Client service groups throughout Bryan Cave LLP often prepare alerts on issues of interest to our clients and friends. Listed below are the client alerts published in January, 2014. Please click on the title to read the full text of the Alert.
Qualified Plan Limits, published by Employee Benefits and Executive Compensation, January 21, 2014
Federal Trade Commission Increases Interlocking Directorates Thresholds, published by Antitrust and Competition, January 24, 2014
Eleventh Circuit Holds that Affiliates of Indicted Contractor May Be Suspended from Government Contracting Indefinitely, Despite No Wrongdoing, published by Government Contracts, January 3, 2014
Tax Court Upholds Captive Insurance Arrangement Despite Parent Guarantee and Captive’s Investment in Stock of Parent, published by Tax Advice and Controversy, January 16, 2014
Investment Funds Maintained by Charitable Organizations, published by the Fund Formation Team and Tax Exempt and Charitable Planning, January 7, 2014
Circuit Decision Requires Production of Foreign Bank Account Records, Thus Emphasizing Importance of IRS Amnesty Program, published by Tax Advice and Controversy and White Collar Defense and Investigations, January 9, 2014
SEC ALJ Imposes Six Month Bar on China Affiliates of Big Four Accounting Firms, published by White Collar Defense and Investigations and International Trade, January 24, 2014
Premerger Notification Thresholds Increased, published by Antitrust and Competition, January 24, 2014
EPA Adopts New ASTM Phase I Standard, published by the Environmental group, January 15, 2014
While Some Things Changed, Much Stays the Same as the EU and the United States Relax Sanctions Against Iran (IRB No. 517), published by International Trade, January 28, 2014
SCOTUS Limits the Exercise of General Personal Jurisdiction Over Multi-National Parent Corporations: Daimler AG v. Bauman, published by Commercial Litigation, January 29, 2014
SEPA — Is There Some Respite for European and US Companies?, published by Financial Services, January 13, 2014
Overhaul of the BIS Unverified List Imposes New Requirements for Exporters (IRB No. 516), published by International Trade, January 21, 2014
UK Labor and Employment Law Bulletin – January 2014, published by Labor and Employment, January 23, 2014
Lokpal: Finally a force to combat corruption in India, published by the India Practice Group, January 8, 2014
Health Care Reform: Guidance on Play or Pay and 90-Day Waiting Period
On August 31, 2012, the Departments of Labor, Treasury, and Health and Human Services jointly issued temporary guidance on two related health care reform issues: (i) determining full-time status of employees for purposes of the employer “play or pay” penalty and (ii) implementation of the 90-day maximum waiting period adjustment. As the two pieces of guidance refer to one another, it is important to understand them both. To learn more about the guidance issued on these two health care reform issues, please click here to read the Alert published by the Employee Benefits and Executive Compensation Client Service Group on September 24, 2012.
U.S. Army Solicits $7 Billion in Renewable Energy Contracts
The US Army Engineering and Support Center is accepting bids for new renewable and alternative energy projects to provide electrical utility services to sites under the jurisdiction of the Department of Defense across the continental United States. Up to $7 billion will be available over the course of 10 years to purchase energy produced by renewable and alternative projects to help the Department meet its mandate to produce or procure at least 25% of its total facility energy needs by the year 2025. To learn more about the bidding process, please click here to read the Alert published by the Energy and National Resources Client Service Group on September 7, 2012.
With Recent Changes Issued by the CFPB, Final Remittance Transfer Regulations to Become Effective February 7, 2013
One provision of Dodd-Frank that generated comparatively little concern when it was passed was section 1073, “Remittance Transfers.” Closer examination and subsequent issuance of regulations has now drawn scrutiny to this provision, which was already so detailed and lengthy when it was inserted into the Act that there was little room for modification by the CFPB when the bureau issued its implementing regulations. To learn more about the provision and how to comply in time for the February 7, 2013 effective date, please click here to read the Alert published by the Financial Institutions Client Service Group on September 19, 2012.
Comments on the “Effects of Foreign Policy-Based Export Controls” submitted September 21, 2012
To read the comments submitted by Stanley J. Marcuss and George F. Murphy of the International Trade Group on the foreign policy export controls maintained by the Bureau of Industry and Security, please click here.
A New Law on Sexual Harassment in France
Since the initial enactment of anti-sexual harassment legislation in France in 1992, sexual harassment was not only prohibited under the French Labor Code but was also a punishable offense under the Penal Code. However, the definitions in the Labor Code and Penal Code were both vague and not entirely in sync, and the French Constitutional Counsel ruled them unconstitutional in May of this year. In order that sexual harassment “not go unpunished,” the French Parliament has adopted a new law. To read more, please click here for the Briefing published by the Labor and Employment Client Service Group (Paris) on September 24, 2012.
