Employment and labor law firm Littler has released the results of its seventh annual survey, completed by 1,111 in-house counsel, human resources professionals and C-suite executives. The Littler Annual Employer Survey, 2018 analyzes the impact that sweeping regulatory changes and other factors, including the #MeToo movement, are having on employers.

The firm summarized its findings:

Following a year that brought several changes to workplace policy, the survey shows employers feeling some regulatory relief with the change in administration, while cautiously anticipating less of an impact from key regulatory issues over the next year. The portion of respondents expecting a significant impact from the Affordable Care Act dropped from 33 percent in the 2017 survey to 15 percent in 2018, with similar drops in significant concern around enforcement by the U.S. Department of Labor (25 percent to 16 percent) and the National Labor Relations Board (13 percent to 8 percent).

At the same time, employers feel buffeted by the burdens created by abrupt and dramatic regulatory changes, slow-moving confirmations to key government agency positions and the growing patchwork of state and local labor and employment requirements. The majority of respondents (64 percent) said that reversals of workplace policies and regulations between presidential administrations put a strain on their businesses and 75 percent said they faced challenges as states and localities work to fill perceived policy vacuums at the federal level.

“Companies want certainty more than anything,” said Michael Lotito, co-chair of Littler’s Workplace Policy Institute. “The vast majority of employers want to comply with the law and the continuous reversals of federal workplace policy, as well as the increasingly fragmented and sometimes contradictory rules at the state and local level, is an enormous distraction for them. Uncertainty means inability to plan, budget and anticipate, and it requires constantly retraining employees and reformulating employment policies.”

Of the changes that occurred during the first year of the Trump administration, respondents identified the rollback of wage-and-hour policies (62 percent) and the new tax bill (62 percent) as the areas that have most significantly impacted their businesses.

Immigration Reform Focuses on Visas and Enforcement

Amid tightening regulation and enforcement of both legal and illegal immigration, employers expect a range of immigration-related changes to significantly impact their workplaces over the next year.

Tighter restrictions on visa adjudications, such as those for employees with specialized skills and temporary workers, was the top concern selected by 48 percent of respondents. More than a third (36 percent) expressed concern with increased workplace immigration enforcement by U.S. Immigration and Customs Enforcement and associated agencies.

“It’s not surprising that the visa process and immigration enforcement emerged as employers’ top concerns,” said Jorge Lopez, chair of Littler’s Global Mobility and Immigration Practice Group. “The increased scrutiny being applied to employment visas and rule changes impacting visa programs, which often come mid-stream and without prior warning, make it difficult for employers to plan ahead and manage their workforces. In addition, the increase in worksite enforcement and raids have naturally heightened employers’ focus on worksite compliance issues and properly addressing those concerns.”

Continued Workplace Discrimination Enforcement Expected Amid Focus on Harassment

The survey showed virtually no change in the impact employers anticipate from enforcement by the Equal Employment Opportunity Commission (EEOC) over the next year, with 76 percent anticipating an impact in the 2017 survey and 77 percent in 2018. This aligns with a key finding from Littler’s Annual Report on EEOC Developments – that the Commission actually filed more lawsuits in fiscal year 2017 than it has since 2011.

Employers surveyed expect the EEOC’s top enforcement priorities in the near-term to be harassment claims (64 percent), hiring practices (53 percent) and retaliation against employees who file discrimination or harassment claims (48 percent).

“Employers are right to expect the EEOC to continue to vigorously investigate workplace discrimination claims, particularly harassment claims and other EEOC priorities, regardless of upcoming changes at the Commission with an expected new chair, commissioner and general counsel,” said Barry Hartstein, co-chair of Littler’s EEO & Diversity Practice Group. “With the #MeToo movement and the EEOC’s focus on stemming the tide of harassment in the workplace, taking steps to minimize the risk of harassment claims should be a top priority for employers. We also should expect an active plaintiffs’ bar threatening and initiating private lawsuits during the coming year based on these developments.”

Sexual Harassment and Pay Equity Rank as Top Concerns for Employers

Among the many headline-grabbing issues swirling through the workplace, the majority of survey respondents (66 percent) ranked sexual harassment as the most or second-most concerning issue on their radar.

