North America

SEC and FINRA Provide Guidance on Regulation Best Interest

Recently, the U.S. Securities and Exchange Commission’s (“SEC”) Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert to provide broker-dealers with guidance on examinations regarding regulation Best Interest (“Reg BI”).  Reg BI requires that when broker-dealers make a recommendation regarding securities to a retail customer it must act in the best interest of the customer, without placing its own financial or other interest ahead of the retail customer’s interest.  The Financial Industry Regulatory Authority (“FINRA”) also stated that it would take the same approach in its examinations of broker-dealers and their associated persons for compliance with Reg BI.

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Global Lockdown: International Jurisdictions Extend COVID-19 Stay-Home Orders

As we previously reported, the COVID-19 pandemic has altered the global workplace and international employer-employee relations in profound ways. As COVID-19 continues to spread, countries have enacted nationwide orders, requiring billions of people to stay at home. Recently, in an effort to continue to slow the spread of COVID-19, several countries have extended national stay-home orders. The ordered restrictions vary according to jurisdiction specific reasons.

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Time Is Money: A Quick Wage-Hour Tip on … the De Minimis Principle

Generally, the Fair Labor Standards Act (“FLSA”) requires employers to compensate their non-exempt employees for all time that they are required or allowed to perform work, regardless of where and when the work is done.  However, an exception exists for small amounts of time that are otherwise compensable work time but challenging to record, otherwise known as the de minimis doctrine.  Of course, the million-dollar question is how much time is considered de minimis.  Unfortunately, there is no bright-line rule and the answer may differ under federal law and California law, or other states.

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Another California Federal Judge Denies Postmates’ Attempts to Escape Thousands of Individual Arbitrations Continue Reading…

We have written here about the efforts of several gig economy companies like DoorDash to avoid having to conduct – and pay for – thousands of individual arbitrations alleging that their workers had been misclassified.

As we have said before, companies that implement arbitration agreements with class action waivers must be careful what they ask for.  By using such agreements, they run the risk of dozens, hundreds or even thousands of individual arbitrations, the cost of which could threaten the companies’ very existence.  (In California, we estimate that the arbitration costs alone for a single-plaintiff case are approximately $60,000 – which does not include the attorney’s fees in defending that case or the potential exposure.)  It is for that very reason that some companies have elected not to implement such agreements.

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First Circuit: Massachusetts Employee Must Abide by a Restrictive Covenant Governed by a Delaware Choice of Law Clause – the More Things Change, the More They Stay the Same, Part II

When Massachusetts enacted the Massachusetts Noncompetition Agreement Act (“MNCA”) in mid-2018, some commentators suggested that the statute reflected an anti-employer tilt in public policy. But, we advised  that sophisticated employers advised by knowledgeable counsel could navigate the restrictions set forth in the MNCA.  As reported here, the May 2019 decision from the District of Massachusetts in Nuvasive Inc. v. Day and Richard, 19-cv-10800 (D. Mass. May 29, 2019) (Nuvasive I) supported our initial reading of the MNCA.   The First Circuit’s April 8, 2020 decision in Nuvasive, Inc. v. Day, No. 19-1611 (1st Cir. April 8, 2020) (Nuvasive II),which upheld the District Court’s decision, provides further evidence that Massachusetts courts will still enforce contractual choice of law provisions when considering requests to enforce certain restrictive covenants in employment contracts.  Indeed, in Nuvasive II, the First Circuit concluded that the MNCA, by its terms, does not apply to non-solicitation agreements, and that the Massachusetts employee, Day, had not demonstrated a legal basis for the District Court to ignore the Delaware choice of law clause in his employment agreement.

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InsightsPresident Trump Adds Teeth to CFIUS Bite: Chinese Company Ordered to Divest Acquisition of U.S. Hotel-Software Company

The U.S. Department of the Treasury finalized the new Committee on Foreign Investment in the United States (“CFIUS”) regulations, which became effective on February 13, 2020.[1]

Amongst other matters, the new regulations significantly expand CFIUS’s jurisdiction for non-controlling investments, including the review of transactions involving U.S. businesses that manage or collect “sensitive personal data” of U.S. citizens. Notably, section 721 of the Defense Production Act of 1950, authorizes CFIUS’s jurisdiction to review covered transactions for national security implications, and enumerates the President’s authority to “suspend or prohibit any covered transaction that threatens to impair the national security of the United States.” Read more…

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What to Know about CBP Export Seizures

Regular readers of our newsletter, and those familiar with U.S. import and export regulations, know that U.S. Customs and Border Protection (“CBP” or “Customs”) generally enforces the U.S. import regulations, while multiple executive government agencies administer regulations related to the export of goods. Such agencies include, but are not limited to, the Department of Commerce Bureau of Industry and Security (“BIS”), the Department of State Directorate of Defense Trade Controls (“DDTC”), the Department of the Treasury Office of Foreign Assets Control, the Drug Enforcement Agency, and the Census Bureau. Read more…

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Recent Key OFAC Actions and Related Legal News

Key OFAC Actions

Central Bank of Iran (CBI) General License and FAQs

In September 2019, OFAC designated the CBI under terrorism-related sanctions authorities, which appeared to prohibit CBI’s involvement in processing payments for humanitarian-related transactions, such as those authorized under OFAC general licenses for agricultural commodities, medicines, or medical devices (“AgMed Licenses”). Read more…

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When Federal R&D Funding meets U.S. Trade Controls: Proceed with Caution

Cutting-edge technology is often a vital component for businesses seeking to expand their commercial market share. However, investing in research and development to develop a new product line can be costly and time consuming, making it difficult for some companies to reach their goals of advancing their current suite of products or exploring new innovations. To supplement their budgets for research and development, or “R&D” as it is commonly referred to, businesses may elect to pursue funding options available from the U.S. Government. Read more…

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Companies often must decide whether to conduct internal investigations after receiving information that could indicate ongoing violations of export control or economic sanction laws and regulations. It is important that they take adequate steps to preserve attorney-client privilege, immediately stop ongoing violations, and ensure resources and personnel are assigned to the investigative team. Deciding whether to conduct an investigation will ultimately depend on a variety of factors, and there are a number of decisions to be made at the outset of the investigation as outlined below. Read more…

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