A well-drafted arbitration provision can save companies from expensive and time-consuming class litigation, two defense attorneys say in a report published by Bloomberg BNA.

Mayer Brown LLP partners Kevin S. Ranlett and Archis A. Parasharami of Washington say advise that companies and their lawyers should draft service and employment contracts with recent U.S. Supreme Court rulings on arbitration.

The two helped client AT&T Mobility draft an arbitration provision that was ultimately upheld by the U.S. Supreme Court in one of those landmark cases, AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).

The sections on the three tips are headed: “Don’t Create Uncertainty,” “Include Consumer/Employee-Friendly Terms,” and “Avoid Potentially Unconscionable Terms.”

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Pearl Meyer and the National Association of Corporate Directors will present a complimentary Nov. 10 webcast to review key findings and analysis from research into executive pay practices and offer guidance on select actions that should be considered for 2017 plans and Q1 bonus payouts.

The webinar will be Thursday, Nov. 10, 2-3 p.m. EST.

Pearl Meyer’s annual fall survey of senior executives and compensation committee members, Pearl Meyer On Point: Looking Ahead to Executive Pay Practices in 2017, looks into pay level expectations and potential changes to annual and long-term incentive plans, as well as respondents’ opinion on various Dodd-Frank provisions affecting compensation.

Webinar presenters will be:

Howard Brownstein (moderator) is president and founder of The Brownstein Corp., a nationally-known turnaround-management firm. He regularly serves as an independent director and currently chairs the audit committee of PICO Holdings Inc., and also chairs the nominating and governance and the strategic planning and risk assessment committees of P&F Industries Inc.

David Seitz is a managing director with Pearl Meyer, located in Dallas and affiliated with the firm’s Houston office. He has nearly 30 years’ experience in compensation consulting and particular expertise in long-term incentive plan design. Additional areas of concentration include director compensation, performance metrics, and total compensation strategy, among others.

Register for the webinar.

The woman partner who filed a gender discrimination class-action against Chadbourne & Parke leveled new accusations in an amended complaint on Thursday, including that the firm’s head of litigation placed a cartoon of a fat man in a bowler hat on her wall and took a postcard from her office, reports Bloomberg Law.

The complaint includes new allegations from former partner Jaroslawa Z. Johnson who is joining current partner Kerrie Campbell as a named plaintiff in the suit. Johnson ran the firm’s Kiev office for nearly 10years.

Reporter Stephanie Russell-Kraft writes that the complaint also adds six individuals as named defendants, including Abbe Lowell, the head of litigation based in D.C., and four members of the management committee — Andrew Giaccia, the firm’s managing partner; Lawrence Rosenberg, Howard Seife, and Paul Weber, who are all located in New York City. Marc Alpert, a former member of the management committee, is also named as a defendant.

Read the article.

In a new online audio discussion, Bloomberg takes a look at “all the stuff you sign when you sign on for a job.”

Citing nondisclosure agreements required for staff and volunteers in the Trump campaign, the turmoil at Fox News after Roger Ailes stepped down from the top post, and a poll that showed that up to 90 percent of respondents did not read their employment contracts, Bloomberg calls on labor and employment lawyer Brett Gallaway to break down the standard terms of a boilerplate contract and what signing that dotted line really means.

Listen to the discussion.

By Cortney Shegerian
Shegerian & Associates

The Americans with Disabilities Act protects disabled individuals from discrimination and harassment in the workplace, but what health conditions are considered disabling? According to the EEOC, claustrophobia is a disability that must be accommodated in the workplace.

Regis Corporation will pay $60,000 to former hair stylist Nora Jacquez to settle a disability discrimination suit filed by the EEOC. Jacquez told her employer she could not work in a station “if it was in a confined space located between others,” because of her claustrophobia. The employer initially gave in to her request and placed her in an open station, but later, she was moved in between two other stylists. Her requests to move back into an open station were denied, and as a result, she suffered anxiety attacks that led to her hospitalization.

Jacquez then requested up to two months off to treat her claustrophobia, but the company failed to assist her with the required paperwork. Regis Corporation eventually fired Jacquez from the SmartStyle salon in Midland, Texas.

On top of the $60,000 settlement, the company must also provide ADA training to district leaders, salon managers and hair stylists in the region. They are also required to provide their employees with information regarding disability discrimination in the workplace and how it can be reported.

An EEOC attorney commented on the case, “Claustrophobia is a serious matter. When we discovered management refused to give this employee some space, our investigation closed in on what amounted to intolerance by management.”

