Federal Trade Commission Increases Interlocking Directorates Thresholds
On January 24, 2012, the Federal Trade Commission announced its annual revision of the interlocking directorates thresholds under Section 8 of the Clayton Act. The new thresholds were effective January 27, 2012. The purpose of Section 8 of the Clayton Act is to prevent a “person” from serving as an officer or director of corporations that compete with one another in the marketplace, unless that competition is very limited. For more information on the new thresholds, please click here for the January 27, 2012 Alert published by the Antitrust and Competition Client Service Group.
Premerger Notification Thresholds Increased
Effective February 27, 2012, the jurisdictional thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will be increased. Pursuant to statutory amendments made in 2000, the thresholds are annually adjusted based on changes in gross national product. One key effect of this year’s indexing is that transactions will only be reported if the Size of Transaction exceeds $68.2 million, an increase over last year’s $66 million threshold. To read more about the 2012 thresholds, please click here for the Alert published by the Antitrust and Competition Client Service Group on January 27, 2012.
SEC Changes Settlement Policy for Enforcement Actions With Parallel Criminal Proceedings
The SEC announced in January a significant change in its settlement policy for civil enforcement actions in which the defendant is also subject to parallel criminal proceedings. Under the SEC’s new policy, any defendant who has admitted to or been found guilty of criminal conduct cannot settle parallel SEC charges without also admitting the SEC’s allegations. For more information on the new policy, please click here to read the Alert published by the White Collar Defense & Investigations and Securities Litigation & Enforcement Client Service Groups on January 13, 2012.
NAD Reviews Use of Facebook’s “Like” Feature in Promotions
In 2010, Facebook offered its users the ability to click a button indicating that they “like” a company or a product. Once clicked, the “liked” product appears on a user’s Facebook Wall and the user’s screen name or icon could also appear on the company’s Facebook page along with other users who liked the product. Companies quickly realized the benefit of being “liked,” and encouraged consumers to “like” their products by making incentives available only to those who liked the product. This practice is often referred to as a “like-gated” promotion. The use of these promotions has raised consumer protection questions, and the National Advertising Division of the Council for Better Business Bureaus (“NAD”) has recently issued its first decision involving a like-gated promotion. To learn more about the decision and allegations considered, please click here to read the Bulletin published by the Internet & New Media Group on January 3, 2012. (more…)
SEC and FINRA Issue Guidance on Broker Dealer Branch Inspections
Broker-Dealers who face inspections from regulators should take heed of recent guidance provided by the two principal securities regulatory agencies. The regulators are the Financial Industry Regulatory Authority (“FINRA”) and the SEC’s Office of Compliance Inspections and Examinations. Their jointly issued “National Examination Risk Alert” offers guidance on policies and procedures that broker-dealers should consider for branch office inspection programs. To learn more, please click here to read the Alert published by the White Collar Defense & Investigations and Securities Litigation & Enforcement Client Service Groups on December 13, 2011.
State Taxation of Former Residents’ Retirement Income
Recently, the New York State Department of Taxation and Finance issued an Advisory Opinion regarding whether New York State may impose income tax on distributions from a nonqualified deferred compensation plan made to a former resident. The opinion, consistent with federal law, concluded that New York State may not impose tax on these retirement payments. To read more about the Advisory Opinion, please click here for the Alert published by the Employee Benefits and Executive Compensation Client Service Group on December 28, 2011.
Reminder Regarding Information Reporting For Corporate Actions That Affect Stock Basis
Issuers of securities who undertook an “organizational action” in 2011 that affected the basis of such securities are required to file an information return reporting such action. The Information Return for actions taken in 2011 was due to be filed January 17, 2012 for actions taken in 2011. For more information on timing of returns for actions in 2012 and subsequent years, please click here to read the Tax Advice and Controversy Client Service Group Bulletin published December 30, 2011.
FED Releases Second Set of FAQs on Durbin Rules
The Federal Reserve Board recently posted a second set of questions and answers to the “Frequently Asked Questions About Regulation II (Debit Card Interchange Fees and Routing)” on the Fed’s website. This current release of FAQs has been merged with the previously published FAQs, with the newer questions annotated with the date added. For a summary of the new issues addressed in the FAQs, please click here to read the Alert published by the Financial Institutions Client Service Group on November 28, 2011.
