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californiacorporate&securities 11/21/2014
Do Some Companies Already Have Fee-Shifting Provisions (And Not Know It)?

A lot of folks these days are arguing and writing about fee-shifting bylaws as if they were some kind of novel and sudden irruption, like Athena bursting from Zeus’ skull.  This overlooks the existence of fee-shifting provisions in a myriad of existing contracts.  Arguably, some of these provisions may already applicable to derivative plaintiffs. When it comes to attorney’s fees, California follows (not surprisingly) […]

The post Do Some Companies Already Have Fee-Shifting Provisions (And Not Know It)? appeared first on California Corporate & Securities Law.

 
Social Media & Employment Law Blog for California Employers 11/19/2014
Ohio Court Holds Employer’s Decision to Request Medical Evaluations Based on Employee’s Disturbing Social Media Posts Was Appropriate

The Court of Appeals of Ohio recently upheld a trial court’s determination that the Ohio Department of Rehabilitation and Correction (“Department”) properly ordered an independent medical examination of, and ultimately terminated, an employee who posted threatening messages on Facebook and Yahoo! Messenger. In 2009, Diedree Ames, a parole officer, started exhibiting erratic behavior in the workplace. The situation became particularly serious […]

The post Ohio Court Holds Employer’s Decision to Request Medical Evaluations Based on Employee’s Disturbing Social Media Posts Was Appropriate appeared first on Social Media and Employment Law.

 
californiacorporate&securities 11/12/2014
Nevada’s Duty Of Care Standard Fails To Win Summary Judgment For Director

NRS 78.138(1) imposes two explicit duties on directors in the exercise of their powers: they must act in good faith and with a view to the interests of the corporation.  This contrasts with Delaware case law which speaks of a triad of duties comprised of care, loyalty and good faith, with good faith standing a bit below the duties of care […]

The post Nevada’s Duty Of Care Standard Fails To Win Summary Judgment For Director appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 11/11/2014
In Flanders Field . . .

Today is Veterans Day.  The date commemorates the ending of the First World War on November 11, 1918 at 11:00 a.m.  The following year, President Woodrow Wilson proclaimed the first “Armistice Day”, as it was then known: “To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in […]

The post In Flanders Field . . . appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 11/10/2014
All Shares Are Equal But With Proxy Access Some Shares Are More Equal Than Others

In George Orwell’s famous satire of Stalin’s Soviet Union, Animal Farm, the animals started out with seven commandments.  The seventh commandment was “All Animals Are Equal”.  As time passed, three of the original commandments were modified and eventually the seven commandments were whittled down to just one: “My sight is failing,” she [Clover, a mare] said finally. “Even when I was young I […]

The post All Shares Are Equal But With Proxy Access Some Shares Are More Equal Than Others appeared first on California Corporate & Securities Law.

 
Social Media & Employment Law Blog for California Employers 11/5/2014
NLRB Upholds Employer’s Withdrawal of Rehire Offers to Employees Based on Employees’ Facebook Conversation Regarding Their Plans To Engage in Insubordinate Behavior

The NLRB, in a rare decision related to social media use that employers will like, recently upheld an employer’s withdrawal of the rehire offers of two employees based solely on a Facebook exchange, finding that the exchange was not protected under the National Labor Relations Act because it exhibited the employees’ “planned insubordination in specific detail.” The employer in this case […]

The post NLRB Upholds Employer’s Withdrawal of Rehire Offers to Employees Based on Employees’ Facebook Conversation Regarding Their Plans To Engage in Insubordinate Behavior appeared first on Social Media and Employment Law.

 
11/4/2014
Shirtless Pictures Posted By Chili’s Cook Prompt News Investigation and Surprise Health Inspection

A story out of Florida highlights how an employee’s social media posts can spell trouble for an employer. A cook at a Chili’s restaurant in Valrico, Florida, posted shirtless pictures of himself in the Chili’s kitchen, and provided enough information to identify the restaurant location. The local ABC affiliate sent the photos to the state health inspector, which then turned […]

The post Shirtless Pictures Posted By Chili’s Cook Prompt News Investigation and Surprise Health Inspection appeared first on Social Media and Employment Law.

 
californiacorporate&securities 11/4/2014
A Jury Summons Evokes Thoughts Of Pericles, Wasps And Aristotle

Recently, I received a summons for jury service. This reminded me of Pericles, Wasps and Aristotle. I am reminded of Pericles because he  is credited with introducing pay for jury service in the mid-fifth century B.C.E.  Athenian jurors initially received two obols per day.   An obol (ὀβολός ) was worth 1/6 of a drachma, which was about one day’s pay. […]

The post A Jury Summons Evokes Thoughts Of Pericles, Wasps And Aristotle appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 11/2/2014
Court Finds Use Of “P” Word Does Not Necessarily A Partnership Make

Last March, I wrote a couple of posts concerning the Nevada Supreme Court’s opinion in In re Cay Clubs, 130 Nev. Adv. 14 (2014).  Joint Venturer May Be Partner By Estoppel and “Don’t tell me not to worry, and please don’t call me partner”.  The opinion was concerning because the Court had found that statements in marketing materials referring to a “partnership […]

The post Court Finds Use Of “P” Word Does Not Necessarily A Partnership Make appeared first on California Corporate & Securities Law.