In the wake of the cultural shift sparked by the #MeToo movement, 55 percent of respondents have added training for supervisors and employees, and 38 percent have updated human resource policies or handbooks. However, only 13 percent have implemented new tools or investigation procedures to manage employee complaints and 24 percent have not made any changes over the past year.

“No company can afford to ignore this issue, and while many already have a good foundation, the past several months have shown the importance of reevaluating and reinforcing policies and procedures,” said Helene Wasserman, co-chair of Littler’s Litigation and Trials Practice Group. “While the law governing harassment in the workplace hasn’t changed much, employee expectations have. In addition to providing training and updating policies, it’s critical that companies have effective complaint procedures in place and that employees feel confident that reports of potential misconduct will be taken seriously and acted upon.”

Gender pay equity followed sexual harassment as the second-most concerning issue in the headlines for employers, with 41 percent placing it among their top two concerns. Companies reported taking action as a result, including conducting audits of current pay practices and salary data (61 percent) and revising hiring practices, such as updating job applications and ceasing the practice of asking candidates about prior salaries (34 percent). However, only 14 percent have modified compensation policies or taken steps to facilitate advancement of female and minority employees.

“Conducting audits is a critical first step to identifying pay disparities among employees, but with continued attention to this issue and an evolving legal landscape, an audit is just the beginning of addressing pay equity in the workplace,” said Denise Visconti, a shareholder heading the Littler Pay Equity Assessment. “As time goes on, pay disparities only become more intractable, so proactively addressing this issue helps companies mitigate risk and reinforce their commitments to treating employees equally and fairly.”

Employers Start to Embrace Data Analytics and Artificial Intelligence

Recruiting and hiring is the most common use of advanced data analytics and artificial intelligence, adopted by 49 percent of survey respondents. Employers also said they were using big data to guide HR strategy and employee management decisions (31 percent), analyze workplace policies (24 percent) and automate tasks previously performed by humans (22 percent). The smallest group of participants (5 percent) are using advanced analytics to guide litigation strategy.

“It is encouraging to see employers starting to embrace the many benefits provided by big data in helping manage their most important asset, their people,” said Aaron Crews, Littler’s Chief Data Analytics Officer. “However, it appears that many employers are not aware of the significant potential to use advanced data techniques to guide litigation strategy. The ability to leverage data early in a case, to tease out insights before you ever take a deposition or begin evaluating the credibility of witnesses, is revolutionary.”

The survey results are being released at Littler’s 35th annual Executive Employer Conference taking place May 2-4, 2018, in Phoenix, Arizona.

The NRA called on a self-described “aging Jewish hippie” who doesn’t own a gun and who frequently defends drug defendants to speak at the organization’s recent annual convention — because he’s a drug attorney who understands how the nation’s Byzantine drug laws could threaten gun owners.

Gerry Goldstein said he was as surprised as anyone to receive the invitation, reports The Dallas Morning News.

Reporter David Tarrant writes that federal law could cause pot users to lose their right to carry firearms, even in states where marijuana possession is legal. And the NRA could see a natural alliance between gun rights activists and people like Goldstein.

The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives recently sent a letter to all federally licensed gun dealers, stating: “Any person who uses or is addicted to marijuana, regardless of whether his or her state has passed legislation authorizing marijuana use for medical purposes … is prohibited by federal law from possessing firearms or ammunition.”

Read the Dallas News article.

Bloomberg is reporting that the Justice Department is considering whether to accuse Rabobank NA’s ex-Chief Executive Officer John Ryan, former general counsel Dan Weiss and its past compliance chief of obstructing U.S. bank examiners’ efforts to dig into the firm’s failures to prevent money laundering.

Reporters Jesse Hamilton and Tom Schoenberg based their report on information from two people with knowledge of the probe who asked not to be named because the investigation is ongoing.

“The potential charges could close a dark chapter for Rabobank Groep, a Netherlands banking titan with $723 billion of assets,” they write. “Thousands of miles away from its Dutch headquarters, California bank branches near the Mexican border became a pipeline for the profits of organized crime starting in 2009, according to the Justice Department. In February, the U.S. unit admitted guilt to felony conspiracy allegations and agreed to pay $369 million, including a $50 million OCC fine.”

Read the Bloomberg article.