FinCen Issues FAQs and Holds Webinar on Prepaid Access Rule
The Financial Crimes Enforcement Network ( “FinCEN”) recently released a set of FAQs related to the final rule on prepaid access that was issued on July 29, 2011 (the “Rule”). The FAQs are intended to provide interpretive guidance for the Rule, not supersede or replace any part of it. FinCen also recently gave a webinar presentation on the Rule. The most significant clarifications to the Rule made by FinCen are discussed in an Alert published by the Financial Institutions Client Service Group on November 28, 2011. To read this discussion, please click here.
Supreme Court to Determine Whether Corporations Are Liable in U.S. Courts for Human Rights Violations Committed Abroad
The U.S. Supreme Court may soon decide the extent to which corporations may be sued for alleged human rights violations which arise in connection with their business activities outside the U.S. The Court has granted certiorari petitions in two cases brought against corporations for alleged human rights violations committed abroad. In each case, the claims were discussed by a Court of Appeals on the ground that corporations are immune from such suits. The cases will be argued in tandem, even though different statutes apply. To read more the cases and the statutes being applied, please click here for the Alert published by the Commercial Litigation Client Service Group on November 11, 2011.
NLRB Postpones Effective Date of “Employee Rights” Posting Requirement
The National Labor Relations Board announced on October 5, 2011, the decision to postpone until January 31, 2012 the effective date of its recently published rule requiring employers to post notices informing employees of their rights under the National Labor Relations Act. The NLRB finalized its new notice-posting requirement in August and at that time announced that the rule would take effect on November 14, 2011. However, federal lawsuits were filed challenging the rule and prompting many questions and uncertainty from employers across the nation. To learn more about the rule, please click here to read the Alert published by the Labor & Employment Client Service Group on October 6, 2011.
The Computer Fraud and Abuse Act (CFAA) — The Benefits of a Computer Use Policy That Restricts Employee Access
Employers that provide employees unfettered access to company computer systems may unwittingly forfeit a valuable statutory remedy against the misappropriation of electronic data. Such employers should ensure that they have a computer use policy in place that explicitly distinguishes between authorized and unauthorized use. To learn more about the Act and the federal avenue it provides to pursue employees who have misappropriated electronic information, please click here to read the Alert published by the Labor & Employment Client Service Group on October 27, 2011.
Qualified Retirement Plan Limits for Calendar Year 2012
The IRS has announced its 2012 cost-of-living adjustments for retirement plans. To access a chart reflecting the qualified plan limits for calendar years 2009-2012, please click here for the Alert published by the Employee Benefits & Executive Compensation Client Service Group on October 24, 2011.
FINCEN Issues a Notice of Proposed Rulemaking Requiring Cross-Border Report for Prepaid Cards
The Financial Crimes Enforcement bureau has released a proposed rulemaking that would require consumers holding prepaid cards aggregating more than $10,000 in value to report the cards when crossing into or out of the U.S., in the same way that they report cash, travelers checks and other monetary instruments. Please click here to read the Alert published by the Financial Institutions Client Service Group on October 18, 2011.
Social Media and the National Labor Relations Act: A Trap for Unwary Employers
The use of social media has become one of the most rapidly-changing areas in employment law today. What most employers do not realize is that the National Labor Relations Board has become very active in policing both the substance of social media policies and the actions of employers in addressing social media concerns. Please click here to read an overview of NLRB activity in the area of employee use of social media published by the Labor & Employment and Internet & New Media Client Service Groups on September 23, 2011.
Check It Out and Check It Off: 2012 Group Health Plan Checklist
While the Patient Protection and Affordable Care Act, as amended (“PPACA”), required significant design changes for group health plans in 2010 or 2011, some additional requirements must be implemented for 2012. Please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on September 7, 2011.
IRS Establishes a Voluntary Classification Settlement Program
The IRS recently announced a new settlement program for employers with misclassified workers. Under the new program, employers can get a significant reduction in their federal employment tax liability associated with past nonemployment treatment by agreeing to properly classify their workers for future tax period. The announcement came on the heels of recent announcements that the IRS, Department of Labor and various state agencies are collaborating on examining worker misclassification issues. To learn more about the new program, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on September 30, 2011.
