In House - The FindLaw Corporate Counsel Blog

October 2017 Archives

Grubhub Case With Implications for Gig Economy Is Bumping to a Close

It's not a good sign when the judge interrupts your argument to call your client a liar.

Shannon Liss-Riordan, suing Gubhub over how it pays drivers, was closing in the closely-watched case. If she wins, it could have deep impact on the gig economy.

The lawyer will have to get past the judge, however, who jumped in to say her client was untruthful and the "decision would reflect that." It's not over 'till it's over, but this seems like a pretty significant foreshadow.

Project Management for In-House Counsel

General counsel are naturals at project management, even though they may not realize it.

It's like the kid who has a natural pitching arm, but only throws rocks. They need to get out of the corn field and onto the playing field.

At a time when more law firms have project managers, companies need in-house lawyers with comparable skills. It's about managing the teams.

Dressing up in costume might be a bit too unprofessional for a traditional law office, and definitely not a good idea for a court appearance. But, in less stuffy office and consumer-facing environments, letting employees dress up in Halloween costumes can be great for team building, or even sales/business.

Like anything else that's slightly questionable but has potential to be good, there are some pitfalls to watch out for. Below you'll find a couple pros and cons, and a couple tips, for letting employees dress up for the holiday.

We might all know that lawyering is secretly a service industry job. In the business world, lawyers are all too often reminded of this fact. And while our fragile egos tend to be okay with being service industry employees thanks to the high price tag associated with legal services, being commoditized might make some lawyers cringe.

Unfortunately for those business lawyers that cringe at the thought of being a commodity, the group of corporate overlords at PricewaterhouseCoopers are leading the charge to make temporary in house legal services easier to access for companies with budgets that range from large to larger.

The founder and former CEO of Insys Therapeutics Inc., John Kapoor, has been charged with bribing doctors with illegal kickbacks for prescribing Subsys, his company's powerful opioid drug. Subsys is a fentanyl-based opioid pain drug that comes in a spray bottle and was designed for cancer patients. To date, Kapoor is the highest ranking pharma exec charged in an opioid-related crime.

Kapoor is alleged to have bribed doctors to prescribe the pain med to those who did not truly need it (i.e. non-cancer patients). Additionally, the bribe and kickback scheme not only rewarded overprescribing, but also doling out higher dosages. Not only is Kapoor and company alleged to have bribed the doctors, but also it is claimed that insurers were defrauded into paying for Subsys for non-cancer patients.

Keeping up with the tech industry's recent alleged commitment to employ more women, particularly in management roles, earlier this month Apple Inc. stepped up to that plate. The tech goliath announced that a new female General Counsel and Senior Vice President of Legal and Global Security will be taking over for the company's current GC Bruce Sewell.

Meet Kate Adams, the former SVP and GC at Honeywell, who will now be stepping into that same role but for the much more high profile Apple. Before joining Honeywell, Adams practiced in New York, and had a few rather distinguished federal clerkships, including a stint as a SCOTUS clerk for Justice Sandra Day O'Connor, which has an interesting backstory.

Tort Reformers Dig at 'Judicial Hellhole'

New York City has a few nicknames.

"The Big Apple." "The Big City." "Hong Kong on the Hudson." And then there's "Judicial Hellhole."

That last one is courtesy of the American Tort Reform Association and businesses mired in asbestos litigation. ATRA, joining an amicus brief in a New York appellate division, has a problem with a recent order affecting asbestos cases there.

Are Tech Giants Too Much of a Good Thing?

Even on a bad day, one share of Amazon or Google stock is worth almost $1,000 per share.

It's all relative, but what does that mean for the average guy? It means that most people can't afford to buy the stock, and it represents the incalculable divide between the rich and the poor.

It is also what is wrong with the world, according to two startup investors. Wait, what?

How Nondisclosure Agreements Make Weinsteins Possible

The 'casting couch' was just part of the furniture in Hollywood long before Harvey Weinstein soiled the industry.

Weinstein's behaviour has been an open secret so long they joked about it at the Oscars years ago: "Congraulations to you five ladies who no longer have to pretend to be attracted to Harvey Weinstein," Seth MacFarlane said, and everybody laughed.

