In House - The FindLaw Corporate Counsel Blog

February 2018 Archives

3M to Pay $850 Million to Settle Water Contamination Lawsuit

Many cases settle on the courthouse steps, but not many of those settle for $850 million.

Even fewer pay up in two weeks. And who pays it all in one lump sum? That would be 3M in a settlement with the State of Minnesota.

The settlement is reportedly the largest in the state's environmental case history. And it all started with drops of water.

GE's Mounting Legal Troubles May Cost Billions

Sometimes general counsel has to be the kid with a finger in the dike.

It may not stop the inevitable, but at least people will tell a good story about you. That's what the attorneys may feel like when it's all over at General Electric Co.

The company reported a $15 billion hole in its financials last month, and the repercussions are deep. Now the attorneys are scrambling for cover.

New SEC Rules on Public Companies' Cybersecurity

With companies being hacked virtually every day, the Securities and Exchange Commission released guidelines for them to take more security measures.

The Equifax cyberattack, in particular, pushed the agency to publish the new cybersecurity standards. The credit reporting agency failed to report a cyber breach that exposed about 145 million consumer records, even as some company executives sold off their shares before disclosing the breach.

When litigants warn courts that ruling a certain way will result in the litigation floodgates opening, most probably aren't referring to actual, literal floods. However in recent months, more and more lawsuits have been filed against oil producers as a result of damage caused by climate change. Interestingly, it's now the plaintiffs warning the courts about floods.

As climate science continues to improve and courts continue to recognize the validity behind that client science, oil producers can likely expect to face lawsuit after lawsuit. The oil producers steadfastly claim that the alleged damages can't be traced to any one company, and that they're not responsible because they did not burn the oil they produced, but rather their customers did. However, these arguments could go up in a puff of smoke (like they did for big tobacco), particularly with the recent developments in attribution science.

Ediscovery Data Mapping Overview for Your Business

Knock, knock, Neo.

If you are reading this, maybe there's something wrong with your world. What you know, you can't explain, but you feel it.

We're talking about ediscovery here. It really is another world, and no one goes down that rabbit hole willingly. You are going to need a map.

With a name like hers, and a case that instructive, in house lawyers will likely be writing celebratory ballads (or maybe just limericks) about Andrea J. Mosby-Meachem for generations to come. That's because she's an in house public utility lawyer who sued, and won, after being denied temporary work from home due to a disability.

In house lawyers are a much more creative bunch than they often get credit for (proof). And while winning a verdict doesn't automatically turn a plaintiff into a legend worthy of lofty prose, when a plaintiff wins on appeal and has a rhyme-worthy name, the limericks really just write themselves:

Company's Loss Turns Into Lawyer's Nightmare

There is a sleepless night in every lawyer's career.

For Donald J. McNeil, that night has probably lasted a long time. McNeil and company took the brunt of a heavy-handed slap in federal court.

If the lawyers weren't awake during the trial and appeal, they should be now. The appeals court blamed them for a $340,000 loss and sanctioned their client with opposing counsel's fees, too.

The general counsel for Midas's parent company (TBC Corp.) recently received a two year stayed suspension as a result of another former in-house colleague tipping off authorities in two states. It was alleged and eventually admitted that the TBC GC engaged in the (accidental) unauthorized practice of law. Interestingly, while the GC lives and works in Florida, the suspension was issued from the Supreme Court of the state of Ohio.

The attorney moved from Ohio, where he was licensed, to Florida to take the in-house position with TBC. Somehow, he managed to miss notices that he was out of compliance for his CLE in Ohio and that he had been suspended. And though the first suspension seemed to get resolved without much on his part, a second suspension issued when the conditions for resolving the first went unfulfilled.

Despite the push of modernity demanding that businesses tear down the cubicle walls in favor of open concept offices, in-house lawyers aren't clamoring to join that club. In general, in-house attorneys do not like working in cubicles, let alone open work spaces, due to the lack of prestige that comes from not having an office.

Sure, there are privacy and confidentiality issues to consider as well. However, depending on the type of work, many attorneys don't need anything more than a computer (hopefully with a couple large monitors) to complete it, which can really put those big concerns to rest. But that still doesn't mean lawyers want to work in an open space.

Corporate sustainability is a big deal these days, even if a lot of it is just a bunch of puffery. Nevertheless, companies want to be seen as sustainable, regardless of whether the only thing sustainable about their product is the recycled paper in the packaging.

Even if you personally view corporate sustainability as some barely-less-than-a-sham attempt at greenwashing, the following sustainable practices are just fiscally smart, though the last one might just be a bit too green for most.

Does Uber App Cheat Drivers?

There's an app for that, but not for that lawsuit.

At least, that's what Uber might say. A class action, however, says the Uber app is cheating drivers out of money.

It's a little more complicated than that, but it comes down to numbers. When your company uses a money-making program, make sure the accountants have worked out the details.

Working for a startup can come with a lot of perks including flexibility and a fun environment. But when a VC invests to the point where it can push out your startup's founder, you might want to consider reviewing the situation.

While the research shows that companies that are doing well to begin with go on to be even more successful when a founder is replaced with someone who actually has business acumen, a founder getting axed from their own company is a rather ominous sign of things to come for that relaxed environment. If the startup you work for is doing well and your founder gets replaced, you can probably say goodbye to the weekly in office masseuse and other ridiculous perks that attracted you there in the first place as logic might just be taking over in an effort maximize profits and the company's valuation.