Department of Labor Issues Final Rule Requiring Follow-On Contractors to Hire Their Predecessor’s Employees
The Department of Labor issued a final rule just before Labor Day that, in effect, will given certain employees now performing under Federal government service contracts employment for life or at least for as long as the government continues to contract for those services. Although the rule does not take effect until the Federal Acquisition Regulation Council issues its complementary regulations, matters are sufficiently final that contractors should begin planning for how they are going to comply. To learn more about this new regulation, click here to read the Alert published by the Government Contracts Team on September 8, 2011.
U.S. House Panel Hears Divergent Opinions on SRO Oversight of Investment Advisers
Fund managers and other investment advisers should be aware that Congress is now considering legislation that would significantly alter regulation of the nation’s registered investment advisers. A key House subcommittee has heard widely divergent views on the proposed legislation entitled the “Investment Adviser Oversight Act of 2011.” To learn more about the draft legislation, click here to read the Alert published by the White Collar Defense and Investigations Securities Litigation and Enforcement Client Service Groups on September 20, 2011.
New Patent Reform Bill Poised to Significantly Change U.S. Patent Law
On September 8, 2011, Congress approved the Leahy-Smith America Invents Act of 2011. The Act materially alters a long history of patent law in the United States. Among the provisions addressed by the Act are who is entitled to a patent (“first to file” versus ”first to invent”) and who may file a “false marking” lawsuit. To read more about how the Act alters patent law, please click here to read the Bulletin published by the Intellectual Property Client Service Group on September 12, 2011.
FinCEN Issues Final Rule on Prepaid Access; Extends Compliance Date for Many Aspects of the Final Rule
New anti-money laundering regulations that directly impact retail business that issue or sell gift cards or other prepaid cards were issued by the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), The regulations require the collection and verification of customer information when certain prepaid cards are sold or reloaded. To read an overview of the Final Rule, please click here for the Alert published by the Financial Institutions Client Service Group on September 6, 2011. The Final Rule was set to go into effect on September 27, but FinCEN announced that it has extended the compliance date for most aspects of the regulations. For information on how the compliance dates changed, please click here to read the Alert published on September 12, 2011.
New Dual/Third Country National Rule Continues to Present Challenges
A new rule took effect in August which amended the International Traffic in Arms Regulations (ITAR) to include a new license exemption for the transfer of defense articles to dual/third country national employees of approved non-U.S. licensees under ITAR agreements. To read about the new rule, please click here for International Regulatory Bulletin published September 28, 2011.
DDTC Updates its “Guidelines for Preparing Electronic Agreements” to Implement New Dual/Third Country National Rule
In August, DDTC updated its “Guidelines for Preparing Electronic Agreements” (the “Guidelines”) to reflect implementation of the new rule and provide guidance to exporters preparing ITAR agreements. To learn more, please click here to read the International Regulatory Bulletin published September 28, 2011.
Electronic Payment of Registration Fees
The Directorate of Defense Trade Controls (DDTC) issued an amendment to the International Traffic in Arms Regulations (ITAR) that requires a change in the method of payment for registration fees. Effective September 26, 2011, all registration fees must be paid electronically via Automated Clearing House. To read about the amendment, please click here for the International Regulatory Bulletin published September 15, 2011.
French Working Time for Executives: Lump-Sum Remuneration Agreements Based on a Fixed Number of Working Days Per Year (so-called Forfaits-Jours)
The legal duration of work for employees in France is 35 hours per week, meaning that any hours required to be worked above this limit would normally be considered overtime. Executives are, however, most often not subject to this limit. For an outline of how the French Labor Code distinguishes between three types of executives, please click here to read the September 2011 Briefing published by the Paris Labor & Employment Client Service Group.
The Agency Workers Regulations 2010
UK’s new Agency Workers Regulations come into force on 1 October 2011. The regulations are intended to give agency workers the same basic employment rights and conditions as permanent staff employed directly by the relevant company. To learn about the new regulations, please click here for the September 2011 Briefing published by the London Labour and Employment Client Service Group.
China Announces Legal Changes That May Broaden Power to Investigate Bribery
In August the National People’s Congress of the People’s Republic of China released the draft Criminal Procedure Law Amendment to the public for comment. If passed, the amendment is expected to provide additional protection to the civil rights of accused parties. However, critics say that the amendment would also provide authorities legal cover to utilize secret locations to detain subjects suspected of engaging in acts involving national security, terrorism, or other serious crimes which may include serious bribery. To read about the amendment, please click here for the International Regulatory Bulletin published September 27, 2011.
