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September 2012 Client Alerts

Health Care Reform:  Guidance on Play or Pay and 90-Day Waiting Period

On August 31, 2012, the Departments of Labor, Treasury, and Health and Human Services jointly issued temporary guidance on two related health care reform issues:  (i) determining full-time status of employees for purposes of the employer “play or pay” penalty and (ii) implementation of the 90-day maximum waiting period adjustment.  As the two pieces of guidance refer to one another, it is important to understand them both.  To learn more about the guidance issued on these two health care reform issues, please click here to read the Alert published by the Employee Benefits and Executive Compensation Client Service Group on September 24, 2012.

U.S. Army Solicits $7 Billion in Renewable Energy Contracts

The US Army Engineering and Support Center is accepting bids for new renewable and alternative energy projects to provide electrical utility services to sites under the jurisdiction of the Department of Defense across the continental United States.  Up to $7 billion will be available over the course of 10 years to purchase energy produced by renewable and alternative projects to help the Department meet its mandate to produce or procure at least 25% of its total facility energy needs by the year 2025.  To learn more about the bidding process, please click here to read the Alert published by the Energy and National Resources Client Service Group on September 7, 2012.

With Recent Changes Issued by the CFPB, Final Remittance Transfer Regulations to Become Effective February 7, 2013

One provision of Dodd-Frank that generated comparatively little concern when it was passed was section 1073, “Remittance Transfers.”  Closer examination and subsequent issuance of regulations has now drawn scrutiny to this provision, which was already so detailed and lengthy when it was inserted into the Act that there was little room for modification by the CFPB when the bureau issued its implementing regulations.  To learn more about the provision and how to comply in time for the February 7, 2013 effective date, please click here to read the Alert published by the Financial Institutions Client Service Group on September 19, 2012.

Comments on the “Effects of Foreign Policy-Based Export Controls” submitted September 21, 2012

To read the comments submitted by Stanley J. Marcuss and George F. Murphy of the  International Trade Group on the foreign policy export controls maintained by the Bureau of Industry and Security, please click here.

A New Law on Sexual Harassment in France

Since the initial enactment of anti-sexual harassment legislation in France in 1992, sexual harassment was not only prohibited under the French Labor Code but was also a punishable offense under the Penal Code.  However, the definitions in the Labor Code and Penal Code were both vague and not entirely in sync, and the French Constitutional Counsel ruled them unconstitutional in May of this year.  In order that sexual harassment “not go unpunished,” the French Parliament has adopted a new law.  To read more, please click here for the Briefing published by the Labor and Employment Client Service Group (Paris) on September 24, 2012.

German Labor Law & HR 2/2012

For a discussion of the “Revolving Door Clause” included in the German Temporary Employment Act governing the use of employing temporary workers, please click here to read the Newsletter published by the Labor and Employment Client Service Group (Hamburg) on September 25, 2012.

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March 2012 Client Alerts

9th Circuit Holds TILA Bars Rescission Suits Filed More Than 3 Years After Consummation

In McOmie-Gray v. Bank of America (9th Cir. Feb. 8, 2012), the Ninth Circuit Court of Appeals held that under the Truth in Lending Act (“TILA”), “rescission suits must be brought within three years from consummation of the loan, regardless whether notice of rescission is delivered within that three-year period.”  It ruled that the three year period in the Act is an absolute limitation on rescission actions and that the one year period for bringing claims applies only to damages actions and does not extend the time to file a claim for rescission even where the borrower has sent the Bank a written notice of rescission within three years of loan signing or “consummation.”  To learn more about the facts in this case and the Court’s decision, please click here to read the Alert published by the Commercial Litigation Client Service Group and the Financial Institutions Client Service Group on March 6, 2012.

How Long Should You Retain Data?  Recent Developments May Add Confusion Not Clarity

Businesses have always collected information about their customers, but with the explosion of on-line commerce the quantity of information collected has ballooned.  One question that necessarily arises for almost any business is deciding how long it will keep the data it collects.  Businesses are aware that future developments in technology will improve the usefulness (and value) of the data that is currently in their possession.  Retaining consumer data, however, raises a number of legal risks which are often difficult to quantify in light of the changing regulatory and litigation landscape.  For a discussion of how recent developments add to the legal complexity, please click here to read the Bulletin published by the Data Privacy & Security Team on March 16, 2012.