Colorado state district courts recently solidified judicial recognition of the Colorado General Assembly’s delegation of primary jurisdiction to the Colorado Oil and Gas Conservation Commission over royalty underpayment disputes, according to an alert by BakerHostetler.

Two judges of the District Court for the City and County of Denver dismissed royalty underpayment lawsuits for failure to exhaust administrative remedies before the Commission.

The firm said these decisions are significant because one judge vacated his prior ruling in the same case that had denied a substantively similar motion to dismiss, and the other judge had previously denied a similar motion to dismiss in a different case.

Read the article.

Bloomberg Law is reporting that a little-noticed lawsuit filed in New York federal court accuses a former federal prosecutor of unethically preventing a whistleblower from telling the FTC that he hacked an embattled company’s files using “FBI surveillance software” that the prosecutor gave him.

The allegations are in a suit against former U.S. Attorney Mary Beth Buchanan and Bryan Cave Leighton Paisner LLP, the global megafirm where she is now a partner, according to reporter Samson Habte.

Plaintiff LabMD Inc., a cancer-screening firm, says it went out of business after falling victim to a “shakedown scheme” by a cybersecurity firm that hacked the lab’s files—and then reported it to the FTC when it refused to pay for “remediation” services.

LabMD’s complaint alleges Buchanan gave FBI surveillance tools to Tiversa Inc., which then allegedly used the tool to hack LabMD. It also alleges Buchanan unethically represented the whistleblower in FTC proceedings to keep him from divulging how Tiversa received the hacking tool.

Read the Bloomberg article.

The restaurant company that owns Seasons 52, Olive Garden, LongHorn Steakhouse, the Capital Grille and other well-known brands, agreed to pay almost $3 million to settle a lawsuit brought by job applicants who claimed they were denied employment because of their age, the EEOC said Wednesday.

The Miami Herald reports” “A complaint filed in Miami federal court in 2015 said it was ‘standard operating procedure’ for Darden [Restaurants] to disproportionately deny jobs to Seasons 52 applicants aged 40 and older, Reuters reported. That’s a violation of the federal Age Discrimination in Employment Act.”

Reporter Crystal Hill writes that the EEOC said applicants who were turned away were told they were “too experienced,” as well as, “we are not looking for old white guys.”

Read the Miami Herald article.

The Antitrust Division of the U.S. Department of Justice recently announced a settlement of criminal charges against Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp. for having maintained agreements not to compete for each other’s employees, according to Locke Lord.

Authors Stephen P. Murphy and Joseph A. Farside Jr. write that one executive went so far as to state in an email that no-soliciting was a “prudent cause for both companies” and that the companies would “compete in the market.”

In announcing the settlement, an assistant AG noted that the criminal complaint was part of a broader Antitrust Division investigation into agreements not to compete for employees, typically known as no-solicit or no-poach agreements.

Read the article.

The $1 billion fine levied by federal regulators against Wells Fargo is unlikely to hobble or even slow down the bank, thanks to the massive corporate tax cut passed by Congress last year, reports The Washington Post.

Reporter Renae Merle explains: “Just in the first quarter, Wells Fargo’s effective tax rate fell from about 28 percent to 18 percent, saving it more than $600 million. For the entire year, the tax cut is expected to boost the company’s profits by $3.7 billion, according to the Goldman Sachs report.”

“Despite its regulatory headaches, Wells Fargo remains massively profitable. The bank reported Friday that although the fine drove down its first-quarter profits by $800 million, it still netted $4.7 billion,” Merle writes.

Read the Post article.

Oral arguments in the biggest U.S. Supreme Court tax case in years are just days away, reports Bloomberg Law.

Oral arguments in South Dakota v. Wayfair are scheduled for Tuesday, April 17.

Reporter Ryan Prete writes that the case directly challenges the 1992 decision in Quill Corp. v. North Dakota, prohibiting states from imposing sales tax collection obligations on vendors lacking an in-state physical presence.

“The case has set off perhaps the largest amount of state and local tax-related activity in the past decade as states have tried to ‘kill Quill’ as online commerce has replaced traditional brick-and-mortar markets,” according to Prete.

He quotes Max Behlke, director of budget and tax at the National Conference of State Legislatures, as saying the South Dakota case is the “tax case of the millennium.”

