In House - The FindLaw Corporate Counsel Blog

March 2018 Archives

How to Spot a Great In-House Candidate

It's easy to spot great candidates for in-house counsel.

Basically, they have already arrived. They beat out all other candidates for a plum job, working in the industry that you serve.

But it's possible to overlook a great candidate if you don't know what to look for in the applicant pool. Here are some observations:

Miramax Has a New General Counsel

It looks like Robert Osher, the new general counsel and chief operating officer at Miramax, has good timing.

The industry veteran returns to Miramax after seven years as president of Sony Pictures Digital Productions, and will pick up where he left off with new opportunities and direction. The company was founded by Bob and Harvey Weinstein, but Osher dodged that bullet because Miramax was sold to Walt Disney before his time.

Now Miramax is headed by Bill Block, a finance leader in the film industry, and new ownership. For Osher, that means growth and hope for more good timing.

The living metal, or perhaps iron, legend himself, Ozzy Osbourne, has filed an antitrust lawsuit against Anschutz Entertainment Group (aka AEG) over a contract requirement that the Prince of Darkness play a show at the Staples Center in Los Angeles in order to book the O2 Arena in London.

For performers, as Osbourne alleges, this contract term encourages anti-competitive behavior as there are other venues besides the Staples Center that are suitable for performers as popular as the Blizzard of Oz. Specifically, anticompetitive tying is alleged. Rather than living with something that just isn't fair, the Great Ozz is seeking the help of the federal court in California to enjoin the enforcement of AEG's contract term, and not just for him, he's suing on behalf of all performers and underworld royalty.

Weinstein Company Bankruptcy Ends NDAs

In what may be Hollywood's worst movie, the Harvey Weinstein story is almost over.

After the sex scandal broke out last year, the celebrity world cleaned out it's dirty closet with seemingly endless tales of sexual misconduct. The list of "Weinsteins" grew from Hollywood to Las Vegas and beyond.

Perhaps those stories will never end. But the Weinstein Company is done, having met its inevitable end in bankruptcy court. Then something unexpected happened.

While most of the internet public was outraged when news of the Cambridge Analytica scandal broke, one Facebook investor and shareholder decided to take legal action.

The shareholder, Fan Yuan, filed a federal class action in the Northern District Court of California. The lawsuit claims that Facebook's privacy failures resulted in the 10 percent drop in Facebook's share price, causing significant losses to its shareholders. As noted by comedian and the Late Show host Stephen Colbert, that's equates to a $36 billion dollar tumble.

H&M Drops Lawsuit Against Street Artist

There's a case to be made that a graffiti artist may own copyrights to the scribbles on your property.

For now, however, that case will not be made. A clothing company had sued a street artist who claimed copyright for wavy lines he etched on a wall, but now the company has withdrawn the complaint.

H&M, a multi-national clothing company, voluntary dismissed its case against the popular artist. Basically, the company said, "my bad."

The litigation over whether Monsanto's flagship weed killer, Round Up, causes non-Hodgkins lymphoma heated up earlier this month. The federal district court was treated to a parade of experts expressing competing opinions on the safety of Round Up.

Notably, reports from the closing day of testimony explain that Judge Chhabria expressed skepticism as to the plaintiffs' experts, going so far as to call it "highly questionable at best and maybe junk science." And if that wasn't enough, the distinguished federal jurist is quoted calling epidemiology a "highly subjective" and "loosey goosey" field.

Software Company Accuses Military of Copyright Piracy

What happens when you put a bunch of young people in a room with a lot of computers?

In the case of the U.S. military, copyright violations happen. Hundreds of thousands of them, according to a lawsuit.

But is it really a surprise? When it's possible that even monkeys can copy a Shakespearen play, it had to happen.

In the eyewear business, the newest big player may only have 1 percent of the four-eyed market share, but if the pre-IPO investors are right, they could be in for a big post-IPO payday.

Warby Parker, the ecommerce-first, and affordable, eyewear retailer, is making headlines after its most recent round of funding raised $75 million at a valuation of $1.75 billion. For eyewear with nerdiness as the defining characteristic, the incredibly popular brand is expected to continue growing until its IPO, at least so long as Millennials keep buying those oversized frames. Though pundits seem to disagree about whether the IPO is around the corner or a far off bend.

Lawsuit Claims Walmart Issued Misleading E-Commerce Results

As if general counsel didn't have enough hats to wear already, the stock market cap is coming out for Walmart's in-house attorneys.

Walmart shares fell as much as 2.45 percent after news of a whistleblower suit, alleging the company "issued misleading e-commerce results." A wage dispute by warehouse workers might have been better because this lawsuit comes from the former director of business development.

Tri Huynh said he was wrongfully fired for raising concerns about the company's "overly aggressive push to show meteoric growth in its e-commerce business by any means possible -- even, illegitimate ones." That's right, clean up on aisles 1 through 22.

The Theranos debacle abruptly shot the company in the foot and into the spotlight all at the same time. As the story has developed over the past couple years, quite a few details have emerged about the SEC's charge of massive fraud against the company, it's CEO Elizabeth Holmes, and president Sunny Balwani.

Recently, SEC announced that it has reached a settlement as to Theranos and Holmes, but is still pursuing Balwani. The settlement requires Holmes to divest her super-majority hold, give back almost 20 million shares, pay $500,000, and give up control of the company she founded. Additionally, as part of the settlement, Holmes cannot be the CEO or director of a publicly held corporation for a decade. In earlier compromises, Holmes and Theranos agreed not to run clinical labs for a period of years and also agreed to pay millions in fines.

#MeToo, Microsoft? Big Numbers in Gender Discrimination Case

Women at Microsoft in U.S.-based technical jobs filed 238 internal complaints about gender discrimination or sexual harassment between 2010 and 2016, according to newly released court records.

