Riot Games, Maker Of “League Of Legends,” Required To Pay Female Employees Who Filed Class Action Suit From A Bank Of Over $10 Million, Per Leaked Reports

It’s widely known that man-on-woman sexual harassment and otherwise unfair treatment in the workplace has been far more prevalent than female-on-male, male-on-male, or female-on-female instances of sexual harassment and unfair workplace treatment. Although women still aren’t considered by many to be on the same platform or on equal footing with men, especially as far as treatment in the workplace is concerned – this consists of things like how much employees are paid and the likelihood of major companies’ boards of directors and executive suites being home to at least half females. As a matter of fact, most companies’ boards of directors and C-suites don’t even contain one-quarter female constituents.

While it is, in fact, true that men and women behave differently in the workplace – it’s also true that men and women are inherently different, as women are typically better at parenting thanks to their natural mothering tendencies and instincts, for example, meaning that they arguably shouldn’t end up being paid the same exact amount as their male counterparts – these differences aren’t nearly substantial enough to explain the modern American pay differential and the fact that most boards and C-suites contain mostly male members.

Riot Games, a major video game developer that is most widely known for “League of Legends,” has been commanded to split up at least $10 million across a cohort of female plaintiffs who were part of a class-action lawsuit that claimed they were systematically discriminated against as a direct result of their gender. It isn’t currently clear what the maximum payment amount, in total or for individual female plaintiffs, will be.

Although the aforementioned class act lawsuit was settled way, way back in August 2019, the Los Angeles Times just recently received official copies of relevant court documents from the handling of this case, including the judgement handed down by the judge who presided over the case between Riot Games and the body of allegedly-discriminated-against female employees.

Two workers – consisting of one now-former female employee of Riot Games and another who still works there – who sued the development agency on their own alleged under oath in a court of law that things like “phantom humping” and grabbing others’ crotches routinely was not dealt with and was rarely, if ever, actually punished.


Searching for Legal Problems in Executive Background Checks

Every year companies in the United States hire new executives. This is often done as a company grows and expands. The goal is always to improve leadership from a company’s top levels down to its lower levels. There has been research that shows over 40 percent of companies don’t put as much effort into screening their executives as they do their regular employees. Over 30 percent hire executives with no sort of due diligence or screening. Too many times, a lack of executive screening has ended up hurting a company.

Logical Fallacy
Too many people in the business world don’t see a need to screen executives. They assume an individual had to prove themselves to become an executive. It is believed their networks, backgrounds, histories will provide everything a company needs to know about an executive. This is known as a logical fallacy. It is important a company realizes executives can be just as guilty of the many types of issues affecting background checks of all potential employees. Many executives have fabricated their job experience. Some have claimed to have fictional degrees, others provide false work histories and more. There have also been attempts by executives to conceal prior criminal activity so they can gain access to a company.

When a company just assumes an executive candidate is being honest with them, they put their clients as well as business at serious risk. Companies often give a high level of power to an executive. When this power is put in the wrong hands, it has the potential to cost a company a significant amount of money. There have been executive candidates who have hidden prior sexual harassment cases, lied about their skills as well as failed to perform up to expectation and more.

Common Lies
Most executive candidates will tell the truth. When the few who tell lies provide information about themselves, there are some lies more common than others. Most of the fabrications are about their education, designations, training, employment history as well as certifications. Many people at the executive level are well-connected. This gives them an advantage when it comes to fabricating references as well as recommendations. When the lies of a company executive leak into the public domain, it can cause serious damage to a company’s reputation.

Public Relations Disaster
When a company hires an executive who has been deceptive with their background, it can turn into a public relations disaster. There will be individuals who know the truth about the executive’s deceptions. This could make them targets of attacks on social media and more. When this happens, companies are often left struggling to overcome what happened even after the deceptive executive has resigned.

