long, and the refund rate was only 40 percent, according to the agency.

As in-house attorneys are increasingly expected to take on more strategic roles, in addition to counseling business executives, there may come a time when you must advise (or remind) the Board of Directors the qualities they need to look for in prospective directors.

What follows is a quick list of some of the attributes that a good addition to the Board of Directors would have.