In a proposed class action, the plaintiffs cite the numbers to allege the company routinely denies pay raises and promotions to women. With up to 8,000 possible plaintiffs, the numbers are daunting.

For a company with 124,000 workers worldwide, however, the complaints represent less than two tenths of a percent of the total workforce. Still, in the #MeToo times, it's enough to make general counsel take a second look.

The #MeToo movement has resulted in some serious corporate shake-ups and PR nightmares. Billionaire Steve Wynn, Hollywood mogul Harvey Weinstein, and even the former Ninth Circuit Judge Alex Kozinski, have all been ousted as a result of the public's support for victims of sexual harassment.

But not all #MeToo claims have resulted in widespread public backlash. One Silicon Valley startup faced a #MeToo charge and lawsuit without being publicly eviscerated, and what it did in response should serve as a guide for other companies that get called out.

Most employers have clear anti-retaliation policies that pretty much mirror what the law says. The basic policy, in essence, says: If you or someone files a complaint against the company (or you), then you, others, and the company, will not retaliate.

However, the word retaliate is rather vague and even high ranking officials within a company might not fully grasp how anti-retaliation laws work. And while everyone surely received some level of training during their onboarding, companies would be wise to at least retrain management on anti-retaliation practices after an exposure incident.

Life for billionaire Steve Wynn has certainly taken a turn. After accusations of sexual misconduct surfaced against him, and $7.5 million paid out in related settlements, shares of Wynn's company plummeted by 10 percent, or more than $2 billion. Wynn personally lost a quarter billion. And it gets worse from there.

A settlement was reached in Wynn's ongoing litigation with Universal Entertainment to the tune of $2.4 billion. Universal filed suit to force the redemption of shares in Wynn's company after Wynn and Kazuo Okada, his former business partner, had a falling out.

How to Address Culture and Corporate Compliance

It's a delicate thing to tell someone he's overweight -- especially if it's your boss.

But if you really care about that person -- like you don't want him to get heart disease, diabetes, or a stroke -- you have to get him away from the McNuggets. At least take him to the salad bar.

That's how it is when you are general counsel and you have to tell the chief executive officer to really change corporate culture. It's not just a cosmetic thing; it's about compliance.

Everyone's least favorite former pharmaceutical executive, Martin Shkreli was just sentenced to seven years in prison stemming from his conviction for misleading investors in two hedge funds. Apparently, the "junior varsity" prosecution, as the disgraced executive called it, was good enough.

Interestingly, Shkreli will receive six months credit for time served as his bond was revoked after his conviction because he put a bounty on a lock of Hilary Clinton's hair using social media. The bounty drew quite a bit of attention, and the Secret Service, which provides Clinton's security, and the prosecutors and court, did not think the alleged joke was funny at all. In addition to the seven years, Shkreli faced severe financial penalties, and one property deprivation that would make even the most stoic 14 year old breakdown in tears.

Toys 'R' Us to Liquidate All U.S. Stores

Toys 'R' Us is having the post-Christmas sale that many people saw coming.

That's because the company is in bankruptcy, and there appears to be no way out except liquidation. According to reports, it is making preparations for the big sale now.

It will mark the end of a store that put toys under American Christmas trees for generations. But this Christmas, there will be no more Toys "R" Us.

In-house attorneys can often be asked to help out when corruption rears its ugly head. Generally, apart from just sheer greed, corruption in business results from individual employees, or high ranking managers or officers, facing pressures that cause them to cut corners, hide facts, or manipulate data, for their own benefit. In its worst form, employees embezzle, steal, and engage in corporate espionage. At best, if this stuff is happening, you'll have a toxic culture.

Below you can read about three common pressures, both internal (to the business) and external, that can result in business corruption.

Controversial 'Lottery for Bonus' Backfires for United Airlines

They say all that glitters is not gold -- especially if it's an employee incentive plan.

Yeah, but keep your hands off mine anyway, say employees at United Airlines.

That's kind of what they said after the company planned to take away employee bonuses and reward random winners in a $100,000 lottery instead. What the workers really said was: "No !*$#!&* way!"

After 5 Decades of Data Fraud, Kobe Steel CEO Quits

It's been a really bad week for foreign steel.

Last week, President Trump announced a 25 percent tariff on all steel imports. This week, Japan's third-largest steelmaker announced its chief executive officer is resigning in a cloud of malfeasance.

The events are not necessarily related, unless you are in foreign steel. In which case, that grating sound may be your stock portfolio or your job grinding to a halt.

For Google, getting sued for diverse hiring practices was probably one of the last things the internet giant expected. After all, it's one of those progressive tech companies in Silicon Valley.

Unfortunately for Google, the company's hiring practices may be put to the test via litigation. The company may even have to go so far as to prove that it does not discriminate against white and Asian males when promoting the hiring of a diverse workforce. The latest case against it has some damning facts.

New Approaches to Hiring for the 'Right Fit'

With low unemployment rates, according to reports, the talent war has reached a "fever pitch."

In a tech-world, "talent" often means computer, research, or social media skills. Soft skills and people skills also set employees apart.

Surveys say that such candidates are in short supply. In the process, employers are finding new ways to hire people who are the "right fit."

Spotify Files for 'Risky' Public Offering

When it comes to making money in the stock market, timing is everything.

"Buy low, sell high" is an oversimplification for the average investor. Indeed, the market can become quite complicated in an age when companies can make or lose billions in one day of trading.

Spotify, the music streaming service, just revealed it hopes to trade at least $1 billion in shares in an initial public offering. Could a $1.6 billion lawsuit have anything to do with it?