In House - The FindLaw Corporate Counsel Blog

November 2014 Archives

Would Your Company Benefit From Immigration Reform?

Some have criticized President Barack Obama's immigration plan as unconstitutional. Others argue that it doesn't go far enough.

But for most people, the bottom line is the bottom line. Instead of pondering politics, they are wondering if the immigration overhaul, and other efforts that have been tossed around Congress, will help or hurt their company. On the one hand, you'd think that a higher supply of labor could only be good for businesses. But for some industries, the ideal immigration solution lies somewhere between open doors and bigger fences at the borders.

Take a look at the tech industry, for example.

Microsoft Sues IRS for Info on Outside Auditor, Quinn Emanuel

Microsoft, like many companies, allegedly uses a complex web of overseas subsidiaries to shield itself from U.S. taxes. This is accomplished through "transfer pricing," which allows subsidiaries of the same company to buy and sell with each other in a way that maximizes profit for the parent company.

The IRS is none too pleased with all this and has begun to audit companies' transfer prices. Well, Microsoft is none too pleased with that, and filed a complaint in federal court yesterday to get the IRS to disclose transfer pricing documents.

Reign in Those Investors, Uber: Leave PR to the PR People

America is still murmuring about Emil Michael, the Uber executive who developed a case of foot-in-mouth disease at a dinner party last week. BuzzFeed reported that Michael wanted to create a team within Uber to dig up dirt on journalists critical of the ridesharing service and publicly embarrass them.

That went about as well as you'd expect, with angry customers claiming they'd deleted the app and Senator Al Franken asking more questions about what Uber does with all of that private data.

So what's a company to do?

Apple Suffers $23M Loss in 2-Way Pager Patent Suit

Apple was hit with a $23.6 million loss in federal court on Tuesday, with a ruling that the tech company infringed on five patents owned by Mobile Telecommunications Technologies (MTel).

According to Inside Counsel, the Texas federal court found that Apple infringed on five of MTel's two-way pager network patents from the '90s by using MTel's tech in its iPhones and "other devices." So iPads and iPods? In any case, Apple has to pay up for six years of patent infringement.

How did Apple lose this patent case when it has won so many others?

Is Your Company on Instagram? 3 Things GCs Should Watch For

The potential legal pitfalls of a company's social media presence are matched only by the seemingly endless variety of social media platforms about which to worry.

Facebook and Twitter should certainly be in your wheelhouse by now, but you may or may not be familiar with Instagram, a mobile-based video and photo sharing platform. Even if you're not entirely up to speed on social networking, you may remember Instagram as the company Facebook purchased in 2012 for a cool $1 billion.

Despite being owned by Facebook, Instagram is still operated as a stand-alone social network. As such, it has its own set of potential issues for general counsel to be aware of. Like what? Here are three things to watch out for on your company's Instagram profile:

Del. Court OKs Suit Against Zynga Directors for Alleged Self-Dealing

When you're the CEO of a new company, when is the time to sell your shares and make some actual cash? The answer is probably "not very soon" -- at least not so soon that it looks like there's some impropriety.

Case in point: Mark Pincus, CEO of Zynga, the company that makes those Facebook games where you grow pumpkins or mine diamonds, or something. Thanks to some questionable conduct, some of Zynga's directors are in Delaware Chancery Court.

5th Cir.: Naming Whistleblower Is an Adverse Action

In 2005, Halliburton hired Anthony Menendez to be the Director of Technical Accounting Research and Training in the Finance and Accounting department. Menendez trained field accountants and monitored accounting issues. A few months after he was hired, he reported to his boss, the Chief Accounting Officer (CAO), that some of Halliburton's accounting practices deviated from Generally Accepted Accounting Principles (GAAP).

Deepwater Horizon Judge Won't Amend Order; BP Still Grossly Negligent

You'll recall that back in September, Judge Carl Barbier laid out a comprehensive, 153-page order filled with 111 pages of facts that concluded BP was grossly negligent in the operation of the Deepwater Horizon offshore drilling rig, leading to the largest marine oil spill in history.

BP petitioned Barbier to reconsider his finding of gross negligence (after being caught manipulating the line spacing to get more words into a brief). In a November 13 order, Barbier declined to amend his giant order.

And Another One: Conde Nast Settles Intern Pay Lawsuit

This meant the end of Conde Nast's internship programs. As part of a massive wave of unpaid/underpaid intern lawsuits, you have to wonder if this will mean more large corporations will wise up and stop offering illegal internships.

Conde Nast just squashed the beef in a class action brought by former interns, agreeing to fork over $5.8 million to put the suit behind them. The class includes roughly 7,500 ex-interns who worked at Vogue, Vanity Fair, and other similar publications, reports Capital New York.

The settlement is a bit of a surprise: We didn't see a whole lot of legal maneuvering before the rumors of a settlement swirled earlier this year, and similarly exploited (ahem, allegedly exploited) interns from Hearst Magazines had their class decertified. Conde Nast must have decided that $5.8 million was a small price to pay to avoid the litigation and public relations nightmare.

When Is a 'Highly Compensated' Employee Entitled to Overtime?

The Fair Labor Standards Act exempts "highly compensated employees" from overtime requirements. So what qualifies as "highly compensated"? And what's the difference between a salary and a stipend? Technical questions, to be sure, but ones that have a huge impact on determining whether an employee is entitled to overtime.

The First Circuit answered these questions earlier this month in Litz v. The Saint Consulting Group.

