In House - The FindLaw Corporate Counsel Blog

March 2017 Archives

Tech Companies Still Hopeful SCOTUS Will End Patent-Troll Venue

It is too early to tell how the U.S. Supreme Court will rule on patent trolling in a closely watched case, but the justices didn't seem especially interested in arguments from 32 internet companies that filed as amicus curiae in the case.

The companies want the Court to cut off "patent trolls," who use venue to channel patent litigation to forum-friendly courts -- primarily in Texas. But some justices seemed tired of hearing about it.

"What's that go to do with this?" Justice Stephen Breyer asked the petitioner's attorney. "Is there some relevance to it?"

Justice Ruth Bade Ginsburg joined in, seemingly unemphathetic to the complaints about shopping for friendlier forums. "Many corporations are incorporated in Delaware," she said. "That's also said to be a friendly forum."

Corporate clients are spending significantly less on legal services than they once did. In the last year alone, legal spend has dropped 11 percent on average, according to a new survey from Bloomberg Law and the Buying Legal Council. The most successful teams were able to cut their spending by 23 percent, or nearly a quarter.

So, how'd they do it?

Retail Apocalypse Means Business for Employment Counsel

Retail apocalypse.

It conjures up images of angry workers, desolate parking lots, dogs and cats living together ...

Well, angry workers and desolate parking lots will be at the mall closures for sure. Dogs and cats living together, only if a pet store chain is closing.

In any case, the retail apocalypse is coming and it's not going to be pretty. More than 3,500 mall-based stores are shutting down in the biggest wave of retail closures since the Great Recession.

It's not the end of the world; it's just the end of thousands of stores and an untold number of jobs. But as lawyers say, one man's tragedy is another attorney's opportunity.

Lawyers know a thing or two about burnout. After all, dealing with high-stakes conflicts, demanding hours, and constant pressure, well, it's no wonder so many people find themselves at the end of their ropes. Some attorneys change practices or change careers, others implode in a more spectacular fashion.

But Johnson & Johnson thinks it might have the cure for burnout amongst its high performers -- and it involves a dietitian, a physiologist, and an executive coach. Could their approach work in your legal department?

Great Cities, New Opportunities for Women in Legal Tech

Recent reports revealed the best cities for women in tech jobs and new opportunities for women lawyers in the tech industry.

According to an annual report, Washington, D.C. is the best city in the country for women in tech jobs for the third year in a row. Forbes reported that 41 percent of the tech jobs are held by women. There is a pay gap -- with women earning 94 percent of what mean earn on average -- but the pay is higher than the national average of 84 percent.

Silicon Valley, with the highest concentration of tech jobs in the country, has traditionally been low in the annual report on women in tech. But more women are taking top legal jobs in the wider San Francisco Bay Area.

Amazon is known for its discounts, but this discount is steep indeed. The online retailer won a tax dispute with the IRS last Thursday, evading a federal tax bill of $1.5 billion plus interest.

The dispute began when the IRS accused Amazon of inappropriately lowering its domestic tax bill by transferring assets to a subsidiary in Luxembourg. But the U.S. Tax Court disagreed, calling the IRS's evaluation "arbitrary, capricious, and unreasonable."

Big data is making it increasingly easy to gain insight from unstructured information, to use satellite imagery of big box parking lots to predict stock performance, say, or to identify potential human traffickers based on bank deposits. And companies can also turn those analytic abilities inward, looking for insights into the data their own employees create.

But what ethical restraints should be placed on such data? When is using employee data a valid management strategy and when is it a step toward an Orwellian corporate dystopia?

Setting Deadlines for Outside Counsel

Einstein showed us that time is relative. For example, an astronaut on a rocketship will age slower than a pedestrian standing on Earth. Don't bother trying to figure it out, it's in the math.

Attorneys show us that time also expands. For example, a lawyer takes more time without a deadline to accomplish a task. Check your bill; that's in the math also.

As in-house counsel, it's important to make sure time is not so relative or expansive when it comes to outside counsel. Here are some tips:

What Does Your Company Policy Say About Gender Nonconformity?

