Posts by: Mike Delikat

SEC Bounty Hunters Take Heart: SEC Fines Company $265,000 For Using Severance Agreements That Provided a Waiver of Any Monetary Recovery For Filing a Tip

Mike Delikat and Renee PhillipsPosted on August 10, 2016

Today, the SEC announced that an Atlanta-based company, BlueLinx Holdings, is settling charges that its severance agreements contained provisions that it in its view might impede employees from communicating directly with the SEC about possible securities law violations. The company has agreed to pay a $265,000 sanction and to engage in other corrective actions as described below.

The specific provision at issue provided:

Employee further acknowledges and agrees that nothing in this Agreement prevents Employee from filing a charge with…the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other administrative agency if applicable law requires that Employee be permitted to do so; however, Employee understands and agrees that Employee is waiving the right to any monetary recovery in connection with any such complaint or charge that Employee may file with an administrative agency. (Emphasis added.)

With respect to this bounty waiver, the Commission stated that “by requiring its departing employees to forgo any monetary recovery in connection with providing information to the Commission, BlueLinx removed the critically important financial incentives that are intended to encourage persons to communicate directly with the Commission staff about possible securities law violations.”

Germany’s Financial Regulator Establishes New Whistleblower Platform

Mike Delikat, Renee Phillips and André ZimmermannPosted on July 11, 2016

Last week, Germany’s Financial Supervisory Authority (BaFin) unveiled a centralized platform for receiving whistleblower complaints, including anonymous complaints, of alleged violations of supervisory provisions within the financial sector. The move appears to represent a shift in German ideology toward a more favorable view of anonymous reporting, which for many years was discouraged in Germany and more broadly in the EU due to the risk of “organized systems of denouncement.” Under the new program, whistleblowers may submit reports in writing (on paper or electronically), by phone (with or without recording the conversation), or verbally. BaFin’s press release announcing the program states that it will make the anonymity of whistleblowers a “top priority,” and that it will not pass on the identity of whistleblowers to third parties. The program is “aimed at person with a special knowledge of a company’s internal affairs – for example because they are employed there or have some other contractual relationship or relationship of trust with the company.”

BaFin was required to implement this new platform due to an amendment to the German Act on Financial Services Supervision. Notably, the Act only applies to the financial services sector, not including external accountants, tax consultants and attorneys. It provides that employees working in the financial services sector may not be held liable for reporting potential or actual breaches of law under either employment law or criminal law, unless the report was false or grossly negligent.

Brexit: What Does it Mean for Employers in the U.K.?

Nicola Whiteley and Mike DelikatPosted on June 24, 2016

We set out below our best guess on where this leaves employees, management and HR in the UK.

Firstly as we have all heard repeatedly today, nothing is going to change immediately and that is the same for employment law. It will be years before any changes are made and for the time being, everything remains the same and critically, no one has to leave.

Much of our employment law is just that – employment law driven solely by the UK. We then have laws that have been enacted into UK law as a result of European directives – so those laws are the ones that may, at some point in the future, be targeted. Our guess at Orrick is that changes where they happen will be focused on consultation rights, holiday pay and working time. Worker involvement has never had the same traction in the UK that it has with our European counterparts and the UK has always viewed employee consultation with a degree of skepticism. For this reason, we think it may eventually be a focus for change.

Digging Into the New Overtime Regulations

Mike Delikat, Jill L. Rosenberg, Julie Totten and Lisa LupionPosted on June 6, 2016

In 2015, the Department of Labor (“DOL”) proposed substantial changes to the minimum salary level requirements, sought input on whether bonuses and incentives should be included in meeting the salary level test and considered changing the duties test to establish overtime eligibility. Taken together, these proposed changes would have had a drastic effect on the obligation of employers to pay overtime. On May 18, 2016, DOL issued its Final Rules and employers have until December 1, 2016 to comply. Overall, the changes strike a middle ground as DOL declined to adopt the more restrictive California 50% duties test. However, doubling the salary level threshold and other changes present significant economic and compliance challenges for employers. Below is a summary of key takeaways and steps employers should consider to address these changes and ensure compliance.

There’s No Longer an “App for That” in Austin: Lyft and Uber Pull Out Over Driver Fingerprinting Requirements

Mike Delikat and Kathryn MantoanPosted on May 19, 2016

Rideshare companies Lyft and Uber announced on May 9 that they were no longer offering their services in Austin, Texas, after voters there rejected a proposed ordinance that would have eliminated fingerprint-based background checks for drivers. In a Saturday election, 56 percent of Austin voters, despite what some have called confusing ballot language, rejected the proposed ordinance, known as “Proposition 1,” which was supported by the companies.

“Mind the (Gender Pay Equity) Gap”: The EEOC Holds Hearings on its Proposal to Require Pay Data on the EEO-1 Form

Mike Delikat and Gary SiniscalcoPosted on March 18, 2016

On March 16, the Equal Employment Opportunity Commission heard testimony from a variety of advocacy groups, academics and employer representatives on with regard to its proposed revisions to the EEO-1 adding W-2 pay data. Gary Siniscalco from Orrick provided testimony as an employer representative. Click here for Gary’s testimony.

Cross-Border Trends: UK to Follow US Attack on the Gender Pay Gap

Erin Connell, Mike Delikat and Nicola WhiteleyPosted on February 17, 2016

Following months of waiting the UK Government has finally published its draft regulations on the new “gender pay gap reporting” requirements in the UK. On publication of the draft regulations, the UK Government has asked one final consultation question: “What, if any, modifications should be made to these draft regulations?” – And so it would appear that the draft regulations are nearing but possibly not quite in final form, pending any pertinent responses received.

Financial Services and Technology Companies Beware: The U.S. Office of Federal Contract Compliance Has A Target on Your Back

Mike Delikat and Jill L. RosenbergPosted on February 11, 2016

The President released his 2017 budget this week. Budgets are aspirational documents that Congress rarely implements in full. The current acrimony between Congress and the Administration ensures that the President’s 2017 budget will likely remain aspirational. However, Presidential budgets and their accompanying justifications can shed light on an agency’s priorities.

Where Have You Gone Dennis Kozlowski? Third Circuit Dismisses Tyco Employee’s Whistleblower Claim Over Excessive Corporate Spending

Mike Delikat, Renee Phillips and Annabelle ChanPosted on February 8, 2016

On February 2, 2016, the Third Circuit affirmed the dismissal of a long-running SOX whistleblower suit filed by Jeffrey Wiest, a former accounts payable manager for Tyco Electronics. The decision is the first in which the Third Circuit has defined the “contributing factor” causation standard for SOX retaliation cases and provides helpful guidance on the issue.

Not So Final WARNing: Sixth Circuit Finds That Employment Ends with Termination of Wages, Not Notice

Mike DelikatPosted on January 20, 2016

In Morton v. Vanderbilt Univ., 2016 WL 52439 (6th Cir. Jan. 5, 2016), the Sixth Circuit recently held that, for purposes of the Worker Adjustment and Retraining Notification Act (“WARN Act”), employment does not end at notice of termination, but rather the employment relationship continues as long as the employee continues to be paid wages and accrue benefits.

Employment Law and Litigation