In House - The FindLaw Corporate Counsel Blog

August 2017 Archives

Venture Capitalists to Face More Scrutiny for Harassment

Venture capitalists -- predominantly men -- have been like the gorillas in the boardroom; they sit wherever they want.

Women, on the other hand, have barely had a seat at the table. They've long suffered silently from sex discrimination and harassment in the tech industry, where startups often survive only as long as they get funding.

That culture started to change several years ago after a tell-all lawsuit scorched the Silicon Valley. Now with new legislation on the horizon, general counsel should make sure traditional VCs sit down where they're told.

While the best way to handle a lawsuit filed by a customer is to just apologize privately, not admit liability, and settle out quickly and cheaply, sometimes that's just not an option. No matter how proactive you are as a GC or in-house, some lawsuits you just can't avoid.

When your company is facing a lawsuit, particularly a class action, filed by your customer base, public perception matters (especially consumer perception). After all, your customers are who pay your company to work. If the case concerns a safety issue, failing to address the underlying issue can severely damage a company's reputation. Unfortunately, although a court may not accept remedial measures as evidence of liability, the public will see it as a dead giveaway that you're company's liable.

According to recently published research by an executive search firm, general counsels are better "forecasters," "harmonizers," and "producers," than their counterparts on a company's executive team.

As explained by the ABA journal, two of these three attributes can be explained by the legal profession's natural tendency for cautiousness. However, excepting the forecaster score where GCs only trailed non-lawyer CEOs by a couple points, GCs scored higher than other executive positions in these three important categories.

So what are these characteristics, and what's this all about anyway?

FTC Lets Amazon-Whole Foods Merger Go Forward

Why would anyone buy their groceries from an online retailer?

Amazon has about 13.7 billion reasons. The online company is closing a deal to purchase Whole Foods Market for $13.7 billion and is kicking off its new ownership by slashing prices the same day.

The massive double-sale occurs on Monday at 470 stores, crossing more states than the last solar eclipse. The company isn't telling its new prices, but says Amazon Prime members will get even bigger discounts.

Over the past decade, the concept of work/life balance has continued to increase in importance. Along with the widespread proliferation of the internet, telecommuting has become incredibly easy thanks to laptop computers, smart phones, and that glorious, glorious Wi-Fi.

However, when your workers ask for flex time, or the ability to work from home, without a medical or family reason, it can often put you in an uncomfortable position. Yes, it's very possible. Yes, we have the technology. Sure, the work can get done from an employee's home. But some employees just don't perform as well, or might take short cuts, when not in the office. Another potential problem is appearance of favoritism and employee jealousy, which can happen even when other employees need ADA accommodations for ultra personal reasons.

Fortunately, if you have a clear policy that is based in logic, denying flex time or other fringe benefits can serve as motivation rather than a morale killer.

Not everyone gets hired into good situations. Sometimes, a person is hired to replace an employee that was fired, or abruptly left for greener pastures. Occasionally, a new employee's first duty will be to clean out their predecessor's old desk ... hopefully after they're gone (talk about awkward).

When this happens with an in house attorney or general counsel, the new attorney can often feel like they unknowingly walked into a swimming pool, while blindfolded and wearing a weighted suit. Though the outgoing employee may be leaving you a mess, look at the bright side of things, their leaving opened up the job for you in the first place. Now the trick will be digging out of another person's mess.

Below, you'll find three helpful tips to get you out of the mess you inherited by taking on a new job.

When you choose an outside counsel, you do it after vetting the firm, and the attorneys that will be in charge of your matter. But when that firm decides to merge with another firm, or your specifically chosen outside counsel decides to move to a new firm, or hang their own shingle, what's an in-house attorney to do?

While it might be natural to panic and preemptively clear your calendar when you find out that your outside counsel is switching firms or their firm is merging with another practice, it should not require you to go into crisis, or damage control, mode. You don't need to frantically restart the search for new outside counsel ... yet. Remain calm, gather as much information as possible about what's going on, and plan accordingly.