 
10/31/2014
Uber’s Decision To “Deactivate” Driver Over Retweet of Article Goes Viral in Minutes

It all started with a retweet. A recent story regarding the “deactivation” and subsequent reinstatement of an Uber driver in Albuquerque is a useful reminder for employers that, given the widespread use by employees of social media, employment decisions should not only be well thought out, but also should take into account potential negative publicity. During a period while he […]

The post Uber’s Decision To “Deactivate” Driver Over Retweet of Article Goes Viral in Minutes appeared first on Social Media and Employment Law.

 
californiacorporate&securities 10/31/2014
The Academy Loves Nevada Corporate Law!

The incognoscenti may not know it, but today is Nevada Day.  On this date in 1864, Nevada joined the Union and helped support the reelection of Abraham Lincoln and the Thirteenth Amendment.  Delaware did not – it joined New Jersey and Kentucky in casting its electoral votes for General George McClellan.  See Lincoln (The Movie) Overlooks Nevada Steven Spielberg may have […]

The post The Academy Loves Nevada Corporate Law! appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/30/2014
Political Spending Disclosures – An Idea So Good That I Think You Should Pay For It

In July 2011, a group of ten law professors filed a rulemaking petition with the Securities and Exchange Commission seeking adoption of a rule requiring disclosure of political spending by publicly traded companies.  In a post last month, two of the original petitioners, Harvard Law School Professor Lucian Bebchuk and Columbia Law School Professor Robert J. Jackson, Jr., reported that their […]

The post Political Spending Disclosures – An Idea So Good That I Think You Should Pay For It appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/29/2014
Who Is Adolf Berle, Jr. And Why Is Vice Chancellor Laster Quoting Him?

Adolf A. Berle, Jr. wrote Corporate Powers as Powers in Trust more than four score years ago, but Vice Chancellor J. Travis Laster cited the article yesterday as if the Harvard Law Review had published it last week. Quadrant Structured Products Co., Ltd. v. Vertin (C.A. No. 6990-VCL) (Oct. 28, 2014).  Here’s the quotation from Berle: in every case, corporate action must be twice tested: […]

The post Who Is Adolf Berle, Jr. And Why Is Vice Chancellor Laster Quoting Him? appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/27/2014
Should The SEC Ask What Would Blackstone Do?

The Securities and Exchange Commission recently trumpeted its enforcement successes for its 2014 fiscal year.  For an agency dedicated to full disclosure, there were some notable omissions, including: A California federal jury verdict finding the former Chief Executive Officer of STEC, Inc. innocent of insider trading; A New York federal jury verdict finding hedge fund manager Nelson Obus and his […]

The post Should The SEC Ask What Would Blackstone Do? appeared first on California Corporate & Securities Law.

 
10/23/2014
Class Action Suit Alleges LinkedIn Violated FCRA By Providing Employers With Reference Reports

Another interesting case filed in California recently highlights the myriad risks employers face when using social media as part of their hiring process. A class action lawsuit was filed in the Central District of California against LinkedIn based on allegations that the reference reports LinkedIn generates for premium subscribers, including many employers, violate the Fair Credit Reporting Act (“FCRA”). According […]

The post Class Action Suit Alleges LinkedIn Violated FCRA By Providing Employers With Reference Reports appeared first on Social Media and Employment Law.

 
californiacorporate&securities 10/23/2014
If Bylaws Are Contracts, Where’s The Boilerplate?

Bylaws hardly constitute literature.  For the most part, they simply regurgitate the applicable general corporation law with a few permitted changes here and there.  In general, there seems to be two schools of thought when it comes drafting bylaws.  Advocates of the long-form approach claim, with justification, that it is easier to consult the bylaws than the statute.  Champions of […]

The post If Bylaws Are Contracts, Where’s The Boilerplate? appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/22/2014
Can An Employment Agreement Be A Wee Bit Too Integrated?

