Client Alerts

The Michigan Youth Employment workplace poster has been updated.  This is a required posting for any Michigan employer with minor employees; so any such employer must replace their current poster with the updated version.  Nevertheless, because many employers who do not see themselves as users of child labor do end up employing minors from time to time, we suggest that all employers post the Youth Employment poster, even if they do not currently employ any minors.

Yesterday the National Labor Relations Board announced that as of November 14, 2011, employers across the country will be required to inform their employees that they have the right to unionize.  Under its newly promulgated rule, virtually all private sector employers—both unionized and non-unionized—that are subject to the National Labor Relations Act will have to post notices and take other measures advising their employees of their rights under the Act.  An employer that fails to comply with this new rule may be charged with engaging in an unfair labor practice under the NLRA.

In an August 24, 2011 decision (Wisconsin Interscholastic Athletic Association v. Gannett Co., Inc., Case No. 10-2627), the Seventh Circuit Court of Appeals held that the Wisconsin association overseeing high school sports ("WIAA") can limit who streams its games live on the Internet.  The court held that the WIAA has the right to enter into exclusive contracts for live streaming of its events, and that the First Amendment does not entitle other media to claim the same broadcasting rights without paying for them.  The decision could have First Amendment implications for media outlets nationwide.

AN OVERVIEW OF THE RECENT U.S. COURT OF APPEALS RULING IN UNITED STATES V. SCIENCE APPLICATIONS INTERNATIONAL CORPORATION AND WHAT IT MEANS FOR FEDERAL CONTRACTORS

Last December, amid holiday preparations and plans, the U.S. Court of Appeals for the District of Columbia Circuit decided a case that could potentially affect every federal contractor.  The ruling affirmatively applies the “implied certification” rule giving federal contractors another serious complication in the government contracting process, with no clear or uniform standards on the specific issue.  It highlights the importance of federal contractors having robust, effective contractor compliance systems to minimize the risk of severe penalties.  The case is United States v. Science Applications International Corporation, 626 F.3d 1257 (D.C. Cir. 2010), and its holding has created a great deal of buzz within the government contracting community.  It spread anything but holiday cheer.

For many employers, the NLRB's enforcement actions have created uncertainty when dealing with a decision to discipline or discharge an employee for inappropriate social media postings. ; A recent survey by the United States Chamber of Commerce indicates that more than 129 cases involving social media have been reviewed by the NLRB. ; Although few have been litigated so far, these cases make it clear that employers need to tread very carefully while disciplining employees for their social media posts. ; Even more troubling is the ability to draft social media policies that can survive the NLRB’s scrutiny. ; Recently, the NLRB's Division of Advice shed some light on the line between protected and unprotected activity in the context of social media by providing examples of unprotected conducted – at least in its view. ; This Client Alert highlights the NLRB's perspective on social media.

In a significant change in Michigan sexual harassment law, on July 29, 2011 the Michigan Supreme Court issued a 4-3 decision in Hamed v. Wayne County et al., which overruled its 1996 decision of Champion v. Nation Wide Security Inc.  Champion had imposed strict liability on employers under Michigan's Elliott-Larsen Civil Rights Act (ELCRA) for the intentional, criminal sexual acts of its employees.  In Hamed, the Court expressly overruled Champion and changed law which had been in place for the last 15 years.  Hamed holds that an employer's liability for criminal acts of an employee under the ELCRA is now limited to those acts the employer could have reasonably foreseen.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") amendments to the Fair Credit Reporting Act ("FCRA"), which became effective on July 21, 2011, affects any person (including an employer) that uses credit scores to take an adverse action against a consumer. ; These amendments potentially expand an employer's notice requirement obligations.

Employment agreements that contain both restrictive covenants and specific lengths or terms might pose enforcement risks if the contract simply runs its course and "expires".  That's the conclusion of the Michigan Court of Appeals in the recent unpublished decision in VHC, P.C. v. Elshaarawy, M.D., Docket No. 297625 (Mich. App. June 16, 2011).

The National Labor Relations Board ("NLRB" or "Board") recently expanded the right of workers to engage in organizing activity in public areas of their worksite.  In a 3-1 decision, the NLRB determined that a private property owner violated the National Labor Relations Act by prohibiting a contractors’ off-duty employees from handbilling on the owner’s premises.  New York, New York Hotel and Casino, 356 N.L.R.B. No. 119 (2011).