Proper Background Check
Properly screening an executive candidate requires a different approach than with other types of employees. These employee screenings must be much more extensive. This involves utilizing all legal options available to confirm the information provided by them. It will begin by thorough basic verification of their identity. The next step will require confirming each previous employment situation. This will include validating the accuracy of the dates. It will also include confirming any information that could be easily fabricated. The verification of education should involve degree, educational awards, certifications, transcription and anything else associated with education no matter how small. Should there be any red flags that arise during this process, it could be an indication of serious issues that would require more intense screening.

Legal Research
Many databases ban electronic distribution of criminal data because of state and federal privacy laws. It is still possible to investigate all court records maintained at the federal, state and county level. This can be done at each location where an executive candidate has lived, worked and owned property. Many individuals have been the subject of civil lawsuits filed against them in jurisdictions where they previously lived or worked.

Financial History
If an executive candidate is being considered for a position where they will have significant authority, a company will want to know about the candidate’s spending habits. This could involve credit issues as well as bankruptcies, the debt they carry and more. A company doing research on executive candidates discovered 10 percent of the candidates they investigated had serious credit history issues. Over 5 percent were debtors in tax liens in their name or for a business they owned and more. These types of falsehoods are common because executive candidates know a company would be reluctant to hire someone with a history of financial irresponsibility.

A company that provides executive background checks, like Corporate Resolutions, could provide important research about an executive candidate. Having the right people in executive positions is essential for a company’s health. Performing proper due diligence is important for a successful recruiting and executive hiring process. The information obtained could confirm or reveal important things that need to be known about a high-level executive candidate.

Lawyer Jeremy Goldstein Discusses Executive Compensation

Executive compensation now depends on the mandatory advisory vote, so it is more important than ever that shareholders are involved in the corporate landscape. With this in mind, companies are having a hard time determining when, how and whether or not corporate directors need to discuss executive compensation with the shareholders. In this article, Jeremy Goldstein lists the factors that companies may want to consider that will help them decide these issues.

In general, the main spokesperson needs to be the chief executive officer. If the primary architect of the company’s strategy is always the chief executive officer, the company will always have a persistent theme. The exception may be when the topic being discussed is executive pay.

The board approves compensation for the chief executive officer and other executives. Therefore, the best people to discuss payment for these individuals may be board members. Also, investors believe that chief executives are highly interested in their own compensation. If board members engage with shareholders on questions of compensation, they will demonstrate to investors that they are fulfilling their duty of overseeing company business as well as showing support for the company’s programs.

In all, for the reasons stated above, board members may be the most appropriate people to discuss matters of executive compensation. This, of course, will depend on the facts and circumstances of each individual corporation.

The following components will help people decide whether or not a board member is the appropriate person to discuss executive pay:

  1. A Board Member Knowledgeable about Pay Programs

The most critical concern is whether or not the board member knows the subject at hand intimately. Shareholders are expected to engage in operations so that the company is trustworthy. It also helps to maintain credibility. A company will ensure that these goals are attained by choosing a spokesperson who deeply understands the executive pay program and can explain the reasoning behind it.

  1. The Topic that Is to Be Addressed

The topic that needs to be addressed will help you determine who the best person is to broach it. The best choice to speak with investors about the pay of a chief executive officer or other matters may be a director. If the topic will be a general compensation policy, someone other than the director may be a better choice.

  1. The Shareholders’ Preferences

One shareholder may wish to speak with one representative, but another may wish to converse with someone entirely different. There may be someone who would like to talk to compensation committee members, but sometimes, people do not want to talk to board members at all. The best way to encourage shareholder engagement is for a representative to be aware of each investor’s preference and go out of his or her way to serve those needs.

  1. The Individual/Shareholder

In most cases, a member of the compensation committee or the lead director/independent chairman will speak for the board when executive pay is being discussed. The compensation committee approves executive pay, so it may seem as if it is correct for the compensation committee chair to discuss executive pay. The fact is that the company wants to ensure that a singular message is always being given by the same person. Therefore, a lead director needs to be the one who is engaging with the shareholders. The best choice in this regard would be someone who is a member of the compensation committee and a lead director/independent chairman.