Of course, it's not funny anymore. Sexual harassment is not funny, and neither is keeping secrets about it.

Starting a global company may be easier than ever before thanks to the internet and the fact that just about every regulation in every country can be found online. However, navigating all those rules and regs is not for the uninitiated.

Just about any company these days can enter the global market. But to be competitive, it takes more than just a good idea, a website, and international shipping. One of the most important team members to get on board before going global is a general counsel.

GC Convicted in Payday Lending Scheme

One Learjet; an Aspen vacation home; a Ferrari race car and other sports cars. All will be available soon, with one caveat:

They are subject to forfeiture in the convictions of the general counsel and the chief executive officer in a payday loan scam. That's right, payback is a Beemer.

It is generally unheard of for an employer to have to ban employees winking at each other. Rules regarding employee misconduct usually are not that specific.

However, when employees communicate via emojis, an employer might want to make sure everyone is at least on the same page as to emoji etiquette and proper usage. After all, the last thing you want is your HR being overrun because of a kissy face emoji. And yes, emojis are everywhere now. And your younger employees might not realize that their bosses don't take them seriously because of all those silly emojis.

Attorney Jay Holland on recent episode of the Thomson Reuters podcast Legal Current explains the many pitfalls that await companies without employee emoji policies. (Disclosure: Thomson Reuters is FindLaw's parent company.)

Corporate Liability for Overseas Torts -- Finally?

It 'beggars all belief,' attorney Paul Clement told the U.S. Supreme Court.

The lawyer dragged out the medieval phrase to rail against a centuries-old law, the Alien Tort Statute. It was enacted in 1789, and Clement said it was unbelievable that his corporate client was being sued for torts abroad under the statute.

Corporations may have to become believers, however. Even though the Supreme Court has scaled back corporate liability recently, the justices listened carefully to arguments in Jesner v. Arab Bank.

According to the scholars over at the Harvard Business Review, despite what most American's may think, over the past 25 years, not much has changed when it comes to hiring discrimination for black Americans.

Shocked? You're not alone. It's safe to say that most people would have expected there to have been a drastic change particularly given that the Civil Rights Act of 1964 was passed over 50 years ago. But a recent analysis has shown that a white applicant is more than 36 percent more likely to get a call back for an interview than a black candidate with equivalent credentials.

General Counsel Are Paid More in Stock Than Cash

For most general counsel, the pot of gold is actually filled with stock.

That's what it looks like in a new report on general counsel pay trends anyway. According to Equilar, 62 percent of GC pay at the largest companies last year was delivered in stock. At tech companies, regardless of size, about 63 percent of the compensation was in stock.

The trend confirms that the biggest paydays sometimes depend entirely on market value -- the company's, not the attorney's.

EEOC Sues Denver Company for Transgender Discrimination

If the President can discriminate against military personnel who are transgender, why not a tire company?

Because it's against the law, says the Equal Employment Opportunity Commission in a new lawsuit. The EEOC has sued a Denver tire company for rescinding a job offer to a transgender man.

It might shock the conscience that an employer could be so brash, but these are confusing times for companies and their general counsel.

Like any person with self-respect, companies don't like having to play the role of the embarrassed friend that "doesn't even know that person." What's worse is when that person is a founder, or just known as a public representative, of the company.

Along those lines, the Weinstein Company had to enter damage control mode after a New York Times article last week detailed a storied past of the company's co-founder, and former Hollywood mogul, Harvey Weinstein. Allegations of sexual harassment against Harvey Weinstein that span decades were revealed. Within a few days of the news report appearing, the Weinstein Company had fired Harvey, despite his issuing an apology and promising to get the help he needs and make things right.

In an effort to prevent litigation from ever happening in the first place, many companies, on the advice of their in house or general counsel, have likely adopted arbitration clauses into all employment agreements. And as the courts have continued to uphold these clauses as valid, the extent of protection employers opted for has continued to grow.

Now, the typical employment agreement not only includes an arbitration clause, but it also has a prohibition on pursuing any collective action via arbitration. And if this seems harsh, many employers will be happy to take the next person waiting in line for your job who will be willing to accept this almost every-industry-wide standard. However, a trio of cases, recently argued before the U.S. Supreme Court may end the use of this legally lethal employment term.

