In House - The FindLaw Corporate Counsel Blog

September 2014 Archives

Is Your Company's Dress Code Discriminatory?

Let's talk dress codes. Obviously, your company can't have a dress code requiring women to wear super-revealing clothes; this isn't Sterling Cooper Draper Price. But dress code discrimination in 2014 takes a different form, by presuming what men and women will wear and dividing them up accordingly or failing to take into account transgender employees or employees of a different religion.

What are the limitations of an employee dress code?

Handling Negative Yelp Reviews: Bombard With Negativity?

By now, you've probably heard the "tin foil" theories about Yelp: The site, which has a filter for spam, allegedly filters out positive reviews until you become a paid customer, after which, they'll boost your positive reviews.

It's all allegations for now, and the Ninth Circuit recently ruled that even if it were all true, it wouldn't amount to extortion under California law. Your best bet, if you have negative Yelp reviews, is to respond with professionalism and niceties.

Or, you could just embrace the suck and tank your Yelp reviews, aiming for a one-star review.

FTC's 'Operation Full Disclosure' Targets TV, Print Ads

The FTC is here to drink milk and kick butt -- and it just finished its milk. Operation Full Disclosure is an FTC initiative designed to encourage truth in advertising. According to a press release, the FTC sent warning letters to 60 advertisers regarding factual claims and disclaimers in TV and print ads.

Weight loss ads were targeted for not noting that the results embodied in testimonials weren't typical. Ads claiming a "free trial" of a product didn't say that the consumer had to pay for shipping. And so on.

Does Your Company Prohibit Transgender Discrimination?

Most states have no employment protection for transgender discrimination; that is, an employee can be fired or not hired merely for being transgender. Last year, the U.S. Senate voted to extend the Employment Non-Discrimination Act's protections to gender identity or sexual orientation; the House hasn't acted yet.

Nevertheless, is transgender employment discrimination a thing? And can it subject your company to liability?

Activision Enlists Giuliani to Beat Noriega in Video Game Lawsuit

You've probably heard of "Call of Duty." It's one of the biggest video game series, in terms of sales, of all time. In "Call of Duty: Black Ops II," real-life dictator-turned-prisoner Manuel Noriega makes an appearance as ... a dictator.

Turns out Noriega (the real one, not the video-game character) is mad and is suing over the use of his likeness. Activision, the company behind the game, is trying to get the case tossed and has enlisted a very interesting choice of counsel to help: former New York City Mayor Rudy Giuliani.

NFL Now Has a Domestic Violence Policy; What About Your Company?

The NFL has announced that it will train league staff on recognizing and preventing domestic violence and sexual assault. The news comes after, well, a whole lot of players were allegedly involved in domestic violence: Ray Rice, Adrian Peterson, Greg Hardy, and Jonathan Dwyer all received suspensions while investigations are pending.

More importantly, the news comes after sponsors pulled their deals when the league failed to act initially.

No matter what the true motivation was, the program is a good move for the league, which in the past, has been criticized for ignoring the problem. Should other companies follow suit?

10% of Americans Have Gone to Work Stoned: What Can Companies Do?

A recent survey finds that 10 percent of U.S. workers have gone to work while high on marijuana.

In addition, 3 percent of respondents say they've gone to work under the influence of a drug other than marijuana, and 28 percent under the influence of a prescription drug, according to the Mashable/SurveyMonkey survey of 534 Americans.

While these self-reported figures aren't authoritative, they should give you pause. Does your company have a drug policy? What does it cover? And, importantly, does it comport with state laws?

Another Gender Pay Equality Bill Rejected by Senate GOP

Is this deja vu, or deja deja deja vu?

Back in April, Senate Republicans rejected the Paycheck Fairness Act of 2014. At the time, The Washington Post noted that it was the third attempt in recent years to pass the wage equality legislation. But hey, maybe the fourth time would be a charm?

No. Not at all. This time, according to The Hill, Wednesday's vote was 52-40, short of the 60-vote procedural hurdle needed to advance. The vote seems like more of a political move than an actual attempt to pass legislation -- it's not like a handful of senators swapped party affiliation since the 53-44 vote in the spring, after all. But more importantly, for businesses, this should cause more than a few GCs to utter a sigh of relief.

BP Admonished for Tweaking Line Spacing in Court Brief

Attorneys for BP, the multinational energy company, were called out this week for sneakily reducing the line spacing in a court filing. What can lawyers learn from this incident?

As if it weren't enough for BP to recklessly operate the Deepwater Horizon, sending millions of gallons of oil into the Gulf of Mexico, causing millions in economic damage to the Gulf Coast, killing some people, and incurring billions in fines, they had to go and pull a junior high trick.

Here's what happened:

PG&E's Friendly Emails to Regulators: 3 Lessons

Wait, so you're not allowed to send cute, overly familiar emails to the regulatory board that is going to decide how much your company gets dinged for blowing up a bunch of houses and killing some peeps a few years back, demanding that you get a more lenient administrative law judge?

Now you tell me. And now Pacific Gas & Electric knows, after a series of back-and-forth emails detailing a way too close relationship between the utility company and California's Public Utilities Commission (PUC) came to light. Three execs and a top aide at the state agency just served as the sacrificial lambs, while PG&E scurries to "put new procedures in place" before they get slammed by the suddenly less friendly PUC.

Let's see what we can learn from this mess, shall we?

30 Companies Sign Pro-Gay Marriage Amicus Brief: Good Idea?

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?

Ex-Xerox GC Sentenced to 15 Years for Ex-Wife's Brutal Beating

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.

Can You Fire a Director Who's Too Old to Effectively Govern?

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?

Internal Investigations and Attorney-Client Privilege: 3 Tips

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:

CDA Section 230: Mooring Your Company's Website in a Safe Harbor

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.

Ray Rice Suspended: A Bad Tweet and Grounds for Appeal?

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.

Can Being a 'Public Benefit Corporation' Pay Off for Your Company?

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.

Trial Date Set in Silicon Valley Anti-Poaching Labor Case

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?

Don't Let Your Company Get Hit With Wage Theft Claims

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?

9th Cir.'s Yelp Decision: Pay Up or Watch Your Ratings Sink

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.

More Legal Battles Brewing With Keurig's Coffee Pods?

Keurig 2.0. It's the new version of Keurig's ubiquitous pod-based single-serve coffee machines. What's the 2.0 about? The machines come with DRM protection and the ability to brew larger pots.

DRM, if you're unfamiliar, stands for Digital Rights Management. In plain English, Keurig 2.0 machines will only take Keurig-authorized cups which have a special ink marker on their foil tops, reports The Verge. Except, that DRM may have already been broken by rival companies before the 2.0 machines even hit the market.

Unless the announced product was created pursuant to a licensing agreement, we could be looking at yet another round of Keurig in the courtroom.