In the event that a director will be the one to discuss executive pay, these discussions must be one part of a larger communications strategy. If a shareholder needs to communicate with the directors, some companies have a corporate secretary who will deliver shareholder inquiries to the directors. Companies that have a director of corporate governance use this person for the purpose of sending messages to the directors.

Management and the board must come to an agreement on what types of topics the board will agree to discuss. These topics should only include items that are on the agenda. Directors must lead the conversation and not allow shareholders to steer the group into a discussion about financial performance and corporate strategy unless both sides have agreed to discuss these things before the meeting gets started.

Management has to be certain of two things, and they are the following:

  • Board engagement activities must be fully known.
  • Directors have all of the information that is needed to answer all investor questions. The messages must always be consistent with other corporate literature.

The company must decide beforehand whether or not management members will be allowed to be present at the meeting with investors. When this occurs, management will be informed about everything that was discussed. The head of investor relations, human resources executives, director of corporate governance and the general counsel are the most necessary attendees at these meetings. The directors will have the responsibility of informing the management team of the investors’ feedback whether the afore-mentioned individuals attend the meeting or not. This will ensure that full disclosure has been attained.

In order to keep from breaking securities laws, directors need to be familiar with Regulation F-D so that they do not inadvertently disclose information to investors that has not been disclosed to other market participants if their duty is to communicate with shareholders.

Headshot of Lawyer, Jeremy Goldstein
Jeremy Goldstein, Attorney at Law

About Jeremy Goldstein

Jeremy Goldstein was accepted at New York University School of Law where he received his Juris Doctor. He stayed close to this school after his graduation and is currently a member of the Professional Advisory Board for the NYU Journal of Law and Business.

Jeremy Goldstein was a partner in a major law firm with a focus on mergers and acquisitions early in his career. Some of the prominent cases he has been involved in include the acquisition of AT & T Corp. by SBC Communications, Inc. and the merger between Bank One Corporation and J.P. Morgan Chase & Company. He was also involved in Miller Brewing Company’s purchase of South African Breweries, PLC.

In 2014, Jeremy Goldstein founded Jeremy L. Goldstein and Associates, LLC. His practice focuses on executive pay as well as corporate governance issues. He counsels management groups, compensation committees and CEOs when they are in the process of undergoing corporate transitions and other difficult circumstances.

Jeremy Goldstein is a member of the American Bar Association Business Section. He is also the chair of the Mergers and Acquisitions Subcommittee. He supports mental health programs for people in his community as a member of the board of directors for The Fountain House.

Check him out on LinkedIn and

Read our previous Jeremy Goldstein post here.

Karl Heideck Explains Philadelphia’s Newest Employment Law

Workers’ rights advocates were happy the day that Mayor Kenney signed a new law that halts the practice of asking new employees to list their work histories. This means that Philadelphia is the first city in the country to enact this type of law in the private sector.

As may have been expected, not everyone was in favor of the changes. The law was set to be enforced, but the Chamber of Commerce for Greater Philadelphia took the matter to court because of the laws’ supposed unconstitutionality.

What Is in the Law?

The Society for Human Resource Management explained what is required by the law. According to the Society, legislators wrote the law as they did to close the gap between what men and women are paid. For example, the law states that employers must not consider job salary data acquired from an independent source without the job candidate’s permission.

Furthermore, employers may not directly ask potential employees how much money they were paid on previous jobs. They are also prohibited from requiring a candidate to inform them of his or her past salary history before an offer of employment will be made. Lastly, they are not allowed to punish an individual who does not provide them with his or her salary history.

Who Is Affected by this Law?

Some people have stated that employers whose headquarters exist outside of Philadelphia will be affected by this law. Every business owner in Philadelphia is subject to the law even if third parties are the ones who are performing the prohibited actions. Anyone who violates the ordinance will receive a fine of $2,000 per occurrence.

What Are the Setbacks?

Of course, voices rose up in opposition before the law was even passed. One company that suggested it would file a lawsuit against the city was Comcast Communications. This company stated that the law violated its First Amendment rights, and other companies have said that complying with the ordinance would be too burdensome.