L.L. Bean Sued for 'Outsider' Campaign

L.L. Bean, the 5,000-employee megastore, sells annually about $1.5 billion in boots, clothing, and outdoor equipment.

Alfwear, a 60-employee competitor, sells enough outdoor clothing to keep growing in the shadows of the Wasatch Mountain Range in Utah.

So why is the little-known company suing the household name? Because the upstart owns "The Outsider" trademark, and L.L. Bean's ad campaign says, "Be an Outsider."

A CEO may be the highest ranking corporate officer, but they are not immune from liability for their actions (though they may act like it sometimes). Fortunately for them, getting fired can be just as lucrative as getting hired. However, where there are rewards, there are usually risks.

For in-house counsel, policing your company's CEO could prove rather helpful in preventing the next Uber-style CEO debacle. But what can anyone do to stop a CEO from behaving badly short of calling the authorities?

Below, you'll find five tips on what to do if you need to police your company's CEO.

Boeing to Acquire Company Building Flying Cars

For Boeing, the future is now.

The aviation giant took two steps into the future by acquiring a flying car company and launching a hybrid-electric commuter aircraft. Boeing is buying Aurora Flight Sciences and funding Zunum Aero as it moves forward with evolving technologies in aviation.

It's an exciting time for the future of air travel -- especially for commuters and general counsel who are along for the ride.

Oracle Sued for Unequally Paying Women

Altshuler Berzon, a small San Francisco firm, has taken on some giants in the Silicon Valley recently.

The 25-lawyer firm sued Google last month, alleging gender and pay discrimination. Not ones to rest on their pleadings, the attorneys are also suing Oracle on gender grounds. In some ways, the tech giants are easy pickings because the government made similar accusations against them last year.

Tips for Shoestring Startups With No Investors

'Shoestring budgets,' according to American Heritage, came from British prisoners who lowered shoes by their laces from windows to collect money from passers-by.

Fact or fiction, everybody who starts a company knows the meaning of a shoestring budget. It means they don't have a lot of money to run the business.

Still, the British tale works because to start a business you may have to beg, borrow, but not steal -- unless you want to join the prisoners in the story. Here are some tips for startups that don't want traditional investors:

Rasta Imposta, the makers of a generic banana costume, like the one made popular by the Peanut Butter Jelly Time flash video that took the internet by storm over a decade ago, has sued Kmart over their decision to sell a different generic banana costume. Rasta Imposta became a major player in the costume industry after creating the Rastafarian hat with attached dreadlocks. 

The lawsuit alleges that the competing generic banana costume infringes on the copyrights of Rasta Imposta, as well as forms the basis of unfair competition, trade dress infringement, and false advertising claims. However, central to the lawsuit will be the question of whether Rasta Imposta's generic banana costume's design is so generic that it is not entitled to copyright protection.

Equifax Top Lawyer Facing Scrutiny

John Kelley, chief legal officer at Equifax, probably saw it coming.

We're not talking about the data breach that compromised financial information of more than 145 million Americans. Who could have known that, except perhaps the people hacking into the company's system?

But Kelley probably foresaw the backlash from the data debacle -- especially since he approved $1.8 million in stock sales by Equifax executives just before the company disclosed the breach.

In a recently filed employment lawsuit against social media behemoth Facebook in the Northern District Court of Illinois, an employee is seeking class action status to pursue FLSA claims of overtime theft due to employee misclassification. Basically, the lawsuit alleges that Facebook's "Customer Solutions Managers," "Client Solutions Managers," "Account Managers," and other similar "manager" jobs, were not actually management jobs at all.

The plaintiff claims the jobs should not qualify for exempt status, and thus, these alleged "managers" should have been receiving overtime. If successful, many other media-type businesses might need to re-review employment classifications for similar positions.

Although many people were slow to give in to the temptation and convenience that is online shopping when it first debuted, the reluctance often disappeared when a person realized they could avoid paying sales tax by buying from an out of state retailer.

However, the honeymoon of tax free online shopping soon came to an end, and sites like Amazon now charge sales tax on the items they sell. One little, multi-million dollar hiccup, however, involves Amazon's seller marketplace, which allows independent merchants to sell online.