As in-house counsel, the last thing you want is more work. But, if the company you work for advertises, it might be in your best, long term, interest to review all advertising before it gets pushed out to the public. Doing so could actually save you quite a bit more work, and save your company a lot of money.

Not only is there potential copyright infringement liability for copying ideas from popular culture, but regulatory compliance can lead to even costlier legal battles. As such, you might want to start giving your company's ads a quick look, and if what you see doesn't pass the smell test, it's probably worthwhile to dig deeper before letting an ad go public.

The FTC and Uber agreed to a settlement as a result of an investigation into the ride hailing company's mishandling of customer data, as well as privacy and security issues in 2014 and 2015. Part of that settlement includes 20 years worth of monitoring and privacy audits to ensure the company does not repeat the complained of behavior.

For Uber, entering into a settlement that requires extensive and long-term monitoring could actually be beneficial at this point. Due to the number of scandals that have plagued it recently, embracing the monitoring requirement could actually lead to regaining some of the lost public goodwill and trust the company once held.

Why Corporate Legal Departments Are a Petri Dish

'General counsel -- and large corporate departments -- are the law's petri dish.'

As corporate counsel balance competing interests -- acting as a company's legal naysayer and can-do partner at the same time -- they conduct business experiments they hope will lead to success. It's a delicate balance, Mark A. Cohen wrote for Forbes, that requires the general counsel to be the company's conscience at the boundaries of legality.

But what about Cohen's "petri dish"? Isn't that what scientists use to test bacteria?

Should Companies Force Employees to Take Vacation Time?

Tom Hanks, portraying a stranded survivor on a remote island, looked at a portable toilet siding and said: This could work.

Forget that he was talking to a volleyball. It was his insight that a piece of plastic could be repurposed as a sail. It literally, at least in the fictional tale of "Cast Away," saved him.

So what does this have to do with mandatory vacations? Stay with me here, it's about the journey.

Employee Data Theft Threatens Winery's Business, Lawsuit Claims

The Peju Province Winery is a family-owned business in the sunny countryside of Napa Valley, California.

Tony Peju and his wife Herta bought 30 acres there in 1982, cultivated and nurtured the winery, all while raising two daughters who rode bicycles and horses in the rambling vineyards. They work the business together, and invite visitors to "bask in the glory of summer."

But now the Pejus are reeling after former employees allegedly stole company information that threatens the winery's once-idyllic existence. In the information age, it is a story that happens all too often.

Is It Time to Update Your Company's Parental Leave Policy?

A trucking company boss asked a job prospect how close he could drive to the edge of a cliff.

Having seen two other seasoned drivers leave the interview room dejectedly, the applicant wondered if his skills were up to snuff. He finally replied: "I'd steer clear of the edge as far as possible."

He got the job and you get the point: When reviewing your parental leave policy, steer as far as possible away from crossing legal limits.

Uber's former CEO, Travis Kalanick, has found himself in the media limelight once again. But this time, it's not for any one thing in particular, but rather for all of it.

One of Uber's largest investors, the venture capital firm Benchmark, has filed suit against the former CEO for fraud, and in order to rescind a 2016 vote adding more seats to Uber's board of directors. In the lawsuit, the investment firm cites the gross mismanagement, culture of gender discrimination and sexual harassment, and even the company's deception of law enforcement using "greyball."

EEOC Rarely Files Suits for Age Bias

Age, like beauty, is sometimes in the eyes of the beholder.

When 50 is the new 40, it seems like 10 years doesn't really make a difference. But as anyone with arthritis knows, it sure feels like it.

And so it is with age discrimination claims. Sometimes it feels like age is the problem, but really it isn't. According to reports, few age discrimination cases have legs because the problem is the law.

It's all about perspective. As comedian Bill Hicks famously noted, if you watch the Rodney King attack video in reverse, you see police help him up and send him on his way.