When a woman reports for work in men's clothing -- and it is not a costume -- it may be time to review your company's anti-discrimination policy because the laws are changing as dramatically as some people change clothes.

In the South, in particular, the legal issues around sexual orientation are definitely not resolved. Jameka K. Evans, a Georgia lesbian who presented herself on the job as a man, discovered that even the judges are fighting about it.

Over a sharp dissent, the U.S. Eleventh Circuit Court of Appeals ruled that Evans was not discriminated against under Title VII of the Civil Rights Act. The court reversed and remanded the case for further proceedings and to allow her to amend her complaint.

Is Your Work Data Secure? Tips from IBM's Security Officer

Shamlaw Naidoo, chief information security officer for IBM, says that personal behavior is the first line of defense against cyberattacks.

"As consumers, we make the difference," she told an audience at a recent American Bar Association Techshow. "The world we live in is changing. Give yourself the benefit of taking all the steps you can."

Naidoo offered her remarks in the presentation, "Beyond Encryption: Protecting Your Assets Everywhere and All the Time." She urged cybersecurity basics -- setting up strong passwords, updating patches on computers and personal devices and ensuring encryption during internet communications.

She also talked about the problems lawyers will face in near future, as clients demand more protection for their data.

Age Discrimination Law at 50: Older and Wiser?

Age discrimination stories are not trending, like stories about discrimination based on gender, nationality, or religion these days. After all, President Trump has not banned immigrants, denigrated judges, or changed policies toward student bathrooms based on their ages. However, we are less than 100 days into his administration ...

Meanwhile, it has been 50 years since age discrimination laws took hold in the United States. The Age Discrimination in Employment Act passed in 1967, along with other legislation designed to improve civil rights and to help older Americans in the Kennedy-Johnson era.

Some say age discrimination is not as overt as it was a generation ago, but it still exits largely off the books. That's because the law has changed and many older workers just don't file formal complaints anymore.

A Primer on Relevance and Proportionality

Rodney King, that unexpected voice of reason in a wilderness of social chaos, put it this way: "Can't we all just get along?"

It's a catchphrase that can serve in the most complex situations, including discovery disputes. A judge may not quote Rodney, but the admonition still rings true and lawyers should take note.

When the federal discovery rules changed in 2015 to deal with the potential for massive eDiscovery disputes -- from the "reasonably calculated" standard to a "relevance and proportionality" standard -- one thing did not change: judges want lawyers to sort out their own discovery disputes.

Here are some pointers for in-house counsel, who have the bottom-line responsibility for limiting expensive and time-consuming waste of legal resources in discovery:

Yahoo Names New General Counsel, Arthur Chong

Yahoo has named Arthur Chong to replace Ronald Bell, who resigned as general counsel after a report that the company's legal team failed to properly investigate a huge data breach disclosed last year.

That data breach of 500 million Yahoo accounts contributed to a $350 million discount in Verizon's offer to purchase the company's internet business. It also resulted in federal indictments against two Russian spies and mercenary hackers.

As Yahoo prepares for the transition with Verizon, Chong will have his work cut out for him.

Missteps at the early stages of an internal investigation can snowball later on, frustrating your ability to respond to a crisis, whether it's a data breach, employee scandal, or potential violation of the law. Failure to react to allegations of employee misconduct could damage the reputation of the company, for example, while a slow start to an investigation could mean lost evidence. Regulatory obligations could be missed, confidential information made public or destroyed.

When you start off an internal investigation, it's essential that you start it off right.

How Businesses Are Adapting to Overtime Rule Uncertainty

Sometimes you just have to laugh about life's twists and turns. Especially since Donald Trump became president and started rolling back Barack Obama's initiatives, like the proposed rule on overtime wages.

The proposed overtime increases are long overdue and now appear to be overdone. That's because the changes were to take effect in December 2016, but a judge granted a preliminary injunction to stop them in November, and then Trump put a freeze on the regulations in January.