German Labor Law & HR 2/2012
For a discussion of the “Revolving Door Clause” included in the German Temporary Employment Act governing the use of employing temporary workers, please click here to read the Newsletter published by the Labor and Employment Client Service Group (Hamburg) on September 25, 2012.
SEC Issues Final “Conflict Minerals” Rule
The SEC has issued its final rule to implement the “conflict minerals” disclosure requirements in Dodd-Frank. The SEC originally issued proposed rules with a comment period that was to have ended in January 2011. Final rules were required to be published by April of 2011. The SEC formally extended the public comment period by 30 days and then spent nearly 17 months receiving thousands of letters, meeting with many “interested persons,” and hosting an SEC Roundtable. Dodd Frank amended the SEC Exchange Act of 1934 by adding a requirement that the SEC publish disclosure rules concerning the use of certain minerals that originate in the Democratic Republic of the Congo. To learn more about the disclosures required by the rule, please click here to read the Bulletin published by the Corporate Finance and Securities Client Service Group on August 29, 2012.
The Contraceptive Mandate: What Do Religious Employers Do Now?
In a landmark 5-4 decision announced in June, the United States Supreme Court upheld the key provisions of the Patient Protection and Affordable Care Act (ACA). Perhaps most noteworthy for religious employers are the provisions requiring group health plans to provide preventive health services without charging a co-pay. In August, the Department of Health and Human Resources (HHS) adopted guidelines outlining the required preventive health care for women. That guidance requires coverage for all FDA-approved contraceptive services, including the “morning after” pill and the “week after” pill. Coverage of these services at no cost is required for plan years beginning on or after August 1, 2012. To learn more about the decision and exemptions for certain employers, please click here to read the Alert published by the Religious Organization Team on August 7, 2012.
Two Key Rulings of the Supreme Court
A “Common Sense” Approach to Overtime Exemptions. The Supreme Court’s recent ruling in Christopher v. SmithKline Beecham Corp., DBA GlaxoSmithKline established that when classifying employees as exempt or nonexempt under the Fair Labor Standards Act, employers should not abandon common sense and industry practice. The Christopher case puts the Department of Labor and potential plaintiffs on notice that unreasoned and overly narrow interpretations of the exemptions should be rejected by courts, especially when such interpretations would subject business to unfair surprise.
Supreme Court Strikes Down Much of Arizona Immigration Law. Arizona enacted the Support our Law Enforcement and Safe Neighborhoods Act in 2010 in an attempt to address immigration concerns within its borders. In a 5-3 decision, the Supreme Court struck down a significant part of the Arizona law.
For summaries of these two important rulings of the Supreme Court, please click here for the Labor and Employment Client Service Group’s Alert published July 16, 201.
New York Appeals Court Decision Highlights Defenses for Financial Institution Defendants Against Structured Product Claims.
A recent decision from the New York Court of Appeals highlights some of the winning arguments financial-institution defendants can make in state-court litigation brought by investors in structured financial products. In Oddo Asset Management v. Barclays Bank PLC, the Court of Appeals affirmed the dismission of claims for aiding and abetting breach of fiduciary duty and tortious interference with contract. Although the Court did not define any new legal principles, its decision illustrates the ways existing law can be applied to defeat claims against defendants alleged to have played an important role in the distribution of failed investments. To learn more about the decision in this case, please click here to read the Securities Litigation and Enforcement Client Service Group’s Alert published July 9, 2012.
Employee Testimonials Can be Risky Business
Online retailers often permit (and encourage) consumers to review their products. Reviews — whether done on the retailer’s website or on a third-party website — serve a dual purpose of engaging consumers to interact with the retailer and providing a ready source of testimonials that can be used in future marketing. Over the past several years the FTC has warned that consumers can be deceived when a testimonial is written by a person that has a material connection with the retailer. The FTC has launched at least a half-dozen investigations involving deceptive testimonials, and, in early July, the FTC announced its largest testimonial related settlement to date — $800,000. To read more about how retailers can avoid liability, please click here to read the Alert published by the Retailer & Consumer Products Group on July 10, 2012.
What do video game, music, and free online telephone networks have in common? If your employees use them they can lead to a FTC data security investigation.
Although the days of Napster and Gnutella may be over, the technology upon which those applications were based — peer-to-peer networks or “P2P” — is alive and well in modern-day programs that share video games and music. As two recent Federal Trade Commission enforcement actions illustrate, companies that permit employees to use P2P applications — either knowingly or unknowingly — may face government investigations and possible liability. To learn more, please click here to read the Bulletin published by the Data Privacy & Security Team on June 19, 2012.