Supreme Court Weakens EPA’s Enforcement Regine

The United States Supreme Court handed landowners a major victory against the United States Environmental Protection Agency (EPA) in its unanimous decision in Sackett v. EPA, No. 10-1062.  The decision announced March 21, 2012, held that Clean Water Act compliance orders can be challenged in court under the Administrative Procedures, undercutting EPA’s historic practice of using compliance orders to, in the words of the Court, “strong-arm” parties into voluntary compliance.  To learn about the case and the Court’s decision, please click here to read the Alert published by the Environmental Client Service Group on March 22, 2012.

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January 2012 Client Alerts

Federal Trade Commission Increases Interlocking Directorates Thresholds

On January 24, 2012, the Federal Trade Commission announced its annual revision of the interlocking directorates thresholds under Section 8 of the Clayton Act.  The new thresholds were effective January 27, 2012.   The purpose of Section 8 of the Clayton Act is to prevent a “person” from serving as an officer or director of corporations that compete with one another in the marketplace, unless that competition is very limited.   For more information on the new thresholds, please click here for the January 27, 2012 Alert published by the Antitrust and Competition Client Service Group.

Premerger Notification Thresholds Increased

Effective February 27, 2012, the jurisdictional thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will be increased.  Pursuant to statutory amendments made in 2000, the thresholds are annually adjusted based on changes in gross national product.  One key effect of this year’s indexing is that transactions will only be reported if the Size of Transaction exceeds $68.2 million, an increase over last year’s $66 million threshold.  To read more about the 2012 thresholds, please click here for the Alert published by the Antitrust and Competition Client Service Group on January 27, 2012.

SEC Changes Settlement Policy for Enforcement Actions With Parallel Criminal Proceedings

The SEC announced in January a significant change in its settlement policy for civil enforcement actions in which the defendant is also subject to parallel criminal proceedings.  Under the SEC’s new policy, any defendant who has admitted to or been found guilty of criminal conduct cannot settle parallel SEC charges without also admitting the SEC’s allegations.  For more information on the new policy, please click here to read the Alert published by the White Collar Defense & Investigations and Securities Litigation & Enforcement Client Service Groups on January 13, 2012.

NAD Reviews Use of Facebook’s “Like” Feature in Promotions

In 2010, Facebook offered its users the ability to click a button indicating that they “like” a company or a product.  Once clicked, the “liked” product appears on a user’s Facebook Wall and the user’s screen name or icon could also appear on the company’s Facebook page along with other users who liked the product.   Companies quickly realized the benefit of being “liked,” and encouraged consumers to “like” their products by making incentives available only to those who liked the product.  This practice is often referred to as a “like-gated” promotion.  The use of these promotions has raised consumer protection questions, and the National Advertising Division of the Council for Better Business Bureaus (“NAD”) has recently issued its first decision involving a like-gated promotion.  To learn more about the decision and allegations considered, please click here to read the Bulletin published by the Internet & New Media Group on January 3, 2012.  

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November 2011 Client Alerts

FED Releases Second Set of FAQs on Durbin Rules

The Federal Reserve Board recently posted a second set of questions and answers to the “Frequently Asked Questions About Regulation II (Debit Card Interchange Fees and Routing)” on the Fed’s website.  This current release of FAQs has been merged with the previously published FAQs, with the newer questions annotated with the date added.  For a summary of the new issues addressed in the FAQs, please click here to read the Alert published by the Financial Institutions Client Service Group on November 28, 2011.

FinCen Issues FAQs and Holds Webinar on Prepaid Access Rule

The Financial Crimes Enforcement Network ( “FinCEN”) recently released a set of FAQs related to the final rule on prepaid access that was issued on July 29, 2011 (the “Rule”).  The FAQs are intended to provide interpretive guidance for the Rule, not supersede or replace any part of it.  FinCen also recently  gave a webinar presentation on the Rule.  The most significant clarifications to the Rule made by FinCen are discussed in an Alert published by the Financial Institutions Client Service Group on November 28, 2011. To read this discussion,  please click here.

Supreme Court to Determine Whether Corporations Are Liable in U.S. Courts for Human Rights Violations Committed Abroad

The U.S. Supreme Court may soon decide the extent to which corporations may be sued for alleged human rights violations which arise in connection with their business activities outside the U.S.  The Court has granted certiorari petitions in two cases brought against corporations for alleged human rights violations committed abroad.  In each case, the claims were discussed by a Court of Appeals on the ground that corporations are immune from such suits.  The cases will be argued in tandem, even though different statutes apply.  To read more the cases and the statutes being applied, please click here for the Alert published by the Commercial Litigation Client Service Group on November 11, 2011.

