Someone asked my thoughts on “the most pressing issues facing corporate compliance officers and their companies . . . ” The request was for “two or three hot topics, and a brief paragraph describing why you believe each is relevant.”
I only know what I know (duh!), so there are surely many issues like Sarbanes-Oxley that were off my radar. I still think I came up with a few goodies (without cheating by looking at anyone else’s list — though I know I posted such a list earlier this year)
Here are my Big Three:
1) Electronic discovery and its impact on document retention policies, as well as on other aspects of IT and litigation management.
Electronic discovery is probably THE hot litigation topic. Costs of electronic evidence recovery and processing threaten to equal or exceed legal fees in some kinds of litigation, causing further pressures to settle cases that shouldn’t be settled.
Companies need to be prepared to respond efficiently and effectively to electronic discovery requests and to avoid spoliation charges. Ease of recovery of data that might be requested by oposing parties in litigation — or that may be useful to the company itself in litigation should be taken into account in evaluating and/or modifying IT systems and software.
2) Disparate impact and other employment class action litigation.
Plaintiffs’ employment lawyers are getting frustrated with individual cases. The yield from their effort is often not as lucrative as other areas of plaintiffs’ contingent fee litigation. Courts often grant summary judgment for employers. Actual damages in the form of back pay, benefits and court-awarded attorneys’ fees are often not enough to yield contingent fees that satisfy an ambitious lawyer’s upper-crust income and status desires.
Class actions involve a different calculus. Small cases become huge if enough employees are in the class. Pressure on employers to settle is much greater. A ruling on the merits on summary judgment is rare, because so much effort goes into preliminary sparring over class certification. And the practical precedent that is being set is that all employers eventually settle — for big, big bucks. Multi-million dollar fee awards are commonplace.
This increasing popularity of class actions means employer policies that affect large numbers of employees or applicants are now being scrutinized like they haven’t been since the 70s and 80’s. These include hiring, promotion, and overtime policies and practices.
3) Avoiding loss of valuable trade secrets and customer good will when employees leave.
While many longer-term unemployed may still find the job market tough, many valuable employees with jobs are being actively recruited by competitors. They may repay a company’s decision to keep them on while others were RIF-ed by grabbing a lucrative offer, quitting on little or no notice, and taking with them valuable company data — which they can easily do by saving it to a little keychain flash drive, emailing it to themselves, or using remote access privileges.
The convergence of heightened labor mobility, decreased employee loyalty, increased importance of intellectual property and good will in the service and information-based economy, and ease of data theft all combine to seriously challenge businesses to find new ways to avoid the harm to their competitiveness that can be caused by departing employees.
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So us plaintiffs’ attorneys are just a lot of money-grubbers, eh? :-)
Actually, I think you’ll find that many class action employment suits are filed not be firms that focus (can’t say “specialize” in my state) on employment law, but instead by those who concentrate on class action litigation. (Lieff-Cabraser comes to mind.)
Many employee rights attorneys are perfectly happy with the court-awarded fees that come with success on a Title VII, ADA, ADEA, etc. claim.