North America

D.C. Circuit Weighs in on Issue of Willfulness in Prosecutions for Unlawful Exports

What is the appropriate standard for determining whether a defendant has acted willfully in violation of the Arms Export Control Act (“AECA”)? On August 20, 2019, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) weighed in on this question in U.S. v. Burden. Specifically, the court examined the definition of willfulness as it relates to the unlawful exporting of defense articles without a license.[1]

Exports and imports of defense articles are governed by the AECA.  The AECA serves the purpose of furthering the national security and foreign policy of the United States and the International Traffic in Arms Regulations (“ITAR”) are the regulations that implement the AECA. In this case, the defendant was convicted for violating the AECA for exporting gun parts to Thailand without a license. During trial, the district court instructed the jury that in order to find that the defendant willfully violated the law, the jury must find that “the defendant knew that his conduct was unlawful.”[2] The jury found the defendant guilty and he appealed, arguing that his conviction should be overturned, in part, because the jury was provided with the improper standard required for a conviction. On appeal, the D.C. Circuit examined the willfulness standard provided in the district court’s instruction.

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Andrew Penhale becomes RSS’s Managing Partner

October 15, 2019 — Change of leadership for the firm: after a long tenure as Managing Partner of Robinson Sheppard Shapiro, Charles E. Flam will be passing the baton to Andrew Penhale. For Andrew, this will be like returning home, since he practised with the firm from 2001 to 2010, after his 1997 call to the Bar. He subsequently was Head of the Claims Service of the Professional Liability Insurance Fund of the Barreau du Québec.

“This position matches my aspirations perfectly”, said Mr. Penhale. “I know the group, having been a partner with the firm, which allowed me to appreciate Mr. Flam’s leadership. It’s quite a challenge to follow in the footsteps of someone who led the firm for so many years; at least, I know I’m handed a first-rate team.”

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NLRB Solidifies Boeing and Provides Guidance on Employer Workplace Rules

As discussed in previous blog posts and articles, the National Labor Relations Board (NLRB), in Boeing Co., overruled past precedent that had resulted in the invalidation of “commonsense [workplace] rules and requirements that most people would reasonably expect every employer to maintain.”  Boeing sought to return the analysis to a more balanced approach in which workplace rules would no longer be struck down simply because such rules could have been more narrowly tailored or just because a hypothetical employee theoretically might construe them to conflict with the exercise of Section 7 rights.

On October 10, 2019, for the first time since Boeing was published, the Board had the opportunity to clarify and apply the analysis now required for facially neutral work rules in LA Specialty Product Company.   At issue in LA Specialty Produce Company was two workplace rules included in the employee manual for employer LA Specialty Produce Company.

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There’s a New Economic Sanctions Sheriff in Town: the SEC

In recent years, the U.S. Securities and Exchange Commission appears to be taking a more active role in a regulatory area for which it is not traditionally associated: economic sanctions. So far this year, the SEC has sent comment letters to several major public companies, including PayPal and The Bank of New York Mellon, inquiring about business activities related to U.S. Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) economic sanctions.

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California Court of Appeal Rejects Employee’s Attempt to Seek Derivative Wage Statement and Waiting Time Penalties Based on Alleged Meal and Rest Period Violations Continue Reading…

In bringing meal and rest period claims on behalf of their clients, the plaintiffs’ bar has long argued that merely because there was an alleged meal or rest period violation, there were also “derivative” statutory violations entitling their clients to additional penalties.  By arguing that an employer is also on the hook for such penalties, plaintiffs’ attorneys argue that the potential exposure is greater.  And with greater potential exposure, employers will be more inclined to settle – or so the rationale goes.

These purported “derivative” violations have come in at least two forms.  One type of “derivative” violation the plaintiffs’ bar has advanced is the theory that, because an employee was allegedly denied a meal or rest period, and because the employee would thus be owed an hour of “premium” pay for such a violation, the employee’s wage statement was not accurate because it did not show the premium pay the employee allegedly should have been paid, but was not.  That theory has been nonsensical from the get-go because it ignored the primary purpose of California’s wage statement law – that employees be provided a statement showing a calculation of the wages that they were actually paid.  Nevertheless, the plaintiffs’ bar continued to push this theory.  Understandably so – the maximum statutory penalty for wage statement violations is $4,000.  And that would be for just one employee.

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California Governor Signs Legislation Outlawing Mandatory Arbitration Agreements with Employees Continue Reading…

As employers with operations in California had feared, Governor Gavin Newsom has signed AB 51, which effectively outlaws mandatory arbitration agreements with employees – a new version of a bill that prior Governor Jerry Brown had vetoed repeatedly while he was in office.

The bill not only prohibits mandatory arbitration agreements, but it also outlaws arbitration agreements in which employees must take an affirmative action to escape arbitration, such as opting out.

And as the statute is written in broad terms that extend to waivers of statutory “procedures,” it appears to extend not just to arbitration of an employee’s claims, but also to waivers of jury trials and of class actions.

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Belief That Information Is a Trade Secret, Even If It Isn’t, Is Enough to Be Convicted for Attempted Theft of Trade Secrets

A federal judge in Chicago recently held that an individual can be convicted of attempting to steal a trade secret, even if the information at issue did not actually constitute a trade secret, so long as the individual believed that the information was a trade secret.

In United States of America v. Robert O’Rourke Opinion, Judge Andrea R. Wood denied a post-conviction motion for a new trial in a case involving attempted and actual trade secret theft.  The decision involved a metallurgical engineer and salesperson, Robert O’Rourke, who resigned his employment to take a position as vice president of research and development for a China-based competitor.  Shortly before his last day, he entered his employer’s facility and downloaded over 1900 documents from its network onto a personal hard drive.  His employer discovered this and alerted law enforcement, and O’Rourke was stopped by Customs and Border Patrol officials while attempting to board a flight to China with the hard drive containing the downloaded documents.  At trial, he was convicted of actual and attempted trade secret theft.

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Updated Job Accommodation Network Toolkit Available for Disability Accommodation Resources

Employers seeking information about potential reasonable accommodations, and tips on the interactive process, can turn to the newly updated Job Accommodation Network (JAN) Toolkit.

The Department of Labor provides funding for JAN as a free, comprehensive, online resource to assist businesses in complying with the Americans with Disabilities Act (ADA). According to the website, the Toolkit “provides resources to support organizational efforts to accommodate applicants, candidates, and employees with disabilities; to train those serving in roles critical to managing disability; and to promote disability inclusion throughout the workplace.”

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Arrangements, Exceptions, and Modifications – OIG and CMS Challenge the Status Quo

The Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services Office of Inspector General (OIG) issued their long-awaited proposed rules in connection with the Regulatory Sprint to Coordinated Care today.  Transforming our healthcare system to one that pays for value is one of the Department’s top four priorities, and the Deputy Secretary launched the Regulatory Sprint to remove potential regulatory barriers to care coordination and value-based care.

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Setting aside the municipalities’ exemption from liability for firefighting

By Benoît Chartier, from our Insurance Law Practice Group.

October 9, 2019 — As an incentive for municipalities to enhance their firefighting services, the Fire Safety Act grants them an exemption from lawsuits when they have implemented and followed a fire safety cover plan.

However, this exemption is not unconditional: certain principles of liability remain, as seen in the decision of the Superior Court of Québec in Royal & Sun Alliance du Canada, société d’assurances c. Ville de Trois Rivières, 2019 QCCS 3181.

Click here to read more (PDF).

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