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October 2011 Client Alerts

NLRB Postpones Effective Date of “Employee Rights” Posting Requirement

The National Labor Relations Board announced on October 5, 2011, the decision to postpone until January 31, 2012 the effective date of its recently published rule requiring employers to post notices informing employees of their rights under the National Labor Relations Act.  The NLRB finalized its new notice-posting requirement in August and at that time announced that the rule would take effect on November 14, 2011.  However, federal lawsuits were filed challenging the rule and prompting many questions and uncertainty from employers across the nation.  To learn more about the rule, please click here to read the Alert published by the Labor & Employment Client Service Group on October 6, 2011.

The Computer Fraud and Abuse Act (CFAA) — The Benefits of a Computer Use Policy That Restricts Employee Access

Employers that provide employees unfettered access to company computer systems may unwittingly forfeit a valuable statutory remedy against the misappropriation of electronic data.   Such employers should ensure that they have a computer use policy in place that explicitly distinguishes between authorized and unauthorized use.  To learn more about the Act and the  federal avenue it provides to pursue employees who have misappropriated electronic information, please click here to read the Alert published by the Labor & Employment Client Service Group on October 27, 2011.

Qualified Retirement Plan Limits for Calendar Year 2012

 The IRS has announced its 2012 cost-of-living adjustments for retirement plans.   To access a chart reflecting the qualified plan limits for calendar years 2009-2012, please click here for the Alert published by the Employee Benefits & Executive Compensation Client Service Group on October 24, 2011.

FINCEN Issues a Notice of Proposed Rulemaking Requiring Cross-Border Report for Prepaid Cards

The Financial Crimes Enforcement bureau has released a proposed rulemaking that would require consumers holding prepaid cards aggregating more than $10,000 in value to report the cards when crossing into or out of the U.S., in the same way that they report cash, travelers checks and other monetary instruments.  Please click here to read the Alert published by the Financial Institutions Client Service Group on October 18, 2011.

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September 2011 Client Alerts

Social Media and the National Labor Relations Act:  A Trap for Unwary Employers

The use of social media has become one of the most rapidly-changing areas in employment law today.  What most employers do not realize is that the National Labor Relations Board has become very active in policing both the substance of social media policies and the actions of employers in addressing social media concerns.  Please click here to read an overview of NLRB activity in the area of employee use of social media published by the Labor & Employment and Internet & New Media Client Service Groups on September 23, 2011.

Check It Out and Check It Off:  2012 Group Health Plan Checklist

While the Patient Protection and Affordable Care Act, as amended (“PPACA”), required significant design changes for group health plans in 2010 or 2011, some additional requirements must be implemented for 2012.  Please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on September 7, 2011. 

IRS Establishes a Voluntary Classification Settlement Program

The IRS recently announced a new settlement program for employers with misclassified workers.  Under the new program, employers can get a significant reduction in their federal employment tax liability associated with past nonemployment treatment by agreeing to properly classify their workers for future tax period.  The announcement came on the heels of recent announcements that the IRS, Department of Labor and various state agencies are collaborating on examining worker misclassification issues.  To learn more about the new program, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on September 30, 2011.

Department of Labor Issues Final Rule Requiring Follow-On Contractors to Hire Their Predecessor’s Employees

The Department of Labor issued a final rule just before Labor Day that, in effect, will given certain employees now performing under Federal government service contracts employment for life or at least for as long as the government continues to contract for those services.  Although the rule does not take effect until the Federal Acquisition Regulation Council issues its complementary regulations, matters are sufficiently final that contractors should begin planning for how they are going to comply.  To learn more about this new regulation, click here to read the Alert published by the Government Contracts Team on September 8, 2011.

U.S. House Panel Hears Divergent Opinions on SRO Oversight of Investment Advisers

Fund managers and other investment advisers should be aware that Congress is now considering legislation that would significantly alter regulation of the nation’s registered investment advisers.  A key House subcommittee has heard widely divergent views on the proposed legislation entitled the “Investment Adviser Oversight Act of 2011.”  To learn more about the draft legislation, click here to read the Alert published by the White Collar Defense and Investigations Securities Litigation and Enforcement Client Service Groups on September 20, 2011.

New Patent Reform Bill Poised to Significantly Change U.S. Patent Law

On September 8, 2011, Congress approved the Leahy-Smith America Invents Act of 2011.  The Act materially alters a long history of patent law in the United States.   Among the provisions addressed by the Act are who is entitled to a patent (“first to file” versus “first to invent”) and who may file a “false marking” lawsuit.  To read more about how the Act alters patent law, please click here to read the Bulletin published by the Intellectual Property Client Service Group on September 12, 2011. 