On July 12, 2011, the Securities and Exchange Commission (the "SEC"), issued Release No. IA-3236 (7/12/11) (the "Order"), raising the dollar amount thresholds in Rule 205-3 under the Investment Advisers Act of 1940 (the "Advisers Act") for purposes of the rule’s exemption under the Advisers Act permitting the payment of performance fees to registered investment advisers by "qualified clients."

In February 2011 the Internal Revenue Service announced a second voluntary disclosure initiative to allow taxpayers with undisclosed offshore bank, securities and other financial accounts to comply with US income tax and other offshore account reporting rules for prior years and avoid criminal penalties with reduced civil penalties.  In addition to other persons, these rules apply to citizens and U.S. resident aliens (e.g., U.S. resident aliens that have maintained accounts in their home country).

Introduction

On June 22, 2011, the Securities and Exchange Commission (the "SEC") adopted rules, rule amendments and amendments to Form ADV (the "New Rules") under the Investment Advisers Act of 1940 (the "Advisers Act") to implement Title IV of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act").

The New Rules were not adopted without some controversy. Two of the five SEC Commissioners voted against adopting new rules and amendments to register hedge fund and private fund advisers, and to impose reporting requirements on funds exempt from registration, arguing that the regulatory burdens of the new reporting requirements on venture capital advisers who are exempt from registration are too heavy, are contrary to congressional intent and would negatively impact capital formation. The SEC Commissioners unanimously voted to adopt rules to implement registration exemptions for venture capital fund advisers, advisers to private funds with less than $100 million in assets under management ("AUM") in the United States, and certain foreign advisers. The SEC Commissioners also unanimously voted to adopt a new rule defining "family offices" that are exempt from registration under the Advisers Act.

In a recent decision under the Open Meetings Act (“OMA”), the Michigan Court of Appeals held that a public body’s minutes did not adequately reflect the decision made at a meeting, thus violating the OMA.

In Citizens for Public Accountability v. Lawrence, Case No. 292311 (May 26, 2011), the township was in litigation with a developer. They reached a settlement, but before the township approved it, several public meetings were held for the purpose of considering it. The township held a special meeting on July 24, 2008 during which it approved the settlement agreement by adopting a resolution. Subsequently, at another meeting, they approved the minutes of the July 24 meeting and also approved the resolution.

OVERVIEW

The United States Supreme Court rarely issues a decision regarding public contracting.  When it does, this is a noteworthy event.  Such an instance occurred when it handed down an opinion in General Dynamics Corp. v. United States, No. 09-1298 (U.S., May 23, 2011). 

Last week, the DOL unveiled a "time-keeping smart phone app" for employees to keep their own time records via an application on their iPhones or iPod Touches. The App is free and can be downloaded from iTunes. While the App's concept seems simple and convenient, it may actually cause considerable confusion.

Last week, the DOL unveiled a "time-keeping smart phone app" for employees to keep their own time records via an application on their iPhones or iPod Touches. The App is free and can be downloaded from iTunes. While the App's concept seems simple and convenient, it may actually cause considerable confusion.

The disruptions to the automotive supply chain caused by the cataclysmic events in Japan are likely to continue for some time and become increasingly severe. Even suppliers that are not directly or immediately affected likely will experience some disruptions to their supply chains as the difficulties encountered by many tier 2 and tier 3 suppliers continue to ripple upward. As OEM plants reduce their production schedules to contend with parts shortages, purchasing forecasts could be sharply reduced and, in some instances, even suspended, causing ripples back downstream. Buyers and sellers, OEMs and suppliers, with and without a physical presence in Japan, with direct supply relationships or multi-tiered relationships with Japan are absorbing the shocks. Prudent suppliers will proactively review their contractual rights and obligations at the earliest opportunity, before situations become critical.

Certain documents relating to voting can be retrieved under Michigan’s Freedom of Information Act (“FOIA”). On March 9, 2010, the Michigan Court of Appeals ruled in Practical Political Consulting, Inc v Land 287 Mich. App. 434; 789 N.W.2d 178 (2010), that the government should turn over certain information regarding voters in Michigan’s 2008 Presidential Primary election.

Recent Media Law rulings analyzed by the Butzel Long Media Team.