FTC Cracks down on the Collection of Social Media Data For Employment Decisions
A survey released this year indicates that in some industries almost 40% of employers reviewed job candidates’ profiles on social media sites before making employment decisions. Ordering a candidate’s social media history is, in many companies, becoming as routine as ordering a credit report or background check. Most employers do not realize, however, that the Federal Trade Commission has taken the position that social media reports share something else with credit reports — they are covered under the privacy protections of the Fair Credit Reporting Act. In June the FTC filed a lawsuit in the Central District of California against a company which marketed social media reports to employers to use as “a factor in deciding whether to interview a job candidate or whether to hire a job candidate after a job interview.” To read more, please click here to read the Bulletin published by the Data Privacy & Security Team on June 14, 2012.
Record Settlement in a Sanctions Case Reached by ING Bank, N.V.
On June 12, 2012, ING Bank, N.V. settled alleged violations of U.S. trade sanctions with the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) for a record $619 million penalty. ING Bank’s violations of OFAC sanctions involved more than $1.6 billion worth of funds that were unlawfully routed through the United States despite U.S. sanctions. To learn more about the allegations against ING Bank and the Settlement Agreement reached, please click here for the International Regulatory Bulletin No. 497 published June 13, 2012 by the International Trade Group.
Oil and Natural Gas Production Subject to New Air Rules
On April 17, 2012, the EPA issued new rules targeting potential emissions associated with hydraulically fractured wells. Other activities at upstream and midstream facilities are also impacted by the new rules. To learn more about the new requirements to reduce emissions from the oil and natural gas production sector, please click here to read the Alert published by the Environmental and Energy and Natural Resources Client Service Group on May 1, 2012.
Medical Marijuana: Arizona Law and the Americans with Disabilities Act
While employers have implemented policies to comply with Arizona’s medical marijuana laws, the federal Ninth Circuit Court of Appeals has issued a ruling that could exclude employees who use medical marijuana from protection under the Americans with Disabilities Act. To read more about the ruling and the context of the issue considered by the Court, please click here to read the Alert published by the Labor and Employment Client Service Group on May 30, 2012.
Department of Labor Issues Further Fee Disclosure Guidance
On May 7, 2012, the Department of Labor issued Field Assistance Bulletin 2012-02, consisting of 38 questions and answers that clarify some of the issues raised since the issuance of final regulations on participant fee disclosures with respect to designated investment alternatives in individual account plans. For a discussion of the issues covered, please click here to read the alert published by the Employee Benefits and Executive Compensation Client Service Group on May 29, 2012.
California Supreme Court Attempts to Clarify Entitlement to Attorneys’ Fees in Wage and Hour Claims
On April 30, 2012, the California Supreme Court issued its ruling in Kirby v. Imroos Fire Protection, a wage and hour matter that had been making its way through the court system since 2007. In the ruling, the Court attempted to clarify and limit a prevailing party’s entitlement to attorneys’ fees for bringing certain types of wage and hour claims; however, its failure to address a glaring inconsistency with another law essentially nullifies the holding. To read more about the ruling and how it further muddies the waters as to whether any party will receive fees for break claims, please click here for the Alert published by the Labor and Employment Client Service Group on May 8, 20012. (more…)
IRS Releases Proposed Rules on New Comparative Effectiveness Fee for Health Plans
On April 12, 2012 the IRS released proposed regulations regarding the collection of the fee for the Patient-Centered Outcomes Research Trust Fund (the “Fund”) under the Patient Protection and Affordable Care Act. The Fund will be used to pay for the Patient-Centered Outcomes Research Institute which has the goal of helping health care providers and consumers make informed health decisions by synthesizing research comparing the outcome effectiveness of various treatments. To learn more about proposed regulations, the plans that will be impacted and the fee, please click here to read the Alert published by the Employee Benefits and Executive Compensation Client Service Group on April 23, 2012.
The Absolute Priority Rule: An Endangered Species in Individual Chapter 11 Cases?
The absolute priority rule of Section 1129(b) of the Bankruptcy Code is a fundamental creditor protection in a Chapter 11 bankruptcy case. The rule implements the general state-law principle that creditors are entitled to payment before shareholders unless creditors agree to a different result. Recent litigation has raised the issue of whether the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which otherwise is a very creditor-friendly statute, modified the Bankruptcy Code in such a way as to eliminate the absolute priority rule if the debtor is an individual. For a discussion of the issue, please click here to read the Alert published by the Bankruptcy, Restructuring and Creditors’ Rights Client Service Group on April 9, 2012.
