This post deals with two related protections that state laws and companies provide for directors and officers—indemnification and advancement. Corporations usually commit to indemnify officers and directors (and sometimes employees) when, because of their connection to the company, they are pulled into legal proceedings. Corporation also usually agree to advancement - paying legal fees and costs in advance of a final determination about the individual’s right to indemnification - so that officers and directors don’t have to foot the legal bills themselves while such a matter is going on. 

• Civil Litigation
• Indemnification and Advancement

On May 29, Roseanne Barr posted a tweet comparing former Obama adviser Valerie Jarrett to an ape. ABC’s reaction was swift and decisive: it fired Barr and cancelled her show.

ABC’s decision led to pontification from various pundits and Twitter personalities arguing that Barr’s “humor” was somehow “free speech” protected by the First Amendment. 

But even if Barr was exercising free speech when she posted her tweets, that has no bearing on ABC’s lawful right to fire her. ABC is a private employer, not the government, so the First Amendment did not prevent it from taking action based on employee speech.

• Civil Litigation
• First Amendment
• Social Media
• Title VII
• Termination With or Without Cause
• Wrongful Termination

Companies and individuals frequently enter into arbitration agreements requiring that claims be brought before a private arbitrator, rather than a judge and jury. Arbitration has various benefits: it can provide quicker resolutions, reduced costs, the right to participate in the selection of the arbitrator, and arbitral expertise. In addition, some parties prefer arbitration because it offers a cloak of confidentiality that does not exist in the state and federal courts.

• Arbitration
• Class Actions
• Civil Litigation
• Supreme Court
• Title VII

Phishing. Spoofing.

These words may sound silly, but for employers, they are anything but.

Phishing is the attempt to obtain sensitive electronic information—such as usernames, passwords, or financial information—under false pretenses. Often, when bad actors engage in phishing, they use email spoofing—sending emails that appear legitimate but are anything but. These emails can dupe users into disclosing confidential personal or company information.
 

• Data Security
• Fiduciary Duties
• Civil Litigation

When an employer changes its contract with an employee, the change should be communicated clearly—and preferably, in writing. Otherwise, the employer may be at risk of finding that the old terms still control.

For example, last week in Balding v. Sunbelt Steel Texas, Inc., No. 16-4095 (10th Cir. Mar. 13, 2018), a federal court of appeals ruled that an employer had to go to trial over a salesman’s claim for unpaid commissions. 

• Breach of Contract
• Civil Litigation
• Summary Judgment
• Termination With or Without Cause
• Wrongful Termination

Tell the Securities and Exchange Commission (SEC). That’s the message the United States Supreme Court sent to whistleblowers with its decision yesterday in Digital Realty Trust, Inc. v. Somers.

As we previously covered here, the Digital Realty case involved a key issue under the Dodd-Frank Act’s anti-retaliation provision: does the provision apply to a whistleblower who reported internally, but did not provide information to the SEC?

• Dodd-Frank Act
• Civil Litigation
• Sarbanes-Oxley Act
• Whistleblowers
• Supreme Court

Companies want to attract talented leadership, and protections for officers and directors against lawsuits can be part of the total package.

This is one reason why many businesses incorporate in Delaware—Delaware law provides significant assistance to officers and directors who are named in legal proceedings connected to their corporate role. Delaware courts don’t hesitate to uphold this protection when circumstances warrant. And in Horne v. OptimisCorp, the Delaware courts again vindicated an officer’s broad rights to indemnification under Delaware law.

• Civil Litigation
• Harassment
• Termination With or Without Cause
• Fiduciary Duties
• Executive Compensation

When the calendar flips from December to January, it’s a good time to take stock of what to expect over the next 12 months. Here are four major issues in employment law that we’ll be watching in 2018:

• Arbitration
• Civil Litigation
• Department of Labor
• Discrimination
• Dodd-Frank Act
• The Basics
• Title VII
• Whistleblowers
• Wrongful Termination

Tracy Chapman famously sang about needing “one reason to stay here.” But when severance is involved, employees may look for one reason to leave—one “Good Reason.”

While Ms. Chapman didn’t sing about them, many employment contracts include a “Good Reason” clause, which allows the employee to resign and still receive severance if certain conditions are met.

For example, many Good Reason clauses provide that an employee can receive severance upon resignation, so long as the employee has suffered from a reduction in salary or benefits, diminution of duties or responsibilities, or due to a forced relocation. In some cases, these Good Reason clauses only apply when an employee resigns following a change in control of the employer (for example, a merger or acquisition).

• Severance Agreements
• Statutes of limitation‎s
• The Basics

When Congress passed the Dodd-Frank Act in 2010, it bolstered protections for whistleblowers who report certain kinds of misconduct, such as violations of securities law. At the time, the Sarbanes-Oxley Act already provided many of these whistleblowers with a cause of action for retaliation. But the new Dodd-Frank cause of action included a longer statute of limitations, a more generous damages remedy, and a right to proceed straight to federal court rather than first bringing the claim to the Department of Labor (as Sarbanes-Oxley requires).

Sarbanes-Oxley provides protection for individuals who blow the whistle internally. But courts have struggled with whether Dodd-Frank provides that same protection, or if Dodd-Frank protects only individuals who report misconduct to the Securities and Exchange Commission (SEC) directly.

• Civil Litigation
• Dodd-Frank Act
• Sarbanes-Oxley Act
• Termination With or Without Cause
• Whistleblowers
• Wrongful Termination