In House - The FindLaw Corporate Counsel Blog

June 2015 Archives

Get ready for expanded overtime. In the upcoming month, the Department of Labor is expected to release new Fair Labor Standards Act rules which are expected to greatly expand the number of employees eligible for overtime. The FLSA requires that employees who work more than 40 hours a week be paid time and a half for any overtime.

For decades, that overtime requirement has been applicable only for lower-paid employees. Under the new rules, the salary cap will go up, allowing millions of salaried workers to qualify for overtime for the first time. GCs should be ready for the change.

The St. Louis Cardinals were reportedly caught stealing more than bases from the Houston Astros last week. An employee for the Red Birds allegedly breached the Astros' private database of player information, notes and trade discussions, leading the FBI to announce an investigation into the foul play.

There's plenty of lessons to learn from the Astros' breach, which was less cloak and dagger corporate espionage, and more simple failure to implement basic data protection steps. Here's what in-house counsel needs to know to help prevent their company from falling victim to nefarious MLB franchises -- or anyone else.

Perhaps you have an offer to be a company's first in-house attorney or perhaps you're trying to convince a company that they need to take you on, alone. Can you be a legal department of one? Is there such thing as a solo in-house attorney?

Of course you can and of course there is! In fact, it's fairly common for there to be only one in-house lawyer at many companies.

In-house counsel know how difficult claims of retaliation against whistleblowers can be. Those issues can become even worse when it's a fired in-house lawyer making the retaliation claim.

That's what happened to Sanford Wadler, fired GC for Bio-Rad Laboratories. Wadler claims he was terminated after attempting to report corrupt practices to the company's board. The case raises important questions about how much the attorney can disclose about his former employer and client in order to prove his case.

The Securities and Exchange Commission has charged 36 firms with securities violations connected to the issuance of municipal bonds. Those banks, underwriters of the bonds, will pay between $40,000 to $500,000 for making materially false statements or omissions about the issuer's compliance with disclosure rules.

The enforcement action is the first the SEC has taken under its Municipalities Continuing Disclosure Cooperation Initiative. The MCDC is a voluntary program that allows participating banks to self-report violations in exchange for standardized settlement terms.

The federal government doesn't usually get much praise from privacy advocates. Whether it's the NSA's mass data collection program, or Homeland Security's collection of facial recognition data, there's plenty of skepticism when it comes to the federal government and privacy.

But, if there's one agency that has gained the respect of privacy advocates, it may be the Federal Trade Commission. Over the past decade the FTC has evolved into America's primary "privacy cop," pursuing actions against companies that have fallen short of their privacy promises, violated consumers' privacy rights, or failed to keep sensitive data secure.

We've said it before and we'll say it again: cybersecurity should be on the top of any GC's agenda. Not only is cybersecurity one of the main areas C-suite executives want their legal department to master, the costs of losing sensitive data can be massive, resulting in expensive litigation, loss of proprietary information, and reputation damage.

But how do you protect the data that's in the hand of suppliers, contractors, and the like? Don't worry, the federal government has been figuring that out for you.

Asian American lawyers who gathered in Chicago last year to discuss roadblocks to a career advancement expanded their roundtable program to the West Coast last month. A roundtable event in California's Silicon Valley, focused on Asian American GCs, sought to provide networking opportunities and dialogue about the careers of Asian American in-house attorneys.

The meeting, hosted by the legal consultancy Major, Lindsey and Africa and the firm Shearman and Sterling, brought together both firm and in-house lawyers to discuss career advancement and obstacles.

Tips and complaints to the SEC's whistleblower program continue to grow at record pace, even if the Commission has been slow to pay out whistleblower awards. With more tips, come more claims of retaliation. More than one out of every five whistleblower reports some form of retaliation.

Those retaliation claims, the salt in the wound of an SEC investigation, can have stiff penalties, given the new protections afforded whistleblowers by the Dodd-Frank Act. But retaliation complaints are avoidable if a company has the proper procedures and policies in place. Here are five tips to help you stave off claims of retaliation:

Dick Costolo, the embattled CEO of Twitter, announced his exit from the company yesterday. Costolo had manned the company for the past five years, but faced increasing criticism as Twitter failed to increase its user base. Twitter co-founder and ex-CEO Jack Dorsey will replace him on an interim basis.