Startup Boards Aren't Holding Founders Accountable, VC Warns

To hear Bill Gurley tell the story about inside the boardroom, it sounds like venture capitalists are afraid.

They tip-toe around the conference table, trying to avoid the elephant in the room. They don't want to ask the founders to, gulp, "perform financially."

"Our business has gotten super competitive," Gurley said at a technology conference. "What the venture capitalist is afraid of is losing the next big one."

Workplace Victims of Sexual Harassment Need Access to Courts, 56 AGs Say

When every state attorney general says the same thing about workplace harassment, it might be time to listen.

In a letter to Congress, the National Association of Attorneys General urged lawmakers to enact legislation to protect workers from sexual harassment. For a group of lawyers chiming in from 50 states and six territories, their message was clear.

Sexual harassment cases should not be shuffled off to private arbitration. It's time to bring those cases out in the open.

Along with the increasing trend of employers using an employee's biometrics to secure data, employers are facing more lawsuits as a result of running afoul of state laws imposing restrictions, and penalties, relating to their employees' rights to biometric privacy.

For example, in Illinois, the Biometric Information Privacy Act (BIPA) not only regulates the disclosure, retention, and protection of biometric data, the act contains a private right of action and statutory damages. BIPA allows employees to sue individually, and for every violation proved, they get $1,000 or $5,000 depending on whether the violation was shown to be negligent or intentional.

Amazon Reportedly Cutting Hundreds of Corporate Jobs

Seattle is America's biggest company town thanks to Amazon.

The online giant has more office space than the city's next 40 biggest employers combined, the Seattle Times reported last summer. It's 8 million-square-footprint there is expected to grow to more than 12 million square feet in the next five years.

Well, that was last year. This year, Amazon is laying off people.

If your company, firm, or nonprofit, ever hosts golf outings, or sponsors golf tournaments, or runs contests, there is a big lesson to learn from the All Risks v. Old White Charities case. That lesson involves reading and following the terms of your contest's insurance policy, particularly when it comes to a hole-in-one contest with exposure into the hundreds of thousands.

Also, in case you didn't know, apparently you can buy insurance for hole-in-one contests. But, if you do dare hold one, you should read on to learn from another charity's technical and costly failure.

Being in house often means feeling disconnected from the rest of the legal world. When in-house attorneys show up to networking or social events with practicing lawyers, it can often feel like inside counsel are from Earth, while litigators are from Dante's fourth circle.

However, it doesn't have to be that way for in-house counsel. With a little bit of extra reading in their free time (which notably in-house counsel actually have, as opposed to litigators who gave up free time along with family and any sense of ever being able to relax), an in-house attorney can remain relevant, keep up to date, and even find some enjoyment.

Below, you can read about the three best things to read for in-house counsels.

Former GE Lawyer Suspended for Disclosing Company Info to Reporters

When a reporter calls, it's a good idea to answer rather than be identified as the "no-comment" lawyer.

That's like pleading the Fifth, and it doesn't go well in the court of public opinion. When you do talk to the media, however, be careful about what you say.

M. Adriana Koeck learned that lesson the hard way. She has been suspended from law practice for 60 days because she disclosed confidential company information.

Although the FLSA only mandates certain employers comply with the laws on accommodating employees that express milk, or breastfeed and need to pump, state and local ordinances have been passed that put the same or more stringent requirements on even the smallest employers.

Generally, for employers that qualify under the federal or state/local law, employees must be provided with a dignified place to take care of their needs. This includes a space that is not a bathroom. However, things like seating, a table or desk, a sink, a refrigerator, and most of all, privacy, are usually necessary.

Lululemon's CEO, Laurent Potdevin, abruptly resigned amid a vague company statement claiming there was some misconduct involving employees. Details are few, but, from what is known, one thing is for sure, Potdevin doesn't seem to be facing any real consequences. To exit, Potdevin will receive nearly $5 million.

Unfortunately for Lululemon, despite the company seeming to pull out ahead of a public scandal, their stock price took a hit on the news. As noted by Bloomberg, the company has recently suffered some rather high turnover in management. Potdevin had only taken over as CEO in 2014.

Red Cross GC Resigns Over Sexual Harassment Report

This sexual harassment case wasn't even three degrees of Harvey Weinstein.

Weinstein harassed half of Hollywood's ingenues, but nobody at the Red Cross. According to reports, however, former Red Cross executive Gerald Anderson sexually harassed workers there.

Now David Metzler, general counsel for the organization, has resigned over the disclosure. It's barely a connection, but close enough in the Weinstein era.

Pay Stub Compliance in the Digital Age for California Businesses

For in-house counsel, playing the devil's advocate is definitely not a game.

With apologies to Keanu Reeves, it's not even a movie. And you definitely don't have to like him.

But the devil's advocate can help you avoid pitfalls that will drag your company through hell. We're talking about that no-good plaintiffs' counsel who wants to sue for wage violations hidden in pay stubs.

Business Talk: Words That Make You Sound Weak

In the lexicon of leadership, there are some words you should not say.

They suggest weakness or failure, a tentative approach when directness is required. Leaders should use assertive language that conveys "confidence and authority," says one writer.

It's all good to delete some expressions for business purposes, but remember what George Carlin said about forbidden words: "You never know what's going to be on the list because it's always somebody else's list."