On Tuesday, another New York federal district court ruled that an employee need not report a disclosure directly to the Securities and Exchange Commission (“SEC”) to be afforded the protections under the anti-retaliation provisions of the Dodd-Frank Act, but that internal disclosures within a company are covered. Read More
Mike Delikat, a partner in the New York office, serves as Chair of Orrick's Global Employment Law Practice and previously served as the Managing Director of Orrick's Litigation Division.
He represents a broad range of major corporations in all facets of labor and employment law. Mr. Delikat has an active trial, arbitration and appellate practice and handles a number of high-visibility class action and impact cases. Mr. Delikat has extensive experience with issues arising from trade secret misappropriation and the enforcement of post-employment restrictions, wage-and-hour collective actions and other class actions based on gender and race, with particular expertise representing companies in the financial services industry. He is also called upon by a number of major corporations to handle high exposure internal investigations.
He currently has an active practice representing a number of major corporations in the defense of Sarbanes-Oxley Act and other whistleblower claims and is the author of the first treatise published on this subject (see below in Publications).
- AllianceBernstein: Mr. Delikat has represented this client on multiple matters in court and in arbitration.
- Facebook: Mr. Delikat leads a global team that represents Facebook on all of its employment law matters throughout the world.
- PG&E Corporation: Mr. Delikat obtained a complete defense verdict in a jury trial brought in the Maryland state court seeking to hold PG&E liable for multi-million dollar bonuses claimed by energy traders.
- JP Morgan Chase: Mr. Delikat has represented this client on a variety of employment litigation matters including the enforcement of post-employment restrictions involving litigation in the United States and the United Kingdom.
- Carrols Corporation: Mr. Delikat successfully represented Carrols Corporation, the largest holder of Burger King franchises, in obtaining summary judgment against the EEOC after six years of litigation in the largest pattern and practice class action for sexual harassment ever brought by the EEOC in EEOC v. Carrols.
- Securities Industry and Financial Markets Association: This client regularly looks to Mr. Delikat for representation in filing amicus briefs on issues of paramount importance to SIFMA and its members.
- AIG Corporation: The Board of Directors of this company retained Mr. Delikat to conduct a high profile internal investigation of one of its senior executives.
- Wyeth/Pfizer: Mr. Delikat successfully defended Wyeth in a two-week jury trial in federal court alleging race discrimination at its Pearl River facility. He also represented this client on several Sarbanes-Oxley whistleblower matters, including Livingston v. Wyeth, which was the first U.S. Court of Appeals decision on what constitutes protected activity under the whistleblower provisions of SOX.
- Oracle: Mr. Delikat represented Oracle in multiple litigations, including a preliminary injunction trial involving efforts by a competitor to its enforce non-compete agreements.
- Roche: Mr. Delikat successfully represented Roche in several wage-and-hour collective actions which challenged the classification of pharmaceutical representatives as exempt from the overtime provisions of the Fair Labor Standards Act.
- Moody’s Investors Service: Mr. Delikat defended Moody’s in a 400-plaintiff Title VII class action in the Southern District of New York alleging race and national origin discrimination in promotion.
- Major Law Firm Representation: Mr. Delikat represents a number of major law firms on a variety of matters relating to their partners, associates and staff.
Mr. Delikat is published and quoted frequently on a variety of employment law issues in major academic and business publications and is a frequent speaker at national and international programs.
On December 28, 2012, President Obama signed into law the Theft of Trade Secrets Clarification Act. The Act amends the Economic Espionage Act of 1996 (EEA) and expands the jurisdiction of federal courts over cases concerning misappropriation of trade secrets. It was enacted in response to a recent Second Circuit decision that arguably narrowed the jurisdictional scope of the Economic Espionage Act of 1996.
The passage of the EEA (18 U.S.C. §§ 1831-39) marked the first major federal legislation aimed specifically at granting federal courts jurisdiction over claims of trade secret misappropriation. With the enactment of the EEA, Congress gave federal prosecutors a vehicle to bring criminal charges against individuals who knowingly misappropriate trade secrets. 18 U.S.C. § 1832(a). The EEA also provided the federal government the ability to seek injunctive relief for trade secret theft in a civil action under the statute. Id. § 1836.
