LEGAL
Counsel should be aware that the FTC and the DOJ recently issued antitrust compliance guidance for human resources (HR) professionals who hire or set compensation for employees. The agencies’ Antitrust Guidance for Human Resource Professionals is intended to inform HR professionals or employees involved in making hiring and compensation decisions of their obligations and restrictions under the antitrust laws.
Under the guidance, antitrust violations can arise when employers who compete to hire or retain employees:
The guidance points out that companies that compete for employees are competitors in the employment market, even if those companies do not make or market the same products or compete to provide the same services.
The guidance restates the agencies’ position in recent enforcement actions applying the antitrust laws to the employment marketplace. Although the agencies have brought only civil actions in the past for this conduct, the guidance states that the DOJ is prepared to bring criminal prosecutions against individuals, companies, or both for using wage-fixing and no-poaching agreements.
Counsel should ensure that HR professionals are aware of their obligations under the antitrust laws by:
For more information on antitrust compliance programs and policies, see Practice Note, Antitrust Compliance Programs and Standard Document, Antitrust Hypotheticals for Compliance Training: Dealings with Competitors.
Reporting companies subject to the pay ratio disclosure requirement in Section 953(b) of the Dodd-Frank Act and implemented by Item 402(u) of Regulation S-K should use the preparation of their annual reports and proxy or information statements for fiscal year 2016 as an opportunity to:
Subject to certain transition periods, reporting companies must disclose their pay ratio in 2018 covering their first full fiscal year beginning on or after January 1, 2017 in any filing subject to Item 402(u), including annual reports on Form 10-K, registration statements, and proxy and information statements. This disclosure requirement does not apply to foreign private issuers, emerging growth companies, smaller reporting companies, or registered investment companies.
Covered companies must disclose:
Recently, the SEC issued five new compliance and disclosure interpretations on pay ratio disclosure to clarify:
For more information on pay ratio disclosure, see Practice Note, The Pay Ratio Rule: Preparing for Compliance and Standard Document, Preparing for Pay Ratio Disclosure: Presentation Materials.
To minimize the risk of enhanced damages for patent infringement, companies should ensure that they respond proportionally to notices of potential patent infringement in light of a.
The Supreme Court held in Halo Electronics, Inc. v. Pulse Electronics, Inc. that district courts have discretion to enhance damages in cases of willful patent infringement, which typically involve egregious misconduct beyond garden-variety infringement. With the focus now on willfulness, companies should respond proportionally to any notice of potential patent infringement. A response calibrated to the particular patent infringement risk may help avoid or limit enhanced damages. For example, companies should consider obtaining a formal opinion from counsel in high-risk situations involving a detailed notice of infringement.
The Supreme Court did not address the respective roles of the jury and the judge in determining willfulness. The Federal Circuit has held post-Halo that the jury should continue to determine willfulness, but whether that rule is consistent with the enhanced damages statute and the Supreme Court’s Seventh Amendment jurisprudence is an open question. Another open question is whether the judge should defer to the jury’s willfulness finding in deciding whether to enhance damages. Counsel should consider preserving these issues for Federal Circuit or Supreme Court review.
For more information on the requirements of willful infringement claims, see Practice Note, Patent Litigation: Willful Infringement.
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