FinCEN Issues Final Rule on Prepaid Access; Extends Compliance Date for Many Aspects of the Final Rule

New anti-money laundering regulations that directly impact retail business that issue or sell gift cards or other prepaid cards were issued by the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN),  The regulations require the collection and verification of customer information when certain prepaid cards are sold or reloaded.  To read an overview of the Final Rule, please click here for the Alert published by the Financial Institutions Client Service Group on September 6, 2011. The Final Rule was set to go into effect on September 27, but FinCEN announced that it has extended the compliance date for most aspects of the regulations.  For information on how the compliance dates changed, please click here to read the Alert published on September 12, 2011.

New Dual/Third Country National Rule Continues to Present Challenges

A new rule took effect in August which amended the International Traffic in Arms Regulations (ITAR) to include a new license exemption for the transfer of defense articles to dual/third country national employees of approved non-U.S. licensees under ITAR agreements.  To read about the new rule, please click here for International Regulatory Bulletin published September 28, 2011.

DDTC Updates its “Guidelines for Preparing Electronic Agreements” to Implement New Dual/Third Country National Rule

In August, DDTC updated its “Guidelines for Preparing Electronic Agreements” (the “Guidelines”) to reflect implementation of the new rule and provide guidance to exporters preparing ITAR agreements.  To learn more, please click here to read the International Regulatory Bulletin published September 28, 2011.

 Electronic Payment of Registration Fees

The Directorate of Defense Trade Controls (DDTC) issued an amendment to the International Traffic in Arms Regulations (ITAR) that requires a change in the method of payment for registration fees.  Effective September 26, 2011, all registration fees must be paid electronically via Automated Clearing House.  To read about the amendment, please click here for the International Regulatory Bulletin published September 15, 2011.

French Working Time for Executives:  Lump-Sum Remuneration Agreements Based on a Fixed Number of Working Days Per Year (so-called Forfaits-Jours)

The legal duration of work for employees in France is 35 hours per week, meaning that any hours required to be worked above this limit would normally be considered overtime.  Executives are, however, most often not subject to this limit.  For an outline of how the French Labor Code distinguishes between three types of executives, please click here to read the September 2011 Briefing published by the Paris Labor & Employment Client Service Group.

 The Agency Workers Regulations 2010

UK’s new Agency Workers Regulations come into force on 1 October 2011.  The regulations are intended to give agency workers the same basic employment rights and conditions as permanent staff employed directly by the relevant company.  To learn about the new regulations, please click here for the September 2011 Briefing published by the London Labour and Employment Client Service Group.

China Announces Legal Changes That May Broaden Power to Investigate Bribery

In August the National People’s Congress of the People’s Republic of China released the draft Criminal Procedure Law Amendment to the public for comment.  If passed, the amendment is expected to provide additional protection to the civil rights of accused parties.  However, critics say that the amendment would also provide authorities legal cover to utilize secret locations to detain subjects suspected of engaging in acts involving national security, terrorism, or other serious crimes which may include serious bribery.  To read about the amendment, please click here for the International Regulatory Bulletin published September 27, 2011.

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May 2011 Client Alerts

Federal Judge in Missouri Dismisses Legal Challenge to Health Care Reform

The Judge in the U.S. District Court for the Eastern District of Missouri, Southeastern Division, entered an order dismissing a lawsuit filed by Lt. Gov. Peter Kinder that challenged the Patient Protection and Affordable Care Act.  Kinder et al v. Geithner et al. was filed in July 2010 by Kinder, joined in by six other Missouri residents, as a private citizen after the state’s attorney general declined to join other states in challenging the health care law.  To read more about the order in this case, please click here to see the Alert published by the Life Sciences and Health Care Client Service Group on May 3, 2011.

FTC Cracking Down on Affiliate Advertisers

In April the FTC filed 10 lawsuits against companies and individuals that run affiliate advertising websites.  These lawsuits come within two months of an earlier round of lawsuits targeting affiliate advertising programs.  The most recent targets are fake news websites that promote weight loss products.  To learn more, please click here to read the Alert published by the Retail Team on May 5, 2011.

Arbitration Clauses May Waive Class Proceedings

The U.S. Supreme Court recently ruled that the Federal Arbitration Act does not allow state law to invalidate class action waivers in arbitration agreements on the basis of unconscionability.  While AT&T Mobility v. Concepcion involved consumer claims, the language of the ruling will bolster enforceability of class action waivers in employment related arbitration agreements.  To read more about the ruling, click here for the Alert published by the Labor & Employment Client Service Group on May 18, 2011.