Prior to the EEA, trade secrets were the subject of state law protections, largely under state-adopted versions of the Uniform Trade Secrets Act. Under that regime, federal courts obtained jurisdiction over such claims solely by means of diversity jurisdiction or through charges under federal criminal statutes stretched to cover trade secret misappropriation. Read More
Hurricane Sandy and its aftermath has created enormous difficulties for employers on the East Coast. Between the devastation caused by the storm itself, power outages, and transportation shutdowns, employers were forced to close business or operate on a significantly reduced basis for days, and, in some cases, weeks. Nevertheless, companies must still satisfy certain obligations as employers. While situations vary considerably from employer to employer, here is a summary of key issues and employer obligations post Sandy: Read More
On November 15, 2012, the Securities and Exchange Commission released its Fiscal Year 2012 Annual Report on the Dodd-Frank Whistleblower Program (the “Report”), the first full-year report issued since the enactment of Dodd-Frank. The Report analyzes the 3,001 tips received over the last twelve months by the Commission’s Office of the Whistleblower (“OWB”) , which is responsible for the implementation and execution of the Commission’s whistleblower program. The Report also provides additional information on the whistleblower award evaluation process that resulted in its first (and only) award issuance in August 2012.
Activities of the Commission’s OWB
The OWB was created pursuant to Section 924(d) of the Dodd-Frank Act. OWB reviews and processes whistleblower tips through the Commission’s Tips, Complaints, and Referrals (“TCR”) System, leveraging resources of the Commission’s Office of Market Intelligence to evaluate tips and assign them to the appropriate division. OWB works closely with the Enforcement Division throughout the investigative process, serving as a liaison between the whistleblowers or their counsel and Enforcement staff. OWB arranges meetings between whistleblowers and investigators or subject matter experts within Enforcement to advance investigations. OWB also communicates with other agencies’ whistleblower offices, including the IRS, Department of Justice, Commodity Futures Trading Commission, and the Department of Labor’s OSHA. Read More
Many employers systematically round employee time punches to the nearest tenth of an hour. For example, if an employee clocks in at 9:58 a.m., the time is rounded up to 10:00 a.m.; and likewise if she clocks in at 10:02 a.m., her time is rounded down to 10:00 a.m. Under federal law, rounding policies are lawful if they are neutrally applied and do not systematically under compensate employees. While this standard was approved by the California Division of Labor Standards and Enforcement, until recently, no California court or statute specifically addressed the issue.
However, on October 29, 2012, the California Court of Appeal for the Fourth Appellate District in See’s Candy Shops, Inc. v. Superior Court confirmed that the neutral rounding standard adopted by federal law and the Department of Labor Standards and Enforcement is appropriate under California law. Thus, under See’s Candy, California employers may maintain lawful rounding policies if the rounding does not consistently result in a failure to pay employees for time worked. An example of a potentially unlawful rounding policy is one in which the employer always rounds time down.
Also of note, in approving the federal rounding standard, the See’s Candy opinion rejected the plaintiff’s reliance on California Labor Code section 204. Specifically, the court emphasized that Section 204 is solely a timing requirement as to when wages must be paid, and does not create any substantive right to wages.
You can read the decision here.