The Bylaws of many public companies provide for mandatory indemnification of directors and officers (and sometimes other agents as well).  Often, Bylaws describe these indemnity obligations as contract rights.  For example the Bylaws of one well-known public company state: The right to indemnification conferred in this Article shall be a contract right. If Bylaws are contracts, it may be worth […]

The post Can An Employment Agreement Be A Wee Bit Too Integrated? appeared first on California Corporate & Securities Law.

 
10/17/2014
Can the Business-Related Contacts On An Employee’s LinkedIn Page Be Considered Trade Secrets?

A court in the Central District of California recently confronted the interesting issue of whether an employee’s LinkedIn contacts can be considered an employer’s trade secrets, such that the employee could be liable for misappropriation by retaining and using the LinkedIn account after leaving his employment. In Cellular Accessories for Less, Inc. v. Trinitas LLC, an employee was sued by […]

The post Can the Business-Related Contacts On An Employee’s LinkedIn Page Be Considered Trade Secrets? appeared first on Social Media and Employment Law.

 
californiacorporate&securities 10/13/2014
SEC ALJs Face Free Enterprise Challenge

Several years ago, I testified as an expert witness in an administrative proceeding brought by the Securities and Exchange Commission.  The hearing was held in what looked like a courtroom before what appeared to be a judge and with lawyers for the SEC and the respondent.  However, the presiding officer was not an Article III judge and his decision was […]

The post SEC ALJs Face Free Enterprise Challenge appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/10/2014
Is A “Rule” An “Order” And Why Would Anyone Care?

Pay-to-Play Rule Challenged Doug Cornelius recently wrote about the dismissal of a lawsuit challenging the Securities and Exchange Commission’s anti “pay-to-play” rule under the Investment Advisers Act of 1940.  New York Republican State Comm. v. SEC, 2014 U.S. Dist. LEXIS 138964 (D.D.C. Sept. 30, 2014).  In a nutshell, the rule (206(4)-5) prohibits federally registered and certain other investment advisers from […]

The post Is A “Rule” An “Order” And Why Would Anyone Care? appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/9/2014
Why Does Determining A Quorum Have To Be So Complicated?

California’s quorum requirement for meetings of directors appears on its face to be straightforward – a majority of the authorized number of directors constitutes a quorum of the board for the transaction of business.  Cal. Corp. Code § 307(a)(7).  Leaving aside the possibility of an exception in the articles or bylaws (a subject for another post), it’s hard to imagine that […]

The post Why Does Determining A Quorum Have To Be So Complicated? appeared first on California Corporate & Securities Law.

 
californiacorporate&securities 10/8/2014
Court Of Appeal Embraces De Facto LLC Dissolution

Under the former Beverly-Killea Limited Liability Company Act, a limited liability company was dissolved upon the first to occur of any of the following three events: The occurrence of an event specified in its governing documents; A majority vote of the members to dissolve; or A judicial decree of dissolution. Cal. Corp. Code § 17350 (repealed).  The California Revised Uniform Limited […]

The post Court Of Appeal Embraces De Facto LLC Dissolution appeared first on California Corporate & Securities Law.

 
10/7/2014
BET Prevails in Dispute With Former Worker Over Facebook Account

A recent case from the District of Southern Florida highlights the importance of clearly defined guidelines for workers or employees managing the employers’ social media accounts. Mattocks v. Black Entm’t Tv LLC, concerned a dispute between Black Entertainment Television LLC (“BET”) and Mattocks, whom it had hired to manage a Facebook Fan Page for one of its television programs, “The […]

The post BET Prevails in Dispute With Former Worker Over Facebook Account appeared first on Social Media and Employment Law.

 
californiacorporate&securities 10/7/2014
Imposing The Corporate Death Penalty

In this post published yesterday, UCLA Law Professor Stephen Bainbridge challenges the following statements attributed to Robert F. Kennedy Jr.: I do, however, believe that corporations which deliberately, purposefully, maliciously and systematically sponsor climate lies should be given the death penalty.  This can be accomplished through an existing legal proceeding known as “charter revocation.”  State Attorneys General can invoke this remedy […]

The post Imposing The Corporate Death Penalty appeared first on California Corporate & Securities Law.

 
10/6/2014
Legend Removal Requires Proper “Request To Register Transfer”

Removal of legends from restricted securities (i.e., securities issued without registration under the Securities Act of 1933) can be a tricky business for transfer agents, issuers and their counsel.  Improperly removing legends can get them in hot water with the Securities and Exchange Commission.  See, e.g., Holladay Stock Transfer, Inc. and Sharon M. Owens, Securities and Exchange Act Release No. 39797 (March 25, […]

The post Legend Removal Requires Proper “Request To Register Transfer” appeared first on California Corporate & Securities Law.

 
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