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April 2011 Client Alerts

W-2 Reporting of Employer-Provided Health Care Costs

The 2010 health care reform legislation included an obligation for employers to inform employees of the cost of their health coverage.   The IRS has now issued Notice 2011-28, which provides interim guidance for employers on W-2 reporting  of the cost of coverage.  For more information, please click here to read the Alert regarding the Notice published by the Employee Benefits & Executive Compensation Client Service Group on April 5, 2011.

Form I-9:  Changes to Accepted Documentation

As of May 16, 2011, the documents employees present to employers for I-9 verification are subject to new regulations.  The U.S. Citizenship and Immigration Services of the Department of Homeland Security has issued a final rule concerning the list of acceptable documentation.  To learn more about the changes in acceptable documentation, please click here to read the Alert published by the Labor & Employment Client Service Group on April 27, 2011. 

Reminder for Plan Administrators to Review Confidentiality Procedures for Qualified Retirement Plans 

Plan administrators of plans that offer employer stock as an investment alternative should review the disclosures provided to plan participants.  Investment in employer stock represents a significant litigation threat for plan fiduciaries.  However, the plan fiduciary may be relieved of liability for participant losses resulting from the decision to invest in employer stock if certain disclosures are provided under ERISA Section 404(c).  To learn more, please click here to read the Alert published by the Employee Benefits & Executive Compensation Client Service Group on April 12, 2011.

Pension Plan Reporting of Foreign Bank and Financial Accounts

Representatives of pension plans with interests in foreign financial accounts may be required to report those accounts to the Internal Revenue Service.  On February 24, 2011 the Treasury Department issued final regulations greatly expanding the reporting requirements for individuals and entities that hold interests in foreign accounts.   To learn more about the regulations, please click here to read the Alert published April 12, 2011 by the Employee Benefits & Executive Compensation Client Service Group.

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Effect of a Potential Federal Government Shutdown on Federal Banking Agencies? Business as Usual.

If there is a partial Federal government shutdown due to a failure to reach a budget agreement, what effect would this have on the four main Federal banking agencies? The short answer: None.

None of the Federal Reserve System, the FDIC, the OCC, or the OTS receives appropriations from Congress. Instead, each of these Federal agencies is funded through various other sources, as described below. Thus, none of the services or responsibilities of these Federal agencies will be affected if a budget agreement is not reached.

However, many other Federal agencies may be significantly affected by a Federal government shutdown, including, notably for financial institutions, the SEC. We would recommend that institutions with on-going matters with the SEC reach out to their contact persons at the SEC to discuss their situations.

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Financial Services Update

Financial Services Update

November 5, 2010

Authored by: Matt Jessee

Election Day Implications

Based on this week’s election results, next year’s Senate ratio will be 51 Democrats, 47 Republicans, and 2 Independents who will most likely caucus with Democrats. Nine races have yet to be called in the House of Representatives, but the final Republican net gain will most likely be 64 seats. The House Republican leadership will most likely consist of John Boehner (OH) as Speaker, Eric Cantor (VA) as Majority Leader, Kevin McCarthy (CA) as Majority Whip, and Greg Walden (OR) as Chairman of the House Leadership. The Democratic leadership in the House has not been determined, but current-Speaker Nancy Pelosi (CA) has announced she will run for Minority Leader, current-Leader Steny Hoyer (MD) has announced he will run for Minority Whip, and current-Whip James Clyburn (SC) has also announced he will run for Minority Whip. The most important committee leadership change impacting the financial services industry will be Rep. Spencer Bachus (R-AL) as the next likely chairman of the House Financial Services Committee. Bachus has indicated his top priorities include GSE reform and oversight of the newly empowered CFTC and CFPA. The other important committee leadership changes for the industry will be Rep. Darrell Issa (R-CA) as the next chairman of the House Government Reform Committee, Rep. Dave Camp (R-MI) as the next chairman of the Ways and Means Committee, and Sen. Tim Johnson (D-SD) as the likely new chairman of the Senate Banking Committee.

Debt Panel Returns for Final Votes on Recommendations

Eight months ago President Obama created the bipartisan “National Commission on Fiscal Responsibility and Reform” charged with proposing spending cuts to Congress. Under the leadership of Erskine Bowles and former-Senator Alan Simpson (R-WY), the eighteen member panel will be reconvening next week to vote on final recommendations to Congress before the committee’s December 1st expiration date. However, expectations remain low that any plan can get the 14-vote supermajority required to send the spending cuts to Congress for a vote in December.

October Jobs Report Released

On Friday, the Department of Labor released its October jobs report showing the domestic economy added 151,000 jobs after four months of job losses. However, nearly 15 million people remain unemployed and actively looking, and the unemployment rate, which remained steady at 9.6 percent, has been relatively flat since May.

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