U.S. Supreme Court Upholds Arizona’s Employment Verification Law
On May 26, 2011, the U.S. Supreme Court upheld the Arizona law that sanctions employers for hiring unauthorized aliens and endorsed Arizona’s requirement that employers use the federal E-Verify screening program. A 5-3 majority of the Court found that language in the Immigration Reform and Control Act of 1986 did not pre-empt the Arizona Law. For the answers to frequently asked questions about the Arizona law, please click here to read the Client Alert published by the Labor & Employment Client Service Group on August 4, 2011.
Employers Should Consider Expressly Prohibiting FMLA Fraud
Many employers have updated their FMLA policies to reflect recent amendments to the law and revisions to the regulations. Another aspect of an FMLA policy that merits attention is ensuring that the policy expressly prohibits FMLA fraud and specifies the penalty for the offense. The United States Court of Appeals for the Ninth Circuit issued an unpublished opinion earlier this year that reinforces the need for express fraud prohibition. To learn more about the implications of the opinion, please click here to read the Client Alert published by the Labor & Employment Client Service Group on August 19, 2011.
SEC Proxy Access Rule Vacated by Federal Court
The U.S. Court of Appeals for the District of Columbia Circuit recently set aside and vacated Exchange Act Rule 14a-11 concerning shareholder proxy access, adopted by the SEC on August 25, 2010. On a petition for review, a panel held that the SEC had “failed adequately to consider the rule’s effect upon efficiency, competition and capital formation,” as the SEC was required to do under its enabling statutes. Thus, the Court held that adoption of the Rule was “arbitrary and capricious” and vacated the Rule. To read more about the decision, please click here to read the Alert published by the Corporate Finance and Securities Client Service Group published August 4, 2011.
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Updated Claim Procedure Requirements for Non-Grandfathered Health Plans
The Internal Revenue Service, Department of Health and Human Services and Department of Labor have revised the interim final regulations governing internal claims and appeals and external reviews for non-grandfathered group health plans under the 2010 health reform law. The have also revised the forms for adverse benefit determinations and updated the list of state consumer assistance programs. Many of the changes ease the burden of plan administration. To learn more, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on July 1, 2011.
IRS Issues Guidance on Health Plan Excise Tax Returns, Code Section 162(m)
On June 24, 2011, the IRS finalized rules on automatic extensions for Form 8928 Excise Tax Returns for employer-sponsored health plans and also released guidance on performance-based compensation plans of public companies. For highlights of the rules, please click here to read the Alert published by the Employee Benefit & Executive Compensation Client Service Group on July 7, 2011.
FTC Suit Signals Increased Scrutiny of Advertising Endorsements
In May, the FTC brought suit against a company that sold a promissory note business system based upon the allegation that the company used consumer testimonials that could not be substantively substantiated, and that the company did not adequately disclose the typical performance that consumers were likely to achieve. This marks the thirteenth case this year in which the Commission has alleged that a company has deceptively used testimonials and endorsements. To read more, please click here for the Bulletin published by the Consumer Protection Group on July 5, 2011.
EPA Issues The Cross-State Air Pollution Rule To Reduce Power Plant Emissions In the Eastern United States
In July the U.S. Environmental Protection Agency (EPA) issued the Cross-State Air Pollution Rule (Cross-State Rule), requiring power plants in 27 states to reduce their emissions of nitrogen oxides and power plants in 23 of these states to also reduce their emissions of sulfur dioxide. The purpose of the rulemaking is to ratchet down power plant emissions that contribute to elevated concentrations of ozone in downwind states. For a summary of the relevant provisions of the Clean Air Act and the new Cross-State Rule, please click here to see the Bulletin published by the Environmental Client Service Group on July 22, 2011.
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The Implications for FCPA Enforcement of the SEC’s New Whistleblower Rules
The SEC’s recent adoption of rules to implement the whistleblower program mandated by the Dodd-Frank Act has particular significance for enforcement of the Foreign Corrupt Practices Act. For a discussion of the overall SEC enforcement context for the new whistleblower rules, a summary of the rules, and a discussion of the key issues for FCPA enforcement, including recommendations that companies should take now, please click here to read the Alert published by the Global Anti-Corruption Team of the Securities Litigation and Enforcement and International Trade Groups on June 22, 2011.