Nearly four months after the judge ruled, there is no appealing the injunction and the reality is setting in: overtime increases are not coming anytime soon.

Fighting Gender Bias in Tech Culture

After a high profile discrimination lawsuit rocked Silicon Valley two years ago, few insiders thought things would ever be the same in the corporate culture of high tech firms.

Ellen Pao lost her case at Kleiner Perkins Caufield & Byers, but her lawsuit brought national attention to gender discrimination in the tech industry. Pao, who is now chief diversity and inclusion officer for Kapor Center for Social Impact and a venture partner at Kapor Capital, said Silicon Valley has to stop shooting the messengers.

"I hope instead that people are listening," she said. "Whether that's HR, whether that's the manager, whether that's the press, whether that's the general public, everybody should be paying attention to these stories and to these experiences and thinking about: How do we prevent them?"

With new gender bias lawsuits against Uber, Microsoft, and other tech companies, however, it appears that things have not changed that much in the past two years. According to reports, women are still fighting an uphill battle for equality in the high tech hub of the world.

Twenty-four percent of workers telecommute at least some time, according to the Bureau of Labor Statistics, while more than a third of professionals and managers do. And working from home doesn't mean sleeping in or slacking off. Research shows that telecommuting employees are slightly more productive.

But, work from home policies aren't a panacea. If not correctly instituted, telecommuting programs can raise significant legal risks.

Meet the New General Counsel at Pinterest

Pinterest has hired as new general counsel Christine Flores, who had been working as Google's vice president of legal.

Flores worked for Google 10 years and led several corporate teams, including mergers and acquisitions, securities and corporate governance, real estate, and ethics and compliance. At Pinterest, she will lead the company's legal and public policy teams.

"Christine is a proven leader with a decade of experience in corporate law, and has tackled some of the most challenging projects in the business world -- from the Alphabet reorganization to large international acquisitions and investments," Pinterest cofounder and CEO Ben Silbermann said in a statement.

A Ninth Circuit decision interpreting Dodd-Frank to have broad whistleblower protections may have some far-reaching consequences, according to the ruling's lone dissenter. And he's not talking about disrupting administrative schemes for securities law enforcement.

Instead, the decision could risk unleashing a jurisprudential version of the parasitic alien from John Carpenter's horror classic "The Thing," according to the Ninth Circuit's Judge John B. Owens. Here's why.

Facebook Changes Business Practices to Settle Privacy Lawsuit

To settle a class action lawsuit alleging privacy violations, Facebook has agreed to change its method of sharing information that the company gleans from users' messages.

Facebook agreed to stop using data from links sent in messages to target advertising, and it will not share user data with third parties, or boost "likes" on third-party websites with that information, according to the proposed settlement.

In their complaint, the plaintiffs had alleged that "private" Facebook messages are systematically intercepted by the Company in an effort to learn the contents of the users' communications."

"This practice is not done to facilitate the transmission of users' communications via Facebook, but because it enables Facebook to mine user data and profit from those data by sharing them with third parties -- namely, advertisers, marketers, and other data aggregators," the lawsuit claimed.

Facebook's VR Future Under Threat From Possible Court Order

It's hard to read the future in tea leaves, especially if you don't believe in them -- except for an occasional sip of herbal tea.

So predicting the future of Facebook's legal battle over its virtual reality headset is, well, certainly not our cup of Nostradamus. We're just lawyers, not soothsayers. Like that's going to stop us ...

Anyway, Facebook is going to settle or lose. We can say that with some confidence because a jury already decided that Facebook infringed on a copyright for the VR technology in the case.

Covenant Transport, a trucking company in Tennessee, simply wanted to make sure that it maintained a drug-free workplace. So, like many other companies, it required new hires to pass a drug screening test. But its screening procedures required urine samples. When a medical condition kept one applicant from providing such a sample, the company simply turned him away, resulting in an EEOC lawsuit accusing Covenant of violating the Americans With Disabilities Act.