Some employers may be surprised to learn claustrophobia is considered a disability. According to the Americans with Disabilities Act, a person can prove he or she has a disability by meeting one of the following conditions:

• Having a physical or mental condition that substantially limits a major life activity (such as walking, talking, seeing, hearing, or learning).
• Having a history of a disability (such as cancer that is in remission).
• Believed to have a physical or mental impairment that is not transitory and minor.

Disabled employees are legally allowed to request that their employers make reasonable accommodations in the workplace for their disability, which is what Jacquez did by asking to be moved to an open station. As long as the accommodation does not severely hurt the business, employers are required to follow through and make the necessary changes.

But, employers often have a hard time determining what mental conditions are disabling, since there are rarely observable, physical signs of the disability. Even those employers who are more aware of mental disabilities may be under the impression that conditions such as depression, anxiety and bipolar disorder are the only ones considered to be disabling. But, as long as the condition can impair the ability to perform a “major life activity,” it is covered under the ADA. Because the definition of a major life activity is broad and can include everything from eating, hearing and standing to thinking, working and concentrating, many mental health conditions do qualify as disabilities.

The lesson here? Employers should never discount an employee’s health condition just because they don’t think it is serious. This case should also serve as another reminder that employers should never brush off an employee’s request for reasonable accommodations in the workplace. Just because you can’t see the signs and symptoms of a disability does not mean it doesn’t exist or deserve your attention.

Author Bio: Cortney Shegerian is an attorney with Los Angeles based Shegerian & Associates. Shegerian’s practice areas of expertise include discrimination, harassment, whistle blower retaliation and wrongful termination, among others. Her work includes all aspects of case management, with a particular emphasis on mediation, trial preparation and jury trial litigation.

Laura Bartlow of Zelle LLP writes in a post on JDSupra that the very first item on her list of rules for employers is this: Don’t make promises to your employees that you can’t or won’t keep.

“Employers’ promises include those set out in employment contracts, of course, but there are others promises made by employers that can create legal liability and that are worth regular attention,” she explains. “And it works both ways – employees, related businesses, and vendors may also be obligated by the agreements that they have made with you.”

She discusses some of the most important points to consider, including: obligations in written employment contracts’ obligations in written policies and handbooks; obligations of employees, related organizations, and vendors; and obligations created by government contracts.

Read the article.

In what may be a trend, several courts around the country this year have embraced strict interpretations of non-compete agreements, refusing to blue pencil or equitably reform overbroad or unreasonable clauses in non-compete agreements, according to an article by Christopher Lindstrom and Emily Fox in Nutter McClennen & Fish LLP’s Non-Compete Law blog.

The explain that courts traditionally have exercised the doctrine of equitable reformation to re-write provisions to render them reasonable, or at the very least, strike unreasonable provisions to save those that are reasonable.

They discuss cases from Nevada, North Carolina and New York that illustrate their point.

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A federal judge has ruled that closure of Orlando-based Butler & Hosch law firm was illegal because executives knew it would close and didn’t warn employees in accordance with federal law, reports the Orlando Sentinel.

When the firm closed in 2015, about 700 employees in Dallas, Orlando, Miami, Tampa and other locations were told in a conference call that they would not be paid for their final three weeks at work, writes reporter Paul Brinkmann. Law requires 60-day notice of mass layoffs, but employees were told of the plan on the last day.

“If the company were still functioning, the law says it could be required to pay wages and benefits for 60 days to each employee, plus a fine totaling about $21 million — $500 per day per employee,” according to Brinkmann.  But now that claim becomes part of the firm’s bankruptcy process.

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The federal Occupational Safety and Health Administrationreleased new policy guidelines in September for its review of private settlement agreements presented to the agency for approval in whistleblowing actions, reports Littler Mendelson P.C.

Authors Ed Ellis, Chip Jones and Kevin Griffith write that OSHA issued these guidelines based on its concern that certain confidentiality and other provisions in settlement agreements may unlawfully restrict or discourage employee activity that the government would like to protect and promote. The new policy guidelines track the approach recently adopted  by the U.S. Securities and Exchange Commission.

The article explains that the SEC issued an agreed cease-and-desist order on August 10, 2016 in BlueLinx Holdings, Inc., requiring the company to amend its severance agreements. “In that cease-and-desist order, the SEC directed the company to remove language from its agreements that prevented employees from accepting monetary awards from the SEC for whistleblowing complaints. BlueLinx also agreed to pay a $265,000 civil penalty,” according to the article.

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Jackson Lewis reports that, prior to entering into a first contract, an employer has a statutory obligation to bargain with the union that represents its employees before imposing discretionary “serious discipline” (such as suspension, demotion, or discharge) on any of those employees, the National Labor Relations Board again has held.