Supreme Court De-Certifies Largest Employment Discrimination Class Action In History
In Wal-Mart Stores, Inc. v. Dukes, the Supreme Court reversed a lower court’s decision to certify a nationwide class pursuing employment discrimination claims against the nation’s largest employer. A 5-4 majority of the Court concluded that the class of 1.5 million current and former female employees could not satisfy the commonality requirement. For a discussion of the decision, please click here to read the Alert published by the Class and Derivative Actions section of the Labor & Employment Client Service Group on June 21, 2011.
Supreme Court Draws Bright Line Barring Securities Fraud Claims Against Advisers to Companies Who Do Not “Make” Statements At Issue
In June the U.S. Supreme Court issued a significant decision restricting the ability of plaintiffs to bring securities fraud actions against adviser defendants who play a role in preparing statements actually made by companies they are advising. In Janus Group, et al. v. First Derivative Traders, the court held that an investment adviser to a mutual fund could not be sued in a private securities fraud action for false statements made in mutual fund prospectuses. To read more, please click here for the Alert published by the Securities Litigation and Enforcement practice group on June 16, 2011.
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Federal Judge in Missouri Dismisses Legal Challenge to Health Care Reform
The Judge in the U.S. District Court for the Eastern District of Missouri, Southeastern Division, entered an order dismissing a lawsuit filed by Lt. Gov. Peter Kinder that challenged the Patient Protection and Affordable Care Act. Kinder et al v. Geithner et al. was filed in July 2010 by Kinder, joined in by six other Missouri residents, as a private citizen after the state’s attorney general declined to join other states in challenging the health care law. To read more about the order in this case, please click here to see the Alert published by the Life Sciences and Health Care Client Service Group on May 3, 2011.
FTC Cracking Down on Affiliate Advertisers
In April the FTC filed 10 lawsuits against companies and individuals that run affiliate advertising websites. These lawsuits come within two months of an earlier round of lawsuits targeting affiliate advertising programs. The most recent targets are fake news websites that promote weight loss products. To learn more, please click here to read the Alert published by the Retail Team on May 5, 2011.
Arbitration Clauses May Waive Class Proceedings
The U.S. Supreme Court recently ruled that the Federal Arbitration Act does not allow state law to invalidate class action waivers in arbitration agreements on the basis of unconscionability. While AT&T Mobility v. Concepcion involved consumer claims, the language of the ruling will bolster enforceability of class action waivers in employment related arbitration agreements. To read more about the ruling, click here for the Alert published by the Labor & Employment Client Service Group on May 18, 2011.
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W-2 Reporting of Employer-Provided Health Care Costs
The 2010 health care reform legislation included an obligation for employers to inform employees of the cost of their health coverage. The IRS has now issued Notice 2011-28, which provides interim guidance for employers on W-2 reporting of the cost of coverage. For more information, please click here to read the Alert regarding the Notice published by the Employee Benefits & Executive Compensation Client Service Group on April 5, 2011.
Form I-9: Changes to Accepted Documentation
As of May 16, 2011, the documents employees present to employers for I-9 verification are subject to new regulations. The U.S. Citizenship and Immigration Services of the Department of Homeland Security has issued a final rule concerning the list of acceptable documentation. To learn more about the changes in acceptable documentation, please click here to read the Alert published by the Labor & Employment Client Service Group on April 27, 2011.
Reminder for Plan Administrators to Review Confidentiality Procedures for Qualified Retirement Plans
Plan administrators of plans that offer employer stock as an investment alternative should review the disclosures provided to plan participants. Investment in employer stock represents a significant litigation threat for plan fiduciaries. However, the plan fiduciary may be relieved of liability for participant losses resulting from the decision to invest in employer stock if certain disclosures are provided under ERISA Section 404(c). To learn more, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on April 12, 2011.
Pension Plan Reporting of Foreign Bank and Financial Accounts
Representatives of pension plans with interests in foreign financial accounts may be required to report those accounts to the Internal Revenue Service. On February 24, 2011 the Treasury Department issued final regulations greatly expanding the reporting requirements for individuals and entities that hold interests in foreign accounts. To learn more about the regulations, please click here to read the Alert published April 12, 2011 by the Employee Benefits & Executive Compensation Client Service Group.