Estate Planning in 2012
Generally, there are three basic goals of estate, generation skipping transfer and gift tax planning: (1) the reduction of estate and gift taxes upon transfer; (2) the deferral of the estate, generation skipping transfer and gift tax burden; and (3) ensuring for the necessary liquidity to pay the taxes when they become due. As a result of the present low interest rates and the drop in value of most types of assets, there may be opportunities to engage in some estate planning that may not be available to clients when interest rates rise and values are driven higher. To learn about how to take advantage of these opportunities in 2012, while we are sure we have them, please click here to read a memorandum published by Bryan Cave’s Private Client Group on April 10, 2012.
Data Breaches: Will You Be Sued, And Can You Lower Risk?
According to a widely reported study, 90% of organizations have had at least one data breach in the last year and almost 60% had two or more breaches over the year. In light of headlines describing multimillion-dollar data security breach settlements, it is no surprise that businesses fear the worst. For a discussion of the litigation risks, range of liability and how businesses can lower the risks associated with security breaches, please click here to read an article written by the Data Privacy and Security Team attorneys and published in Law 360 on April 25, 2012.
9th Circuit Holds TILA Bars Rescission Suits Filed More Than 3 Years After Consummation
In McOmie-Gray v. Bank of America (9th Cir. Feb. 8, 2012), the Ninth Circuit Court of Appeals held that under the Truth in Lending Act (“TILA”), “rescission suits must be brought within three years from consummation of the loan, regardless whether notice of rescission is delivered within that three-year period.” It ruled that the three year period in the Act is an absolute limitation on rescission actions and that the one year period for bringing claims applies only to damages actions and does not extend the time to file a claim for rescission even where the borrower has sent the Bank a written notice of rescission within three years of loan signing or “consummation.” To learn more about the facts in this case and the Court’s decision, please click here to read the Alert published by the Commercial Litigation Client Service Group and the Financial Institutions Client Service Group on March 6, 2012.
How Long Should You Retain Data? Recent Developments May Add Confusion Not Clarity
Businesses have always collected information about their customers, but with the explosion of on-line commerce the quantity of information collected has ballooned. One question that necessarily arises for almost any business is deciding how long it will keep the data it collects. Businesses are aware that future developments in technology will improve the usefulness (and value) of the data that is currently in their possession. Retaining consumer data, however, raises a number of legal risks which are often difficult to quantify in light of the changing regulatory and litigation landscape. For a discussion of how recent developments add to the legal complexity, please click here to read the Bulletin published by the Data Privacy & Security Team on March 16, 2012.
Supreme Court Weakens EPA’s Enforcement Regine
The United States Supreme Court handed landowners a major victory against the United States Environmental Protection Agency (EPA) in its unanimous decision in Sackett v. EPA, No. 10-1062. The decision announced March 21, 2012, held that Clean Water Act compliance orders can be challenged in court under the Administrative Procedures, undercutting EPA’s historic practice of using compliance orders to, in the words of the Court, “strong-arm” parties into voluntary compliance. To learn about the case and the Court’s decision, please click here to read the Alert published by the Environmental Client Service Group on March 22, 2012.
FINRA Issues Guidance on Protection of Customer Accounts
A recent alert from the Financial Industry Regulatory Authority (“FINRA”) is encouraging broker-dealers to reexamine their policies and procedures relating to protection of customer assets and accounts. FINRA Regulatory Notice 12-05 advises broker-dealers that FINRA has received an increasing number of reports of customer funds being stolen as a result of instructions e-mailed to firms from customer e-mail accounts that have been compromised. With that notice, FINRA also issued an Investor Alert advising the public about the reported incidents. To learn more about the Notice and Alert, please click here to read the Alert published by the White Collar Defense & Investigations and Securities Litigation & Enforcement Client Service Groups and Data Privacy & Security Team on February 6, 2012.
Reporting Cybersecurity Risks — New Obligations for Publicly Traded Companies
Most companies are aware that they may be required to report data security breaches to consumers and, in some instances, state attorneys general, the FTC, or HHS. Publicly traded companies should bear in mind that they have to notify another group — their investors. The SEC last year offered first-of-its kind guidance on when companies should report cybersecurity incidents in their disclosure statements. To learn more about the new requirements, please click here to read the Alert published by the Data Privacy & Security Team on February 14, 2012.
DOL Issues Final Fee Disclosure Rule
Earlier this year, the Department of Labor issued a final rule on the disclosure requirements for a contract or arrangement for services to a covered plan to be deemed “reasonable” under Section 408(b)(2) of the Employee Retirement Income Security Act of 1973 (“ERISA”). These disclosure requirements become effective July 1, 2012 and apply to service contracts and arrangements entered into both before and after that date. To learn more about the disclosures required and what plans or contracts may be excluded from the rule, please Click here to read the Alert published by the Employee Benefits and Executive Compensation Client Service Group on February 7, 2012.
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…)