By: James P. Anelli and Tanya A. Salgado
New Jersey employers should take note of a newly enacted amendment to the New Jersey Law Against Discrimination (LAD) that directly impacts employment agreements and settlement agreements of discrimination claims. The amendment was signed by Governor Phil Murphy on March 18, 2019 and is effective immediately.
The Wage and Hour Division of the U.S. Department of Labor (DOL) recently issued an opinion letter that addresses whether employees must be compensated for the time they spend participating in an employer-sponsored community service program outside of normal working hours. The specific program reviewed by the DOL did not require employees to participate, did not direct or control the volunteer activities and also provided a reward to the group of employees with the greatest community impact. The winning group’s supervisor then maintained the discretion on how to distribute the award/bonus to each employee in the group based on multiple factors, including, but not limited to, how many hours each employee volunteered during the year.
By: Lori Smith
The other day I had a client ask me to review some form documents that another party wanted to use in connection with the client’s website. The basis of the request was that he thought I had prepared, or at least reviewed, these documents when they were originally created – over 10 years ago (coincidentally I had reviewed them, but had been somewhat critical, in part, at that time as off-market). This got me thinking about how many companies (and lawyers) rely on templates or precedential deal documents collected over many years, without thinking about the specific facts and circumstances of the deal they are doing or the passage of time and how that might implicate the need for updates and revisions.
By: Carl Koerner
I was on a flight one time when the pilot announced a delay to check a mechanical issue. He said it was probably nothing, but “we always prefer to be down here wishing we were up there, than up there wishing we were down here.” It stayed with me. Of late there has been much chatter about the global economy and whether the tea leaves are predicting a correction or worse in our economy at home. So much so, that I wonder if the iconic phrase “winter is coming” will be worn out before the final season of Game of Thrones even begins. Maybe what we are experiencing is just uncertainty before the next big growth spurt. But like our pilot, wouldn’t we all be better off if we prepared for a recession that never comes rather than finding ourselves unprepared for one that does? (more…)
By: Marc Casarino
Section 220 of the Delaware General Corporation Law entitles a stockholder of a corporation to inspect a corporation’s books and records. Section 220 requests are subject to specific technical requirements, one of which is that the inspection must be for a proper purpose. The investigation of suspected mismanagement and wrongdoing by corporate fiduciaries is generally considered to be a proper purpose for an inspection. The inspection may not, however, be a substitute for discovery in pending litigation. (more…)
By: George Morrison
A recent Third Circuit Court of Appeals decision serves as an important reminder for “prevailing parties,” even employers in wage and hour matters, to seek certain costs incurred as part of litigation.
In Camesi, et al. v. University of Pittsburgh Medical Center (UPMC), et al., the Third Circuit Court of Appeals recently affirmed the Western District of Pennsylvania’s decision to award UPMC over $300,000 in costs in a collective Fair Labor Standards Act matter filed by four employees. The employees’ underlying claims related to an alleged failure to pay wages, due to a policy that automatically deducted time for meal breaks. (more…)
By: Jamie Wang
On December 18, 2018, the Securities and Exchange Commission (SEC) announced that it had approved and adopted final rules requiring public companies to disclose, in proxy or information statements for election of directors, any of their policies and practices regarding the ability of the company’s employees, officers and directors to engage in certain hedging transactions with respect to the company’s equity securities. The final rules implement provisions of Section 14(j) of the Securities Exchange Act of 1934, which was added pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. The effective date of the new rules is 30 days after publication in the federal register. As noted in the release of the final rules, the new requirements are intended to provide shareholders with information, at the time that they are asked to elect directors, about whether employees, officers or directors may engage in transactions that could reduce the extent to which their equity holdings and equity compensation are aligned with shareholders’ interests.
By: Marc Casarino
On January 15, 2019, the Delaware Court of Chancery ruled that Papa John’s International, Inc. must allow its director John Schnatter access to materials responsive to his demand pursuant to the books and records inspection statute, 8 Del. C. § 220, subject to certain restrictions on use of the materials.[1] Schnatter is Papa John’s founder, its largest stockholder and a director on its board. Until recently, he served as the company’s Chairman of the Board, CEO and spokesman. He resigned as Chairman and CEO following much publicized reports of his commentary on the NFL’s handling of player protests and his use of a racially charged term during a company training session. His spokesman role was terminated following recommendations by a special committee comprised of his fellow board members.
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By: Marc Casarino
On December 19, 2018, The Delaware Court of Chancery held in Sciabacucchi v. Salzberg [1] that Delaware corporations cannot use charter or bylaw provisions to mandate that claims under the Securities Act of 1933 (‘33 Act) must be pursued in federal court. Such federal forum selection provisions have become a frequent component of corporate constitutive documents. This largely has been in response to increasing pursuit of state court actions asserting ‘33 Act claims and particularly after the Supreme Court’s decision in Cyan, Inc. v. Beaver County Employees Retirement Fund [2] – which clarified that ‘33 Act claims may be pursued in either state or federal court.
By: Howard Jiang
Since the Enron debacle, the Financial Accounting Standards Board (FASB) has paid a lot of attention to the types of entities that were used by Enron to avoid its financial reporting obligations. The FASB released Accounting Rule Bulletin No. 51 (ARB 51) and later FASB Interpretation No.46, as revised (FIN46(R)) to shed more light on Variable Interest Entities (VIE) in which an investor has control of a company that is not based on ownership of a majority of the voting interests and the factors that trigger financial consolidation obligations.
ARB 51 requires that an enterprise’s consolidated financial statements include all subsidiaries in which an enterprise has a controlling financial interest. That rule had historically been applied to circumstances in which an enterprise had control through holding a majority voting interest. However, the financial structuring engaged in by Enron and other entities of that era revealed a weakness in focusing solely on majority voting control as there are other situations in which a party could have a controlling financial interests but not control the majority of the voting interests or in which the equity investors do not bear the actual financial risk.
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