Covenant's urine-based ADA troubles are a helpful reminder of the importance of making reasonable accommodations. But such accommodations might not be limited to just those with serious medical issues -- even applicants with "shy bladders" may merit similar treatment, according to one attorney.

Creating a Team Culture In-House

There is no "I" in "team," but there is one in "In-house" counsel.

So how do in-house counsel build a team culture in their departments? Well, it's kind of a like building a sports team because everybody has a role.

But success comes when the individuals put aside personal goals for a common goal. Then everybody -- general counsel, managers and staffers -- can focus on the end result and not on individual achievements. Sometimes it takes flipping the organization chart or setting aside the in-house hierarchy.

Basketball -- a high-profile team sport in the midst of March Madness -- offers some comparisons. For the moment, let's hear it for "Defense!"

Why Your In-House Job Is at Risk Over Cybersecurity

The Russians are putting your job at risk.

No, that's not the latest tweet from President Trump. That's just the cyberchain that connects the modern lawyer's job security to some hacker a world away.

This is no joke, or at least not a very good one, especially to Yahoo's general counsel. Ron Bell was fired after the company discovered massive security breaches, including activity from a state-sponsored actor. Like I said, the Russians.

But whether Bell was the fall-guy for legal missteps or the hackers were better than the Yahoo lawyers at their jobs, the bottom line is the same. Your job is at risk, too.

It seems like not a week goes by without a new Uber story to cover -- and they're rarely good ones. Just in the past few weeks, Uber has been hit with an unpermitted self-driving car scandal, a #deleteuber campaign, a sexual harassment scandal, a related workplace culture scandal, another sexual harassment scandal, and a CEO cursing at drivers scandal. Today, there's one more to heap on the pile.

This afternoon, the New York Times revealed that Uber has been using, for several years, a secret program designed to evade regulatory authorities.

Going From Government to In-House: Tips and Warnings

If you are looking to leave a government job to work for a corporation, here's a tip: maybe you should look elsewhere.

Literally, you may have to change your search parameters because the Google results for "government lawyers leaving for corporate work" is not very encouraging. Even Corporate Counsel, a top-tier result for anything related to corporate counsel, makes it look like a daunting task.

It might take searching for "how to use government experience in the private sector" or "how lawyers can make more money without losing government benefits" to get better results. With that in mind, here are some tips -- and warnings -- about leaving government work:

Yahoo has wrapped up its investigation into the 2014 data breach that saw 500 million accounts compromised. Now the heads have started to roll, but they're not the heads you might have expected.

Yahoo general counsel Ronald Bell seems to have taken the blame for the hacking, resigning on Wednesday after the investigation concluded that his legal team had enough information to justify further investigation but did not take action.

Paypal Sued for Alleged Misuse of Charity Donations

No good deed goes unpunished, including those good deeds you can't account for.

That's the problem facing PayPay and its PayPal Charitable Giving Fund. The company is being sued for failing to account for funds that users donate to charities through its website.

The class action lawsuit, filed in Chicago's federal district court, does not allege that PayPay takes the money and runs. Rather, it says PayPal takes the donations intended for certain charities and then gives it to other charities.

Social media has become such an important platform for connection and communication that the Supreme Court is currently considering whether there's a Constitutional right to Facebook. (Seriously.) More than 2.5 billion people use social media, including the president, the Kardashians, and every tween alive, spending an average of just under two hours on social media every day. (Nine, if you're a teen.)

There's no question then why more and more companies are turning to social media as an advertising platform, whether it's Wendy's on Twitter or Home Depot on Snapchat. But social media advertising can raise some legal issues in-house counsel should be aware of.

Franklin Brown was a chairman and general counsel for Rite Aid before he was convicted of criminal fraud and sentenced to ten years in federal prison. Brown was accused of being "the hub of the conspiratorial wheel" in the company's early late-90s accounting fraud scheme.

Brown has spent years, naturally, challenging his conviction. And he's arguing that Rite Aid needs to cover his attorney fees. His case was recently taken up the Delaware Supreme Court.