Read the Bloomberg article.

Agreements among companies to not hire each other’s workers are more risky than ever, warns Pepper Hamilton LLP in a post on its website.

“The DOJ’s Assistant Attorney General for the Antitrust Division, Makan Delrahim, stated on January 19 that the division has criminal cases targeting these agreements in the works,” the post says. “Meanwhile, lawsuits challenging no-poach agreements in technology, entertainment, health care and other industries have settled, sometimes for hundreds of millions of dollars. The DOJ announced its latest settlement, a civil settlement with two rail equipment suppliers, on April 3, underscoring that it did not bring criminal charges only because the suppliers ended their agreements before the FTC and DOJ issued guidance on ‘no-poach’ agreements in October 2016.”

The article concludes with some actions that firms should take to identify and limit their exposure.

Read the article.

Fox Rothschild LLP has posted its Federal Contractors’ Guide to Small Business Administration Set-Aside Contracts, Size Standards, Size Protests, and Affiliation.

The federal government sets aside a significant portion of its procurement dollars each year for purchasing goods and services from small businesses. Small business set-aside procurements and small business contract awards (“Set-Aside Procurements” and “Set-Aside Contracts,” respectively) provide substantial opportunities for a certified small business concern (SBC) to compete for and perform federal contract work. However, SBCs awarded Set-Aside Contracts are frequently subjected to size protests filed with the U.S. Small Business Administration (SBA) by disappointed competitors looking to challenge the awardee’s size, and if successful, to disqualify the awardee from the procurement.

The Fox Rothschild LLP Guide advises federal contractors on the following issues and concepts:

●SBA Set-Aside Procurements, Set-Aside Contracts, and Size Standards;
●The parameters and purposes for SBA size protests, how they are filed, and how contractors can avoid and defend against such protests; and
●The parameters of SBA affiliation, which contractors can use to challenge Large Businesses masquerading as small business concerns, and, as importantly, must understand to protect themselves from being adversely affected by a finding of affiliation at the hands of a size protest.

Download the guide.

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Reuters reports that Wells Fargo & Co. has been offered a penalty of $1 billion by regulators to resolve outstanding investigations related to auto insurance and mortgage lending abuses, the third-largest U.S. bank by assets said on Friday.

The news agency previously had reported that the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency were preparing a fine of up to $1 billion for Wells Fargo’s auto insurance and mortgage lending abuses.

“The U.S. Federal Reserve has also imposed restrictions on the bank’s growth, forbidding it to expand its balance sheet beyond 2017 levels until it makes internal changes that addressed its board and risk management,” according to the latest Reuters report.

Read the Reuters article.

Former Federal Trade Commission officials have been pulling out their calculators in recent weeks trying to figure out just how big a fine the commission could levy against Facebook for its latest privacy mishaps, The Washington Post reports.

White former FTC chairman William Kovacic joked that the potential fine could total “more money than there is on the planet,” it’s unlikely the FTC would levy a fine so large that it would imperil the future of Facebook, report Craig Timberg and Tony Romm.

They write that David Vladeck, a former FTC director of consumer protection who oversaw the consent decree with Facebook, says he expects the commission to find new violations in light of the company’s revelations last week. Vladeck estimates the probable fines in the vicinity of $1 billion, a record for FTC privacy fines.

Read the Post report.

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In the 135 days since the Trump administration took control of the nation’s consumer watchdog agency, it has not recorded a single enforcement action against banks, credit card companies, debt collectors or any finance companies whatsoever, according to an Associated Press review.

Reporter Ken Sweet writes that’s likely no fluke: “Mick Mulvaney, appointed acting director of the Consumer Financial Protection Bureau in late November, promised to shrink the bureau’s mandate and take a much softer approach to enforcement, and records reviewed by The Associated Press indicate he has kept his word.”

Tthe bureau issued an average of two to four enforcement actions a month under former Director Richard Cordray, President Obama’s appointee. But the database shows zero enforcement actions have been taken since Nov. 21, 2017, three days before Cordray resigned.

Read the AP article.

The Washington Post reports that Facebook’s disclosure that its search tools were used to collect data on most of its 2.2 billion users could potentially trigger record fines and create new legal vulnerability for not having prevented risks to user data, three former federal officials said.