Costolo had long been criticized for failing to realize the full potential of the 140-words-or-less messaging platform, but his departure is still a surprise. Costolo's voluntary exit has lead to speculation as to how Twitter will evolve in his absence, or whether it will simply be sold to another tech company.

Even as the legal market begins to improve, law firms are losing out to in-house legal departments, a recent survey has found. The legal consulting company Altman Weil surveyed chairs and partners at more than 300 U.S. firms with over 50 lawyers.

Their report found that almost all firms acknowledge that competition from non-traditional sources is here to stay. But the biggest competition is coming from clients themselves, as businesses in-source legal work.

Maybe you're an associate with a few years under your belt, dreaming of landing a cushy in-house job instead of pursuing the partner track. Maybe you're already in-house, rolling your eyes at the outsiders who think you have it easy. Either way, you know that in-house work is valued and in demand.

Here's some of the main reasons people decide to pursue in-house careers, as well as a few warnings about why some lawyers might want to think twice.

A few weeks ago, a survey of international General Counsels showed that almost half of in-house legal teams used a competitive bidding process when hiring outside counsel. That's a big jump from previous years, up 14 percent, but still surprisingly low.

If you're one of the half of GCs who haven't yet embraced competitive bidding, you should. Here's why:

In the few weeks since Swiss police arrested seven FIFA executives on fraud, money laundering and racketeering charges, the once-untouchable organization has seen its standing decline drastically. FIFA, the governing body of international soccer, faces allegations that there was "rampant, systemic, and deep-rooted" corruption throughout the organization. As the public watches, high-ranking members are turning on each other to place blame.

Even for in-house counsel who can't tell soccer from synchronized swimming, the FIFA scandal is something worth watching. As always, there are important lessons to learn from the organization's ignominy. Here's 3 FIFA scandal take-aways for corporate counsel -- and you don't even have to bribe us to get them!

It's been a bad breakup between American Apparel and its founder and ex-CEO, Dov Charney. Once Charney's bad-boy image had helped sell a brand that used "porny ads" to sell plain tees and spandex pants and rapidly expand across the U.S. After years of scandal, sexual harassment suits, and declining sales, Dov was finally kicked to the curb last December. But just like the creepy ex who won't leave you alone, Dov is refusing to take the break up in stride.

That has lead the company to take out a restraining order against Charney. What can GC's learn from this messy corporate implosion?

On-call scheduling has become increasingly common among large employers, especially in the retail industry. Under an on-call scheduling system, employees set aside work hours and check in before their schedule to make sure they're needed. It allows employers greater flexibility in scheduling, but can leave workers with unpredictable schedules and incomes.

GC's who've given the practice a green light might want to start rethinking things. On-call scheduling could soon become more of a liability than a benefit. An investigation in New York and a class action in California both threaten to hit companies that use on-call scheduling with millions of dollars in backpay and other fines.

Protections against religious discrimination got a little stronger yesterday, after a Supreme Court against Abercrombie and Fitch, the retailer famous for its risque ads and expensive jeans. The Court ruled that an Abercrombie store had violated the Civil Rights Act when it refused to hire a Muslim woman because she wore a head scarf. That's not exactly shocking.

What's new is that the woman, Samantha Elauf, had not said that her headscarf was religious garb and had not asked for religious accommodation. That doesn't matter, according to the 8-1 Supreme Court decision. A discriminatory motive, whether based on actual knowledge, suspicion or "merely a hunch" is enough to violate Title VII of the Civil Rights Act, according to the Justices. The ruling has major implications for all employers, not just the ones hiring shirtless retail staff.

The Association for Corporate Counsel, a bar association for in-house attorneys, has honored its "Top 10 30-Somethings" at its May CLE training. These young in-house lawyers are good examples of the changing roles facing in-house counsel, as companies begin looking to their legal departments for more than just legal advice.

The awards honored young lawyers, between 30 and 39 years old, who are "proactively approaching challenges and striving for innovation," the ACC's president said. So, who won and what did they to earn the honor?