In its ruling in Total Security Management Illinois 1, LLC, 364 NLRB No. 106, the board found that discretionary discipline, like pay rates and benefits, is a term and condition of employment, and, thus, a mandatory subject of bargaining. The board also held bargaining is required about less serious degrees of discipline, such as oral or written warnings, but may occur after the discipline is imposed, write Philip B. Rosen and Howard M. Bloom.

“Despite this decision, employers and unions in the midst of first contract bargaining may continue to agree on the employer’s unilateral right to impose discipline or on a procedure for bargaining over discipline that is less cumbersome than that imposed by the Board,” they conclude.

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Juan C. Enjamio and Robert Scavone Jr. of Hunton & Williams report that the Eleventh Circuit recently addressed a novel issue: What should courts do when faced with an employment contract containing provisions that run afoul of a statute aimed at protecting the rights of men and women who serve in the armed forces?

The Eleventh Circuit answered this question in Bodine v. Cook’s Pest Control Inc., and held that an arbitration agreement in an employment contract is enforceable despite the fact that certain provisions of the arbitration agreement violate the Uniform Services Employment and Reemployment Rights Act of 1994 (USERRA).

They explain that Congress enacted USERRA in part “to prohibit [employers from] discriminat[ing] against persons because of their service in the uniformed services.”

Rodney Bodine brought suit against his former employer under USERRA and state law, alleging, inter alia, that Cook’s discriminated against him because of his military service. Bodine argued that the entire arbitration agreement of his employment contract was void under USERRA’s nonwaiver provision because the statute of limitations and attorneys’ fees provisions of the arbitration agreement conflicted with USERRA.

The appellate court affirmed the district court’s order and concluded that “USERRA’s nonwaiver provision should not be read to automatically invalidate an entire agreement with USERRA-offending terms.”

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Research conducted as part of a flagship report on human rights published in partnership with Herbert Smith Freehills shows that the growing importance of corporate human rights clauses is changing the way GCs operate, reports Legal Business.

A survey of 275 GCs and senior counsel found that 46 percent of businesses now have a human rights policy in place. For companies in the $10bn+ revenue bracket, that figure rises to 84 percent.

Reporter James Wood writes, “As Stéphane Brabant, co-head of Herbert Smith Freehills’ business and human rights group, commented: ‘Human rights are not a law-free zone for businesses. Failing to respect human rights presents real legal risks for companies and the way lawyers, both in-house and external, advise businesses requires a new way of thinking – this is a new legal practice.’ ”

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In an article in the Polsinelli blog “Polsinelli at Work,” shareholder James C. Sullivan writes about how unsettled the law is on employer/employee arbitration provisions containing class/collective action waivers. For now, some guidance on the issue may depend upon where a case is filed, and the Supreme Court likely will resolve the conflicting lower court decisions on the issue.

“Five years ago, the United States Supreme Court in AT&T Mobility LLC v. Concepcion ruled, in a 5-4 decision written by Justice Scalia, that state laws prohibiting the enforcement of consumer contracts containing an arbitration provision with a class action waiver were contrary to the Federal Arbitration Act. Within a year of that decision, the National Labor Relations Board in D.R. Horton ruled that Concepcion did not apply in the context of employee rights under the National Labor Relations Act, specifically § 7 which vest employees with the right to engage in ‘concerted activities,’ ” writes Sullivan.

The Fifth Circuit, the Second and Eleventh Circuits have ruled that class/collective action waivers in employer-employee arbitration agreements are enforceable. But in June 2016, the Seventh Circuit  turned the tide, becoming the first federal court of appeals to adopt the NLRB’s rationale in D.R. Horton. And later the Ninth Circuit adopted the reasoning of the Seventh Circuit.

Read the article.

If you want your electronic contracts to be enforceable, it is a best practice to require the counterparty to affirmatively accept the contract by checking a box or clicking a button, write Nikita A. Tuckett and Aaron Rubin on Morrison & Foerster LLP’s Socially Aware blog.

“A recent New Jersey district court decision, ADP, LLC v. Lynch, reinforces this point. Such issues most often arise in the context of website terms of use, but ADP v. Lynch involved a non-competition provision and forum selection clause contained in documentation presented to employees electronically in connection with stock option grants,” the authors write.

They continue: “ADP had presented the documentation in such a way that each employee was physically unable to click the required ‘Accept Grant’ button unless he or she had affirmatively checked a prior box indicating that he or she had read the associated documents containing the restrictive covenants and forum selection clause.”