“The three former officials, all of whom were at the Federal Trade Commission during the privacy investigation that led to a 2011 consent decree with Facebook, said the company’s latest mishap may violate the decree’s provisions requiring the implementation of a privacy program,” according to reporters Craig Timberg and Tony Romm.

They quote David Vladeck, who was head of the FTC’s bureau of consumer protection when the decree was drafted and signed by Facebook, as saying that Facebook could face fines of $1 billion or more for this and the mishap in which Cambridge Analytica improperly gained access to information on as many as 87 million Facebook users.

Read the Post report.

The renewable energy industry, now designated as a technology and innovation-related area of special concern to the protection of the U.S. industrial and scientific base, is one of seven sectors that the U.S. Trade Representative recently identified as being of significant national security concern, writes Stephen Paul Mahinka in the Power & Pipes blog for Morgan Lewis.

“The USTR’s primary concern in its investigation was with acquisitions and investments related to technology transfer, intellectual property, and innovation in seven industry sectors that it specifically identified as being of significant national security concern. Renewable energy is one of the seven sectors highlighted for increased scrutiny, through expanded reviews of certain types of deals by the Committee on Foreign Investment in the United States,” according to the post.

Although the report focused on Chinese acquisitions and investments, the identification of renewable energy as one of the seven main industry sectors of concern means that acquisitions and investments by entities in other foreign nations may also be subject to heightened scrutiny by the committee, explains Mahinka.

Read the article.

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MarketWatch is reporting that the Federal Deposit Insurance Corp. could collect the largest damage award ever against a global public accounting firm when a federal judge decides what to award the agency after a verdict against PricewaterhouseCoopers.

The judge in the case has already ruled that PwC had been professionally negligent in not detecting the criminal fraud that led to the failure of Colonial Bank Group in 2009, according to reporter Francine McKenna.

The FDIC has asked Judge Barbara Rothstein to award it $625 million in compensation for the bank’s alleged net losses from a fraud with mortgage originator Taylor Bean and Whitaker, which also failed in 2009.

Even PwC’s estimate of damages based on the judge’s decision, per court filings, of $306 million would result in the largest-ever final judgment or jury verdict for accounting malpractice, MarketWatch reports.

Read the MarketWatch article.

Hunton & Williams LLP has posted an on-demand webinar discussing the Securities and Exchange Commission’s recently released cybersecurity guidance.

For the first time since its last major staff pronouncement on cybersecurity in 2011, the SEC has released new interpretive guidance for public companies that will change the way issuers approach cybersecurity risk, the firm says on its website.

Presenters are partners Lisa Sotto, Aaron Simpson and Scott Kimpel, and senior associate Brittany Bacon. They discuss the new guidance, along with changes in regulatory obligations under EU law with respect to the upcoming GDPR and historical SEC enforcement actions related to cybersecurity.

Watch the on-demand webinar.

Exxon Mobil Corp.’s attempt to derail a multistate fraud investigation into the company’s public comments about climate change flamed out in a New York court, according to wire services, via The Dallas Morning News.

The report says a U.S. district judge in New York on Thursday dismissed Exxon’s lawsuit claiming officials in New York and Massachusetts conspired with environmental groups in planning the securities-fraud probe and made up their minds about its outcome before it started.

Judge Valerie Caproni said in her ruling that Exxon’s tactic of suing in federal courts in New York and Texas to stop the state probes “running roughshod over the adage that the best defense is a good offense.”

Read the Dallas News article.

Bloomberg is reporting that Barclays Plc agreed to pay $2 billion to settle a probe into how it sold the sort of mortgage bonds that fueled the financial crisis, securing a penalty less than half of what U.S. authorities originally demanded.

Reporters Stephen Morris and Gavin Finch explained: “The British lender was the only bank to push back against the size of the settlement demanded by the Justice Department, prompting the prosecutor to file a lawsuit in the waning days of the Obama administration in 2016. The DOJ wanted a fine of about $5 billion, but the bank refused to pay any more than $2 billion, Bloomberg news reported in 2016.”

Two former executives at the bank, Paul Menefee and John Carroll, also settled Thursday and agreed to pay $2 million to resolve claims without admitting wrongdoing.

Read the Bloomberg article.