In Murphy Oil, NLRB Reaffirms Its Stance on Class Action Waivers

As we know by now (and are probably sick of hearing), class action waivers are totally fine if they're couched a part of an arbitration clause. But what about when an employment agreement contains an arbitration clause that purports to preclude employees' abilities to file joint or class complaints against the employer?

No bueno, said the National Labor Relations Board in an October decision called Murphy Oil. The decision is significant not only because it departs from the Supreme Court's increasingly permissive stance on arbitration agreements, but because it upholds a doctrine that at least three federal circuit courts of appeals view as either unpersuasive or reject outright.

'Darkhotel' Hack Targets Corporate Travelers: Avoid Public Wi-Fi

Here's a lesson that isn't quite a lesson -- more of a reminder: Avoid public Wi-Fi.

It doesn't matter if it's hotel Wi-Fi, Starbucks Wi-Fi, or your neighbor's unsecured network -- stay away when dealing with secure information. And seriously, if you get a surprise "Update This Now!" pop-up while on a public Wi-Fi network, don't click on the darn thing.

It sounds like common sense, but not everyone has that much sense in common, if you get the Jay-Z reference. The latest from Kaspersky Labs says that a "'Darkhotel' espionage campaign" has been fooling corporate travelers and targeting their data since at least 2009.

Lesson From the STD Website Case: Don't Hide Your TOS

When a John Doe plaintiff signed up for the dating website PositiveSingles.com, he thought his information was being kept private. And why not? The website, if you can deduce from the URL, is a dating site for people who are HIV-positive, as well as those who are interested in dating HIV-positive people (who are not, themselves, always HIV positive).

The website is part of a larger network of websites, all owned by the same company -- SuccessfulMatch Network -- that caters to different types of people, like Christians or HIV-positive African Americans. And that was part of the problem.

Lawyer-Witness to JPMorgan Mortgage Fraud Claims Federal Cover-Up

One of the most infuriating things about the 2008 subprime mortgage crisis and subsequent collapse of the economy was the absolute lack of accountability. Banks and big businesses were bailed out, nearly nobody was charged with crimes, and the executives who caused the whole mess continued on with massive salaries -- especially Jamie Dimon, who received a 74 percent raise after JPMorgan Chase agreed to a $13 billion (on paper) settlement with the government.

Now, with the settlement booked, and the statutes of limitations nearing their end dates, Alayne Fleischmann, the lawyer who was the key witness used to leverage the settlement, has come forward in a Rolling Stone feature, hoping that it will pressure the Justice Department to prosecute those responsible -- those who allegedly intentionally packaged and mislabeled junk subprime mortgages before selling them to investors.

Hyundai, Kia Hit With Record-Setting $300M Fine From EPA

The largest Clean Air Act fine in history will send $300 million from Hyundai and Kia up in smoke.

Pause for laughter.

Hyundai and Kia gave the EPA incorrect certifications for the greenhouse gas emissions of 1.2 million cars in 2012 and 2013. How much is that in greenhouse gas? About 4.75 million metric tons more than what the auto makers told the EPA the cars emitted, according to an EPA press release.

NLRB OKs Termination of 2 Employees Venting on Social Media

Ian Callaghan and Kenya Moore worked at a teen center at a San Francisco high school. During the school year, supervisors asked employees to list pros and cons about working there. Things reportedly got tense, however, when more cons than pros were listed. During the summer, Callaghan and Moore continued to work for the teen center in different capacities. When the school year arrived, both were rehired, but Moore was demoted, allegedly because of poor performance over the summer.

The two aired their grievances on Facebook (with a former student joining in), making references to losing kids, teaching kids graffiti, and throwing parties. Their conversation was shared with their employer by a coworker. They were subsequently terminated.

Venting or plotting? From an outside perspective, it can sometimes be hard to tell. And though the NLRB has been especially protective of employees' concerted speech on social media about working conditions, this represents an extreme case on the other end of the spectrum: the (possibly) plotting employees who, according to a recent NLRB ruling, can be fired for their online speech.

The AP's General Counsel 'Outraged' Over FBI's Fake News Story

In-house attorneys have a lot of worrying to do, and they write a lot of letters. But last week, Karen Kasier, general counsel for The Associated Press, found herself writing a letter asking the Justice Department why it impersonated the AP and disseminated a fake news story.

The story actually begins seven years ago when the FBI was trying to figure out who owned a MySpace account (yes, this was practically the Stone Age) that was sending bomb threats to a high school in Washington state. Using a bit of trickery, the FBI created a fake news article, written by "the Associated Press," and sent a link to the article to the MySpace account. The website contained a bit of malware that would allow the FBI to trace the computer.

EEOC Sues Another Company Over 'Voluntary' Wellness Program

There's a thin line between incentivizing and penalizing, and though the Equal Employment Opportunity Commission has yet to say it, it seems to be targeting companies that are employing the latter as a motivating tactic to get employees to participate in wellness programs.

Today's defendant? Honeywell International Inc., the largest company sued so far by the EEOC over wellness programs, and the third such company since August, Reuters reports. According to the EEOC's complaint, Honeywell employees faced up to $4,000 in surcharges and lost contributions to healthcare coverage if they did not participate in biometric testing as part of the company's wellness program.

With wellness programs becoming ubiquitous among major employers -- as many as 95 percent offer wellness programs -- your company's wellness program will need to manage the minefield of the Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA), the Health Information Portability and Accountability Act (HIPPA), the Age Discrimination in Employment Act (ADEA), and Title VII.