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- With Yates Memo, the DOJ aims to prosecute more corporate executives. But will there be unintended consequences?
- The Inbox – No Fall Guys Allowed
- The Inbox – It’s Electric
- Court Disposes of Former CEO’s Claims Against Purchaser of His Company’s Trash Carts
- The Inbox – The Games We Play
- When Trouble Looms, How Many Battles Will You Have To Fight?
- Working For An Alternative Business Entity? Check Your Indemnification Rights Carefully
- The Inbox – The SEC’s Claws May Come Out
- Was American Apparel’s Lawsuit Against Former CEO Dov Charney Brought “By Reason of the Fact” That He Was Its CEO, Such That It Must Advance His Legal Fees?
- Corporate Executive Alert: Tough Clawback Rules Relating to Financial Restatements Are Coming
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The Inbox - March 15, 2013
Send up the white smoke! After a week spent locked inside our offices -- or, for some of us, inside courtrooms -- your (usually) infallible Suits by Suits lawyers have finally voted on this week's Inbox:
- Wednesday, three top multinational banks -- Citigroup, Capital One, and Wells Fargo -- all agreed to broaden their clawback policies after requests by the New York City Comptroller's Office. Clawback policies enable an employer to recover compensation, stock options, bonuses, and other monies from former high-ranking executives who are later determined to have engaged in financial misconduct. We are going to review the specific policies when released and will keep you updated. The City Comptroller's press release can be read here.
- We've said it before and we'll say it again: your corporate emails are not private! In one of a series of rulings in U.S. v. Finazzo, the U.S. District Court for the Eastern District of New York ruled that an executive "has no reasonable expectation of privacy or confidentiality in any communications" made through a work email account where the employer disclosed that it reserved the right to monitor an employee's usage of the system.
- On Wednesday, Steve Jacobs, the former CEO of the Las Vegas Sands outpost in China, sued casino magnate Sheldon Adelson, alleging (among other things) that Adelson ordered him to threaten the head of Macau's government, Chief Executive Edmund Ho, for "not playing ball" in connection with condominiums that the Sands was trying to sell in Macau. Jacobs was fired from Sands China in July of 2010 and subsequently filed a wrongful termination suit in October of that year. On a totally unrelated note, Casino is one of our favorite movies.
- Coincidentally, a former housekeeper sued Casino actress Sharon Stone -- co-star of the aforementioned film, as well as -- and do you really need to be told this? -- Total Recall, Basic Instinct, and many others, accusing Ms. Stone of retaliatory termination after the maid requested paid medical leave for injuries allegedly sustained while carrying Ms. Stone's groceries. A spokesperson for Ms. Stone claims that the charges are "utterly baseless."
- This one isn't a movie starring Arnold Schwarzenegger -- but perhaps it should be. A 62-year-old man wrestled a shark out to sea in order to save children on a beach in Australia. That's the good part. The bad part? Someone videotaped the heroic shark-wrestling; it went viral (because of course it did), and was viewed by the hero's employer -- a children's charity, no less -- who had been told the man and his wife were on sick leave. The shark-wrestler (and his wife, who had been employed by the same charity) were subsequently fired. As Rick Perry might say: "oops." (Side note for the eventual movie adaptation: According to Wikipedia, the Governator is 65.)
- Reporter Bryant Ruiz Switzky of the Washington Business Journal brought our attention to a very interesting report issued by Ernst & Young, and now we pass that along to you: the Big Four firm warns corporate directors that they are "being watched" carefully by shareholders and should tweak executive compensation and other issues accordingly. If you're involved in pay issues, you need to read this report.
- On Monday, Dr. David Naarian of Philadelphia, PA sued his former partners in 3B Orthopaedics PC over the sale of their medical practice to Aria Health, claiming that he had been defrauded out of more than $800,000 in the $4 million sale.
- Our friends at the Harvard Law School Forum on Corporate Governance and Financial Regulation have published yet another relevant article, this one by Noam Noked, "Dealing with the SEC's Focus on Protecting Whistleblowers."
- Relatedly: just this week, a federal judge drastically reduced a jury's award to a whistleblower. In 2009, Weihua Huang was terminated by the University of Virginia in retaliation for reporting U.Va's alleged mismanagement of grant money and a jury awarded him $160,000 in back pay and $500,000 in compensatory damages. Earlier this week, the trial judge granted U.Va's motion to reduce the compensatory damages awarded by the jury by 80% -- from $500,000 to $100,000 -- on the grounds that the award was "not proportional" to the injury suffered. As is typical in these cases, the court compared the award to other jury awards within the district.
- Troubles continue for the venture capital industry; we've discussed the case of Ellen Pao in considerable depth (here and here, for starters), but this week, we learned that another venture capital firm, CMEA Capital, is facing allegations of sexual and racial misconduct in the workplace, including sexually explicit behavior towards three former female employees.
- Career development coach Stacey Hawley, writing for Forbes, has penned an article entitled "Negotiating An Employment Agreement," that offers some practical tips to the executive on the move.
- And finally: who says CEOs aren't human? When VeriFone ousted CEO Doug Bergeron on Monday, he penned a weepy goodbye letter, telling staff "I will always love you and I will always love VeriFone." No word if he read the letter aloud while playing Celine Dion music softly in the background, but apparently he read our advice to departing CEOs (unlike outgoing Groupon CEO Andrew Mason).