The effectiveness of your company's employee ethics training depends entirely on your perspective and how you measure effectiveness. After you know what really matters to the company, you can design your ethics training to fit your specific needs. After all, the cost benefit analysis is going to shake out differently depending on the type, structure, and size of a business.

If your company actually want to avoid employee ethics violations, then online training is not the best option. But if your company simply wants to avoid fines for ethics violations, then online training is effective and convenient. Here's a closer look:

Raytheon Beats $1 Billion Whistleblower Suit

For the second time, a federal judge has dismissed a $1 billion whistleblower case against Raytheon for allegedly overbilling the U.S. government for satellite sensors.

U.S. District Judge Otis Wright said the plaintiff failed to sufficiently allege that the defense contractor submitted false payment claims or that its actions mattered when the government paid the claims. Wright previously dismissed the case in 2013.

In the latest ruling, the judge said Steven Mateski's allegations were too general and "barebones."

If you're an in-house lawyer that does patent work, or even just a patent attorney, your job might be threatened by artificial intelligence in the somewhat near future. After all, technology is the new personal touch. But, for now, it's the patent paralegals who are really at the highest risk of being displaced by a robot.

Patent attorneys would be colored shocked, if they had any emotions. Instead, they're probably all asking: Can I really replace Derrick with a robot?

What If You're a GC for a Cannabusiness?

Marijuana tourism; it sounds like a business idea that pot-smokers dreamt up at a party.

But this is serious business with the financial potential to attract attorneys with more than the munchies. In California, one company just bought an old ghost town.

It could be part of the marijuana boom or a bust in more ways than one. In any case, here's what you ought to consider if you become general counsel to a cannabusiness:

When assembling an in-house team of lawyers, can you recruit from your competitors? Or, better yet, since you're not going to let anyone tell you what to do, should you?

Recruiting in-house lawyers is not as simple as recruiting other employees from your competitors. Fortunately, non-compete clauses and other covenants that restrict employment for attorneys are not likely to be upheld. However, those pesky professional duties and obligations for lawyers can really get in the way and make an in-house attorney recruited from a competitor more than just nearly useless.

When it comes to making it in the world of in-house lawyering, there's often more to it than just competent work and logging enough hours. After all, the steps up at the top for an in-house attorney are often pretty far up.

How you structure your work-life balance, how you socialize at work, and even how you present yourself in the office, all makes a difference in whether you will be successful at getting to the top. You ever see a high level exec and ask yourself how they got there?

Below are three of the top lifestyle tips to help you rise to the top.

Be Proactive on Cybersecurity Due Diligence for Cyber Peace

In the fallout of the cyberwar on politics and business, few are working on achieving cyber peace.

Scott Shackleford, a law professor and researcher, is one of those few. He says peace will come from proactive policies, not after-thoughts in the aftermath of major cybersecurity breaches.

"Achieving some measure of cyber peace requires the active involvement of public and private stakeholders," he says. For in house counsel, that means applying due diligence standards to cybersecurity.

Beating Burn-Out and the In-House Blues

‘They call it stormy Monday, and Tuesday’s just as bad.’

‘Wednesday’s worse, and Thursday’s oh so sad.’ So sang bluesman Buddy Guy.

In another life, he could have been an attorney and still sung the same song. That’s because the blues can stretch out and even burn out corporate counsel, too.

So here’s a cue from the musicians and writers who help us when our hearts aren’t in our work anymore. Turn up the speakers and enjoy.

The Legal Cost of Deleted Text Messages

In litigation, a deleted text message could cost your client the case.

It could happen when you least expect it, even before opposing counsel demands that you preserve any evidence. And when your client is a company, it can be like herding cats to notify all the employees to save their text messages.

With courts handing out monetary and even terminating sanctions for deleted text messages, it pays to have an eDiscovery plan before a lawsuit happens. Here are some cases and studies to consider: