In House - The FindLaw Corporate Counsel Blog

September 2015 Archives

When corporations break the law, individuals will be held accountable. That's the gist of a DOJ memo released this month affirming the Department's commitment to pursuing individuals for corporate wrongdoing. (It's almost like they saw the VW emissions fraud coming, or finally learned from years of criticism over their handling of Wall Street rule breaking.)

The so-called Yates memo, named after its author, Deputy Attorney General Sally Quillian Yates, marks a notable change from past practice. It sets out "six key steps" to strengthen the Department's focus on individuals when investigating corporate wrongs. Here are the highlights:

For years, Volkswagen sold millions of cars designed to evade environmental controls. The company installed "defeat device" software which cheated emissions tests and disabled pollution controls when its diesel cars were on the road, allowing them to release 40 times the legal pollution limits. And they would have gotten away with it, too, if it weren't for those meddling environmentalists!

It's safe to say that Volkswagen's emissions fraud has been a complete disaster -- and not just for the environment. VW's weak position in the United States is bound to become even weaker and the company's stock lost almost a quarter of its value. Now VW must recall millions of vehicles, face up to billions in fines, and possibly face criminal prosecution. Here's what you can learn from Volkswagen's debacle.

When it comes to international business, the arm of anti-bribery and corruption laws is long, reaching transactions across the world. And the arms of the law are growing more numerous. It's no longer just America's Foreign Corrupt Practices Act that companies have to worry about. Canada and Brazil both have strong anti-bribery laws, while the U.K.'s Bribery Act is stricter than that of any other country. Companies don't need to just worry about themselves, either. Third-parties can open up corporate actors to liability for bribery and corruption violations.

No wonder many companies rank auditing third parties as their number one challenge. A recent survey by KPMG highlights those challenges, showing where companies are falling short in their international anti-bribery and corruption compliance efforts.

Armani has been making headlines recently, but it's not because of New York Fashion Week. Instead, the Italian fashion house is accused of something very unfashionable: discriminating against its general counsel and then firing him when he was diagnosed with cancer.

Fabio Silva, Armani's ex-GC, is currently suing the company for $75 million, claiming he was subject to anti-Mexican discrimination and retaliation when he complained. His suit also claims he was fired just minutes after informing the company he had cancer.

A dancing baby may have just made IP enforcement a bit more difficult. The baby in question, 18 month-old Holden Lenz, was caught bopping to Prince's "Let's Go Crazy" in a 29-second YouTube video. When Universal Music Group told his mother to take the video down for copyright infringement, she sued, alleging that the video was clearly protected by fair use and that Universal had illegally misrepresented the law in its notice.

And she won. On Monday, the Ninth Circuit ruled that copyright holders must consider fair use before issuing take down notices, leading to potentially big changes in how companies protect their intellectual property rights.

Here's a simple tip for corporate communications: don't start emails to your team with "Wuddup my n*****." In fact, don't use the "N word" at all. Ever. Especially not when you're working high up in a diversity-starved, struggling tech company.

It's not a hard lesson, but it's one that Yahoo's Jerry Shen failed to learn. Shen worked as a director of engineering and joined Yahoo after his fantasy football app was bought up by the purple, exclamatory tech company. He recently sent an N.W.A.-themed email throughout the company. It started with "Wuddup" and didn't get much better from there. Shen was fired the same day.

Microsoft has a new president and chief legal officer. Brad Smith, the tech company's longtime general counsel, has moved into the C-suite, becoming Microsoft's new prez and CLO. Smith joined Microsoft in 1993, back when the Internet barely existed and photographers could still get Bill Gates to lie seductively across the top of an IBM machine.

Having served as Microsoft's general counsel since 2002, Smith is no stranger to the company's legal troubles. But despite being the legal face of the sometimes aggressive tech giant, Smith is widely known as a diplomat and a thoughtful strategist, having been described as "Microsoft's peacemaker" by The Seattle Times.

Fortune magazine released its annual Most Powerful Women list yesterday. The list surveys 50 successful female business women who represent $1 trillion dollars in stock and include over 27 female CEOs (with a bonus shout out to Taylor Swift).

Sadly, none of the top 50 are lawyers. But all of them have robust legal departments that would make a great home for any ambitious in-house attorney. Here are the top 3 most powerful women in America and an overview of the legal departments that support them:

When it comes to hacking, in-house legal departments are one of the easiest targets. A new report on data breaches, put together by Verizon, identified corporate legal departments as more likely than almost any other to fall victim to email phishing scams. That's right, one of your company's biggest cybersecurity threats is its legal department.

Phishing emails can result in identity theft and the loss of confidential information, spread computer viruses and install ransomware, programs that encrypt your computer and return access for a fee. Phishing emails can be easy to fall for, too. Russian hackers were able to infiltrate the White House's email, for example, via phishing schemes. Luckily, phishing emails can be spotted and avoided.

Sure, legal writing isn't poetry. Those rare "Law as Literature" texts have some moving pieces, but so would a "Best Automotive Technical Manuals" anthology. But for all its faults, legal composition is Shakespeare compared to the formless, meaningless muck that often passes as writing in the corporate world.

Thankfully, that J.D. or Esq. behind your name can help you stave off the pressure to shift paradigms, buy-in to corporate writing core competencies, and synergize your base touching. As a lawyer in the corporate world, remember: there's no need to sound like a corporate drone.

The ranks of America's independent contractors, freelancers, and temporary workers have swelled over the past years. Many companies have eagerly switched to a contract-based workforce. After all, using independent contractors allows corporations to avoid many of the costs and risks of employment -- by shifting them onto the worker.

But, if today is the golden age of contract work, two recent developments signal that the era could be coming to an end -- or at least facing major new obstacles. The first, a decision by the National Labor Relations Board removes a significant protection provided employers using contract work. The second, the granting of class action status to thousands of Uber drivers, risks exposing corporations to significant, costly litigation for potentially misclassifying workers.