Two federal district courts recently issued decisions adopting a broad interpretation of the anti-retaliation provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and allowed Dodd-Frank whistleblower claims to proceed past motions to dismiss. Significantly, these cases stand for the proposition that to be protected as a whistleblower under the retaliation provision of Dodd-Frank, an individual does not have to meet the definition of a whistleblower for purposes of obtaining a bounty under Dodd-Frank and in particular, does not necessarily have to make a disclosure to the Securities and Exchange Commission (the “SEC”) in the manner required in connection with the bounty provision of the statute. While the issue is far from settled as Dodd-Frank retaliation cases are just beginning to work their way through the federal courts, these decisions could contribute to further increases in the number of Dodd-Frank whistleblower retaliation claims filed against employers. Read More
In a July 30, 2012 decision the Second Appellate District of the Court of Appeal ruled that an employee was not bound by the arbitration clause in his employee handbook for a slew of reasons:
- the clause itself was buried (or as the Court said “not specifically highlighted”) in a lengthy handbook and was not called to the employee’s attention;
- the employee did not specifically acknowledge the clause or agree to arbitrate, but merely signed an acknowledgment of receipt of the handbook itself;
- the handbook contained a (relatively) standard clause that it was not intended to create a contract but, the employer also “had it both ways” and retained the rights to unilaterally amend the handbook’s provisions;
- the employer failed to provide the employee with the specific arbitration rules; and
- the clause itself was found unconscionable: procedurally, because the employer did not distribute the rules governing the arbitration to employees and because the issue of arbitration was not negotiable and, substantively, because it required the employee to relinquish administrative and judicial rights and made no express provision for discovery rights.
While this decision points out the pitfalls of this particular factual scenario, it also highlights some nuances. As courts reinvigorate their scrutiny of arbitration clauses and agreements, due to what this Court called “the increasing phenomenon of depriving employees of the right to a judicial forum,” employers may want to revisit and revise their handbook language.
On August 21, 2012, the Securities and Exchange Commission (SEC) announced that it has awarded its first whistleblower bounty, just over one year after the SEC’s Dodd-Frank whistleblower rules became effective. The SEC’s Claims Review Staff issued a short order, Release No. 34-67698, granting the whistleblower’s award, which notes that the SEC declined to award a claim to a second whistleblower involved in the action. Read More
Is it “here we go again” for Harris? In the latest round of the donnybrook that is the administrative exemption in California, a California Court of Appeal in Harris v. Super. Ct., No. B195121 (Cal. App. July 23, 2012), held that the plaintiffs, insurance claims adjusters, were—as a matter of law—not exempt from California’s overtime laws under California’s administrative exemption. After a trial court certified a partial class of California claims adjusters, but denied plaintiffs’ motion for summary judgment, the parties appealed the decision all the way to the California Supreme Court. Read More
On June 28, 2012, a Texas District Court held that the Dodd-Frank’s anti-retaliation provision per se does not apply extraterritorially. In Asadi v. G.E. Energy (USA), LLC, Case No. 4:12-cv-00345 (S.D. Tex. June 28, 2012), the district court determined that Dodd-Frank’s anti-retaliation provision did not extend to or protect the plaintiff’s extraterritorial whistleblowing activity. Note that this decision does not apply to Dodd-Frank’s whistleblower bounty provisions, pursuant to which whistleblowers outside of the U.S. may be eligible for bounties for making reports of violations to the SEC.
The complaint alleged that Asadi was a U.S.-based employee who was working from an office in Jordan to secure and manage energy contracts with the Iraqi government. Asadi alleged that he notified his supervisors and a company ombudsperson of a potential violation of the Foreign Corrupt Practices Act (“FCPA”), whereupon GE Energy pressured him to step down, attempted to negotiate a severance, and eventually terminated his employment.
Applying the Supreme Court’s 2010 decision in Morrison v. National Australia Bank, Ltd., 130 S. Ct. 2869 (2010), the district court held that the absence of language regarding the extraterritoriality of Dodd-Frank’s anti-retaliation provision led to a presumption that it did not apply extraterritorially. The district court noted that Section 929P(b) of Dodd-Frank gave extraterritorial jurisdiction over specific enforcement actions brought by the SEC or the DOJ, but not to private actions such as the plaintiff’s. The district court also found persuasive a Department of Labor Administrative Review Board en banc holding that, because Dodd Frank’s amendments to SOX were silent as to extraterritoriality, the amendments could not be construed to extend the reach of SOX extraterritorially. See Villanueva v. Core Labs, NV, 2001 WL 6981989, ARB Case No. 09-108, ALJ Case No. 2009-SOX-6 (ARB Dec. 22, 2011). Thus, the district court concluded that Dodd-Frank’s anti-retaliation provision did not protect Asadi from alleged retaliation and granted GE Energy’s motion to dismiss.