In House - The FindLaw Corporate Counsel Blog

December 2014 Archives

3 New Year's Resolutions for In-House Counsel in 2015

It's that time of the year again: the time you'll make promises that you hope to follow through on, but likely won't. Still, it's an important ritual because it at least gives you the chance to set goals and evaluate your priorities -- even if you never get around to completing them.

What areas do in-house attorneys need to focus on? Data security is a painfully obvious place to start. Human resources policies could also use a "refine and shine" after another year of NLRB decisions shifting the landscape against employers. And finally, as is the case every year, you'll want to check up on outside counsel.

After Marriott Fine, Hotels Ask FCC to Allow Wi-Fi Jamming

Back in October the villainous Marriott's Nashville Gaylord Opryland Hotel and Convention Center was slammed by the FCC for jamming convention-goers' Wi-Fi signals, ostensibly to push them into paying the hotel for Wi-Fi access at between $250 and $1,000 per head.

That led to a $600,000 fine and a three-year consent decree, but the hotel did not admit malice -- they maintained that their purpose was to protect the public from rogue hotspots that steal data and transmit malware to unsuspecting users.

They're so committed to that purpose, in fact, that they, along with a group of other hotels, have asked the FCC to allow them to jam users' Wi-Fi networks in the future.

French Co. Alstom Pleads Guilty, Faces Largest FCPA Fine Ever

Several years ago, the Justice Department announced it was cracking down on violations of the Foreign Corrupt Practices Act, the federal statute that makes it a crime to bribe foreign government officials in order to get business.

Last week, the French engineering company Alstom interrupted its Merry Christmas to plead guilty to FCPA violations and pay $772 million in fines -- the largest ever for foreign bribery, according to The New York Times.

Another Unpaid Intern Suit Settles: Talent Agency Throws in Towel

We've seen studios and publishers go up against armies of unpaid interns, with mixed results.

So what happens when an agency that represents the talent that is the lifeblood of those industries runs into its own little unpaid intern issue? It does what many before it have done: settled.

That is the rumored status of the case between ICM Partners and the talent agency's former interns. According to The Hollywood Reporter, the two sides have reached a proposed settlement, avoiding a novel issue of arbitration agreements for unpaid interns.

Office Holiday Party Lessons From an Egg Nog Chugging Contest

As they like to say, lawyers are risk-averse. And no lawyers are perhaps more risk-averse than inside counsel. Every time someone in the company comes to you, your answer is probably going to be "no."

And that's why GCs should steer clear of the holiday party, where liability abounds. This is the story of one such holiday party that sent one worker to the hospital.

Microsoft Settles With Patent Holding Co. VirnetX for $23M

In September, we blogged about the ongoing legal battle between VirnetX, a patent holding company (or patent troll, depending on your point of view), and Apple. VirnetX claimed a patent on the process of establishing a secure tunnel between two computers on the Internet. Apple uses something like this technology in FaceTime, though the Federal Circuit Court of Appeals reversed a jury verdict in VirnetX's favor on some of the infringement claims.

As it turns out, VirnetX had sued everyone -- including Microsoft, which VirnetX claimed used its patented securing tunnel technology in Skype.

NLRB Names McDonald's, Franchisees as Joint Employers in 13 Complaints

In a batch of cases that could become indescribably dangerous precedent for any business that operates on a franchise model, the National Labor Relations Board has filed 78 charges across 13 complaints against McDonald's USA, LLP, as well as its franchisees, as joint employers of allegedly aggrieved fast-food workers.

Why could the outcome of these cases be so monumental? Because the NLRB is trying to hold the big McCorporation liable for the alleged actions of arguably independent franchisees.

Year in Review: The Top 10 In House Blog Posts of 2014

It's that time of the year -- the "Hey, look at all the cool stuff that happened in the past year" time of the year.

But let's be honest: Most good advice, and many titillating tales, stand the test of time. And most of 2014's posts were of the advice-column variety -- from becoming a general counsel to becoming a better general counsel.

Here are the 10 most popular In House blog posts of 2014:

NLRB Modifies Union Election Rules, With Dissent

Just in time for the new year, the National Labor Relations Board has announced changes to its representation case procedures. That's just a fancy, lawyer-talkin' way of referring to union elections conducted by the NLRB at the union's or employer's request.

The thrust of the new rules is to streamline the election process by making it easier, faster, and by reserving collateral issues for after the election. The point is just to get the election to happen without delay.

From Zillow's Orange County Office: Another Employee Lawsuit

Zillow might be better off burning down this office.

First opened in 2012 as an office for selling ads to real estate agents, Zillow's Irvine, California, office has become a hotbed for employee lawsuits. There was the sexual harassment lawsuit that we blogged about earlier this month. And this week, Geragos & Geragos, the law firm of famed attorney Mark Geragos, dropped another off another lawsuit at the clerk's office -- the sixth such lawsuit in three weeks.

Among the allegations: Sexual harassment. Unpaid overtime. Race, religion, and age discrimination. They say that where there is smoke, there is fire. Fire doesn't sound too bad right now, especially if these lawsuits end up costing more than the office brings in.

After 10 Years, Apple Wins iPod Antitrust Suit

After 10 years of litigation, it's finally over. (Except for the appeals. Oy.) Apple prevailed in a jury trial alleging anticompetitive practices in the operation of its original iPod, which didn't even last through this litigation (Apple quietly discontinued the "classic" iPod at its iPhone 6 event in September.)

So what's going on here? Did Apple win a Pyrrhic victory, a regular victory, or a nominal victory?

Kimble v. Marvel: SCOTUS to Re-examine Patent Royalty Agreements

On Friday, the U.S. Supreme Court agreed to re-examine an oft-criticized, decades-old intellectual property precedent, Brulotte v. Thys Co. In Brulotte, the Court held that patent royalty agreements could not extend past the life of the patent -- no contractual extension of a patent right beyond its expiration, in other words.

Who is challenging this ruling? It's not quite Spider-Man, but it is an inventor who seems to be a big fan of his. Steven Kimble invented a toy that mimics the comic book character's ability to shoot webs from his wrists. Marvel promised to provide royalties if they made the web shooter toy, and eventually they did -- after years of litigation. In 2001, Marvel purchased the patent -- No. 5,072,856 -- for a lump sum plus annual royalties in perpetuity.

The patent expired in 2010. The agreement, however, was supposed to last forever.

Employees Can Use Work Email for Union Activities: NLRB

Can employees be disciplined for using a work email account to discuss or conduct union activities? A 2007 decision of the National Labor Relations Board called Register Guard said that a facially neutral email policy prohibiting all "nonjob-related solicitations" didn't violate the National Labor Relations Act.

Last week, the NLRB reversed course, declaring in Purple Communications that "the Register Guard analysis was clearly incorrect."

NetJets Sued for Impersonating Union Member on Twitter

First, employers tried to spy on employees by making them hand over their social media account credentials. Then a bunch of states made that illegal, so that didn't work anymore.

Then, employers monitored Internet traffic. But that only meant employees chatted offline. So that didn't work anymore. What's the next big thing? Impersonating a union member!

iPod Antitrust Lawsuit Swaps Plaintiffs Mid-Trial

This is something you don't see every day. Last week, we told you about the impending Apple antitrust trial over claims that the company used anticompetitive tactics, including DRM-protected songs sold via iTunes, to keep iPod prices high in the mid-2000s.

The trial began as scheduled, but the parties and the court ran into a little problem: The class representative plaintiffs turned out to not be plaintiffs at all -- they were all ineligible. Instead of halting the $1 billion lawsuit (the $351 million figure previously quoted could be tripled under antitrust law), the judge allowed the plaintiffs' lawyers to substitute in a new plaintiff, one that read about the lawsuit on a tech blog.

USPTO Rejects Underwear Maker's 'Comfyballs' Trademark

This is a stupid decision. The Unites States Patent and Trade Office has rejected a Norwegian underwear manufacturer's requested trademark on "Comfyballs," their brand of underwear with "PackageFront technology." Apparently, cutesy references to male genitalia are "vulgar."

Balls? Balls, balls, balls. Is anyone offended yet? Balls.

Waiting in Line for Security Check Not Compensable: SCOTUS

Yesterday, the Supreme Court determined that employees at Amazon warehouses don't have to be paid for the 20 minutes or so they spend at the end of the day being screened to make sure they haven't stolen anything. The unanimous opinion, authored by Justice Thomas, with a concurring opinion by Justice Sotomayor, rested on an interpretation of the Portal-to-Portal Act of 1947.

TGI Fridays' Mistletoe Drone Cuts Photographer's Nose

Put this on the long list of ridiculously stupid promotions that some lawyer somewhere should have reviewed before it actually happened.

A TGI Fridays in Sheepshead Bay, New York, devised a brilliant plan to get into the holiday spirit: mistletoe drones! Little hovering aircraft stalk patrons and pressure them into kissing in public. Unsurprisingly, the brilliant stunt went horribly wrong when one of the drones got caught in a news photographer's hair, causing the rotor to swing around and clip her nose and chin.

Unsurprisingly, the bloody picture is making the rounds on the Internet.

Advice for Companies Litigating Questionable Class Action Suits

Many class action lawsuits revolve around legitimate concerns, like "Gee, my car's ignition switch stopped working in the middle of a freeway" or "Wow, this medication poisoned me." A small number of class action suits, however, really are much ado about nothing. Think Apple "antennagate." Or the recent hand-wringing over state bar exam software.

One law firm is going on the offensive by going on the defensive, refusing to settle silly claims, says Forbes. What could your company learn from this strategy?

Did Pro Sporting Events in Tampa 'Employ' Indentured Servants?

There's your headline: Major League Teams in Tampa Employed Indentured Servants in Concession Stands.

It sounds horrible, doesn't it? It's also only one-tenth of the story. An investigation by the Tampa Bay Times unearthed a labor scandal that did indeed involve unpaid concession stand workers for the Tampa Bay Rays, Lightning, Buccaneers, and the Daytona 500.

Except the labor was contracted through third-party companies and a non-profit called New Beginnings -- a ministry and rehabilitation institution that claims to help homeless drug addicts, but instead was allegedly pocketing their paychecks.

Zillow Is the Latest Tech Company Sued for Alleged Sexual Harassment

There was the Tinder lawsuit. Executives at GitHub and Square left their companies in the wake of sexual harassment scandals.

And today's edition? Zillow, whose Irvine, California, office is described by a former employee as having an "adult frat house" culture. The employee, Rachel Kremer, filed a lawsuit against the company, accusing multiple supervisors of pervasive sexual harassment. She also claims that when she stopped playing along and rebuked her male coworkers' advances, she was fired, reports Valleywag.

Is Your Company OK With Employees Shopping Online at Work?

"Employees abuse office computer privileges by shopping online during work hours," blares a headline from Inside Counsel. "Abuse"? That seems a little bit harsh. Employees also abuse their computer privileges by checking personal email during the work day and doing any number of other things that are technically violations, but are so minor that no one should care.

But they're going to do it anyway. A recent FindLaw survey shows that 35 percent of Americans shop online while at work. While disciplining employees for online shopping at work is one angle you could take, there are other, less Scrooge-esque ways of ensuring productivity.

Apple Faces Yet Another eDiscovery-Aided Antitrust Suit

Stop me if you've heard this one before: Apple is being sued for anticompetitive behavior, and the evidence includes an email from the late Steve Jobs.

Yep. It's the e-book antitrust lawsuit all over again, except this time, the claims are swirling around the company's legendary iPod and related iTunes service. When the products were launched, the two were inseparable: Only iTunes music files would play on iPods.

Lawyers say this is anticompetitive behavior. Apple said that the record companies forced it to use the security measures. According to 9 to 5 Mac, Steve Jobs allegedly said this in a 2003 email:

We need to make sure that when Music Match launches their download music store they cannot use iPod. Is this going to be an issue?

Calif., Ohio Legislators Want Mandatory Overtime Holiday Pay

As more and more businesses require -- as in, mandate -- that employees work on Thanksgiving in order to serve the throngs of customers who will show up at 6 a.m. on a holiday just to get a good deal on an X-Box, some businesses are bucking the trend. Costco, for example, won't be open on Thanksgiving, so you'll need to get your five-gallon buckets of liquid cheese somewhere else.

States, though, aren't pleased with this new trend, either. Last week, California Assemblywoman Lorena Gonzalez introduced a bill that would require employers to double the pay of employees who work on Thanksgiving and Christmas.