Startup America Partnership

By December 31, 2012, all deferred compensation arrangements in which payment is contingent on employee action, such as execution of a release of claims, must either include payment-timing restrictions that comport to IRS Notice 2010-80 or satisfy an exemption from section 409A of the Internal Revenue Code (the “Code”). Employers should review all deferred compensation arrangements, especially employment agreements, severance agreements, and change-in-control agreements that require employees to execute a release of claims, non-compete covenant, or non-solicitation covenant.

The National Labor Relations Board (“NLRB”) recently issued its first two rulings on employer social media policies and its first ruling on an employee’s termination due to posts on Facebook. These rulings are significant for all employers – not just those with unionized workforces – because they provide guidance regarding what social media behaviors will be deemed protected activity under the National Labor Relations Act (“NLRA”) and, therefore, what employers can and cannot regulate in their policies and practices.

September 30 was the last day for California Governor Edmund G. Brown, Jr. to sign or veto bills passed by the State Legislature during its 2011-2012 Regular Session. Governor Brown signed several bills of interest to California employers, including an overhaul of the Workers’ Compensation system, elimination of the Fair Employment and Housing Commission, new laws requiring accommodation of employees’ religious dress and grooming practices, restrictions on access to employees’ social media accounts, expanded state law protections for whistleblowers, and new rules governing employees’ rights to inspect their personnel files.

On April 5, 2012, the Jumpstart Our Business Startups Act (the JOBS Act) was signed into law by President Obama with strong bipartisan support. The JOBS Act directed the Securities and Exchange Commission (SEC) to amend Rule 506 of Regulation D under the Securities Act of 1933 to permit general solicitation or general advertising in unregistered offerings made under Rule 506, provided that all purchasers of the securities are accredited investors. The SEC proposed rules on August 29, 2012 to implement that requirement.

In its recent decision in Harris v. Superior Court (Liberty Mutual) (B195121), California's Second District Court of Appeal muddied the waters that the state's Supreme Court had sought to clarify regarding the administrative exemption. It is widely anticipated that the case will make its way to the California Supreme Court again, but at least for now employers should be cautious and conservative in their use of the administrative exemption.

Wells Fargo has won a pair of precedent-setting victories connected to the passage of the Dodd-Frank Act, which are important to all financial institutions that issued, and have recently been considering redeeming, trust preferred securities. Many trust indentures contain "Capital Treatment Event" clauses that are very similar to those interpreted in these cases. The orders of a federal judge indicate that President Obama's signing of the Dodd-Frank Act in 2010 constituted a "Capital Treatment Event" that might entitle similarly situated banks to redeem their trust preferred securities, regardless of the timing of any so-called optional redemption date, so long as all other requirements are met.

The Supreme Court’s decision in National Federation of Independent Business v. Sibelius upholding the Patient Protection and Affordable Care Act (PPACA) leaves in place the market reforms and tax provisions that have become effective under health care reform over the last two years and gives a green light to the continued implementation of these measures. All health plan sponsors and administrators should continue to take action to comply with these requirements as they become effective. Employers whose plans fail the PPACA’s minimum standards of coverage or affordability should consider restructuring their benefits to avoid heavy penalties.

In implementing Section 952 of the Dodd-Frank Wall Street Reform and Protection Act of 2010, the Securities and Exchange Commission (SEC) adopted final rules requiring national securities exchanges to adopt listing standards regarding the independence of compensation committee members, the committee’s retention of compensation advisers, the committee’s consideration of the independence of any advisers and the disclosure of any conflicts of interest of any advisers.

Since the inception of the video game age, game developers have looked to successful games for inspiration. In some cases this has resulted in the creation of sub-genres of games serving the same niche markets while in other cases it has led to nearly identical games being made available by different entities. The latter situation is what led the owner of the renowned game Tetris to file suit against Xio Interactive Inc. over its game Mino. Mino is a falling block game which incorporates gameplay rules similar to Tetris, as well as utilizing a similar playing area and geometric block combinations.

The recent opinion of the Federal Circuit in In re Bill of Lading Transmission and Processing System Patent Litigation, – F.3d – (Fed. Cir. Jun. 7, 2012)("In re Bill of Lading"), addresses in substantial detail the requirements for adequately pleading claims for direct infringement (including the direct infringement that is a necessary prerequisite for pleading indirect infringement), inducing infringement, and contributory infringement.

With the unprecedented popularity of social media, individuals have increasingly been willing accomplices in undermining their own privacy. Few would have predicted that millions of people would voluntarily log onto the Internet and share detailed private information about themselves, their friends, family and employers. Users of social media have implemented varying privacy safeguards from unrestricted blogs to Facebook posts limited to a customized list of friends. Even those who seek privacy, however, must contend with a growing practice by employers and others of requesting access to password-protected social media accounts. Social media users have lost jobs and educational opportunities as a result of the increased scrutiny of these private postings. Maryland recently became the first state to enact a law prohibiting this practice; several other states and the U.S. Senate and House have similar legislation under review.

On May 30, 2012, the State Board of Equalization (“SBE”), approved pro-posed amendments to the California Code of Regulations, Title 18, section 1684 (“Proposed Regulation”). The Proposed Regulation attempts to provide guidance as to the meaning of the broadened statutory definition of “retailers engaged in business in this state.” The statutory definition now includes retailers who are members of “commonly controlled groups,” as well as retailers who enter into agreements with “a person or persons in this state” who meet certain minimum thresholds.

The 2012 Summer Olympic and Paralympic Games in London offer a unique opportunity for companies to promote their businesses through entertainment of customers or clients at the various game venues. Has the UK Bribery Act 2010 put a damper on these time-honored business practices and the manner and methods by which business organisations seek to obtain and retain business?

The U.S. Equal Employment Opportunity Commission (“EEOC”) recently issued an Enforcement Guidance on employers’ use of arrest and conviction records in hiring, as well as published a final rule clarifying the “reasonable factors other than age”(“RFOA”) defense under the Age Discrimination in Employment Act (“ADEA”). Both the Guidance and the new regulations demonstrate the EEOC’s focus on requiring employers to demonstrate the legitimate, job-related basis for employment actions.

• The FCC's $10,000 fines for items missing from the public inspection file continue
• License cancellation no obstacle to FCC proposing $18,000 fine against former broadcaster

The Jumpstart Our Business Startups Act (JOBS Act or Act), which was signed into law on April 5, 2012, could improve substantially the fundraising prospects for private funds. Elimination of the prohibition against general solicitation and general advertising will increase exposure for private funds and, consequently, the pool of prospective investors. Although the JOBS Act and rules to be adopted in connection with the Act will in some ways revolutionize private offerings, it is important for private funds to keep in mind the restrictions on U.S. private offerings that are unaffected by the JOBS Act.

In a highly anticipated decision, on April 12 the California Supreme Court in Brinker Restaurant Corp. v. Superior Court held that employers are not obligated to ensure that nonexempt employees take their meal breaks. However, the court's guidance on the timing of breaks will come as a surprise to many employers, and the court also left the door open for more class action lawsuits.