The court denied the employees’ motion to dismiss.

Read the article.

By Katie Cook
ContractRoom

Image by Steve Jurvetson

The third season of HBO’s Silicon Valley is now complete and Pied Piper has just released its product to market. Several hurdles have been overcome in the journey to this level of fruition including one of the key executives of the company being trapped in a self-driving car and large amounts of code being accidentally deleted. Legal complications have also played a large role in the plot lines, including many issues related to contractual agreements. These include:

1. Intellectual property theft due to terms in employment agreement

The first term in a contract that became important in the plot line was that about intellectual property in Richard Hendricks’s, Pied Piper’s CEO’s, employment agreement with Hooli. Hooli was the company he was working with before leaving to work full time for Pied Piper. This term specified that the fruits of work done on his work computer would become Hooli’s intellectual property. In trial, evidence showed that Richard had performed some work for Pied Piper on his Hooli computer and so all the intellectual property according to this term was Hooli’s. However, unexpectedly and thankfully for Pied Piper, the judge noted there was also a non-compete clause in the employment agreement which was unlawful. Due to this, the entire employment agreement, as well as the employment agreements of all other Hooli employees were declared by the judge to be null and void and Pied Piper was allowed to keep the intellectual property that Richard had created.

2. Services Agreement between End Frame and Intersite

End Frame is a rival company of Pied Piper. In the first season, some of the people who go on to form End Frame trick members of Pied Piper into disclosing some of their intellectual property to them. In season two, Pied Piper becomes aware of End Frame’s existence after they lose their partnership with “Homicide,” an energy drink, to live stream a stunt for them. Instead Homicide engages End Frame for this. In an act of desperation, when it looks like Pied Piper is losing its funding, some of the Pied Piper team get their hands on the services agreement between End Frame and an internet porn company called Intersite and set out to convince Intersite to contract with them instead of End Frame. Intersite agrees to have End Frame and Pied Piper compete to see which product is the best and Pied Piper wins this competition.

3. Non-disclosure Agreement (NDA) signed by Big Head (Nelson)

Big Head (also known as Nelson) was originally part of the Pied Piper team and a friend of Richard. They knew each other from when they both worked at Hooli. After Pied Piper obtained funding, Big Head was cut from the team, but at the same time was offered a large promotion at Hooli, which he took. CEO of Hooli, Gavin Belson, continued to promote him in an attempt to outsmart Pied Piper, believing he had poached one of their best developers and that Hooli, with Big Head, could create a better product at a company inside Hooli called Nucleus. Once it became clear that Nucleus was a flop and all employee contracts at Hooli were null and void due to a non-compete clause, Hooli offers a redundancy package of $20 million to Big Head which he accepts. However, he takes this on the condition he abides by an NDA which he breaches by talking to tech blogger, C.J. Cantwell, about how Hooli covered up bad reviews about Nucleus by changing how their search engine operated.

4. Sales agreement for Pied Piper’s “box”

One investment firm Raviga takes over the funding of Pied Piper at the end of season 2 and early season 3, Richard is removed as CEO. The new CEO, Jack Barker, believes that creating a ‘box’ to contain the compression product will be more quickly adopted by the market and quicker to sell to enterprises. Richard and his team are not interested in creating the box as they have always wanted to use their compression algorithm to create a product available to consumers. His team devise a plan to create a product for consumers, while pretending to create the box product. However, Jack Barker becomes aware of this plan. In the meantime, Monica, who works for Raviga notices a term in the sales agreement for the box that gives exclusive rights to the owners to use Pied Piper’s algorithm for five years. This deal would prevent Richard and his team from creating the consumer product within that time. In the meantime, Hooli acquires End Frame for $250 million. End Frame is creating a consumer compression product and not a box. This purchase effectively sets the value of Pied Piper if it was creating a consumer compression product and makes obvious that developing a consumer product will be a much more valuable option. Jack Barker is fired by Raviga and the way is paved for the team to continue building the consumer product.

5. Partnership agreement between Erlich and Big Head

Erlich convinces Big Head to go into business with him and drafts a manipulative partnership which gives Erlich complete control over Big Head’s assets but no access for Big Head to Erlich’s Pied Piper shares. Big Head signs the agreement unaware that he is essentially giving Erlich the same financial rights as a spouse. Erlich sets about planning an extravagant party to celebrate the launch of his and Big Head’s new company which is to be called “Bachmanity”.

6. Vendor contracts for Bachmanity Insanity

The extravagant launch party for Bachmanity is held at Alcatraz and it is Hawaiian themed. Erlich engages event planner, Sasha, to organize this party and details of the party include, among other things, pukka shells, roasted pigs and flamethrowers. During the party Sasha informs Erlich that a number of vendors have called to complain that their checks have bounced and just before the main speech that Erlich and Big Head are to give Arthur Clayman, Big Head’s business partner, informs Erlich that Bachmanity is bankrupt.

8. The Retainer Agreement for Big Head’s business manager, Arthur Clayman.

This gave Mr Clayman access to Big Head’s funds. After Clayman explains to Erlich that Bachmanity is bankrupt, Erlich gets Jared Dunn, Richard’s assistant and former personal assistant to Hooli CEO Gavin Belson, to assess what has happened with the funds. He finds that $6 million has been misplaced, which they later realise Clayman has used to pay other clients. Big Head and Erlich consult the District Attorney’s office about taking legal action against Clayman but are told their case would be a low priority. Erlich is told he may have to liquidate his shares in Pied Piper to repay the debts of Bachmanity that are outstanding.

NAVEX Global will webcast a free webinar outlining updates to FLSA requirements, presented by Scott M. Nelson, a national labor and employment law authority from Baker & McKenzie, on Thursday, Sept. 22. The hour-long webinar will begin at 10 a.m. PDT (1 p.m. EDT).

New Fair Labor Standards Act (FLSA) regulations will go into effect on Dec. 2, updating the salary and compensation levels for exempt employees, impacting millions of salaried workers.

Wage and hour cases represent the most significant exposure to employers under workplace laws, NAVEX Global says on its website. This webinar will explain responsibilities and options for complying with the FLSA’s overtime provisions.

Register for the webinar.

It is undeniable that the Family Medical Leave Act (FMLA) has a legitimate purpose and many employees benefit from its protections, writes Melissa Dials, of counsel at the Cleveland office of Fisher Phillips for the Ohio State Bar Association. She points out, however, that there also are employees who abuse the law’s protections.

“This is particularly true of those who use intermittent FMLA leave when vacation or personal time is not available. Such abuse is disruptive to the work environment and can leave many managers frustrated. Fortunately, the FMLA regulations provide a number of tools that employers can utilize to curb FMLA leave abuse within the workplace,” she explains.

She discusses 10 pieces of advice: certify and recertify, ask for a second opinion, establish and enforce call-in procedures for all absences, require use of paid leave, count all absences related to the condition, require employees to schedule medical appointments around work schedule, consider temporarily transferring employees who take foreseeable intermittent leave, establish a policy prohibiting employees from working a second job while on leave, follow up on suspicious circumstances, and train front-line supervisors.

Read the article.

A common result of mergers in the business world is the layoffs of employees whose jobs have become redundant after two units are combined.

“What some people may not know is that the same thing applies to in-house legal departments following corporate mergers and acquisitions,” writes Staci Zaretsky for Above the Law. This time around, in-house counsel at beverage giant SABMiller will need to grab a drink after the company’s merger with Anheuser-Busch InBev closes next month.”

And The Global Legal Post reports:

The redundancies form part of a company-wide structural overhaul that will also see SABMiller general counsel John Davidson stand down next year once the merger is complete. Senior lawyers have already been notified of the lay-offs by Mr Davidson himself, though consultations are still ongoing and staff won’t be formally notified of the management’s decision until the middle of next month. SABMiller company secretary and deputy general counsel Stephen Shapiro has already been confirmed as one of those affected by the lay-offs, as well as deputy GC for M&A Stephen Jones and deputy GC for regulatory and industry affairs John Fraser. The company has indicated that up to 35 in-house staff will be likely be affected by the cuts.

Read Above the Law and Global Legal Post.

In orders issued just six days apart last month, the U.S. Securities and Exchange Commission (SEC) rejected language in severance agreements requiring employees to waive rights to receive additional monetary recovery, particularly awards for providing information to government enforcement agencies, reports Ogletree, Deakins, Nash, Smoak & Stewart.

“The Commission’s actions underscore its continuing scrutiny of any provisions that might impede the flow of information to the government, even where there is no evidence of any such effect. They also drive home that employers must continue to stay abreast of legal developments and modify their policies, practices, and agreements promptly.” write the authors, Margaret H. Campbell and Karen L. Vossler.

The advise employers to review and revise policies, practices, and employment agreements, including confidentiality, severance, separation and similar agreements. “In particular regarding recovery-limiting language, employers should consider carefully whether to use it at all, given that an enforceable waiver cuts off additional recovery from the employer,” they write.

Read the article.