The Chamber of Commerce also weighed in on this subject, and it filed a district court motion that sought a preliminary injunction. Since this occurred a little less than two months before the law was to go into effect, it was unclear whether or not the law would be enacted on time.

Because of the Chamber of Commerce’s filing, the Eastern District of Pennsylvania court made a determination to stay the law. Those in favor of the law thought that this ruling meant that employees’ rights would suffer in future disputes. In fact, this ruling was considered to be a catastrophic blow.

In June, Philadelphia filed a motion in court to dismiss the lawsuit because it did not state how business owners would be injured because of the law. Since the original complaint did not specify how the Chamber of Commerce’s members would be injured by the law, the district court agreed with the city.

Why this Ruling Made Sense

The Chamber of Commerce created a situation where the court could not respond to its filing because it did not identify any businesses that would be impacted negatively by the law. It doesn’t matter at this point whether the identifications would have led to an alteration of the law. The fact that the city was willing to listen to the concerns of the other side by agreeing to delay the ordinance may have helped the court decide on this matter.

It’s possible that there could be future challenges to this law. The court did allow the Chamber of Commerce to alter the complaint.

The Future for the Law

The Chamber of Commerce may never modify its complaint, but some business owners might decide to defy the ordinance. For example, the tools that real estate websites use to determine the prices of properties are extremely accurate these days. Because of this, employers can estimate how much a candidate must earn based on the area in which the person lives. Employers will not be able to ask ex-employers how much he or she paid a candidate, but Human Resources could compile monetary data garnered from public sources. Anyone who does these types of things may find new legislation on the books or even have penalties levied against them.

Every employer is not fighting this law tooth and nail. Some people are in favor of wage equity between males and females that the law wants to encourage, and they will support it. These employers will need to find new ways to comply with the law, and one way of doing this would be to modify their onboard training, interviewer scripts and job application forms.

Philadelphia is unique because it is the first to put a wage equity law on the books, but it will not be the last to do so. Employers are already starting to forgo asking about a candidate’s salary history, and states such as California, Massachusetts and Washington, D.C. are writing wage equity legislation now. Companies that have questions about the various state and federal employment laws need to consult with a compliance specialist to ensure that they are following all of the rules.

Like Karl Heideck on Facebook.

About Karl Heideck

Karl Heideck became a contract attorney for Hire Counsel in 2015. Before he joined Hire Counsel, he gained experience practicing law in the Greater Philadelphia area. During that time, he was a project attorney and spent the years filing complaints and responding to them as well. Currently, Karl Heideck offers compliance consulting and risk advisement services. He is also involved in employment proceedings, product liability and corporate law.

Karl Heideck graduated from Swarthmore College in 2003 with a Bachelor of Arts degree in English and Literature. In 2009, he received his Juris Doctor with honors from Temple University’s James E. Beasley School of Law.

Keep Reading:   Career Spotlight: Litigation with Karl Heideck

Tiger Woods Begins First-Offender Program After Convicted DUI

On May 29th, Tiger Woods was arrested in Florida for a suspicion of driving under the influence of alcohol. Wood’s arraignment charge was scheduled for Wednesday, August 9, 2017 but was then moved to October 25, 2017. Woods was not present at the courthouse and no plea was entered by him. When a defendant enters the first-offender program, the state will drop the DUI charge and the defendant must plead guilty to a lesser charge such as reckless driving. Once Woods enters the program, he must complete DUI school, probation, and there will be a ban on alcohol and drug consumption. The first-offender program does not expunge the defendants record, rather it shows up with no guilty conviction. If the defendant fails to complete the program, he will have a second-degree misdemeanor charge on his record. On May 29th, Woods was found sleeping in his 2015 Mercedes Benz on the side of the road. The vehicle was running and the turn signal was left on. Police reported a tail light not working as well as damage to the rear bumper. There were no signs of an accident or any property damage. When police approached Woods, he was unconscious and not wearing a seatbelt. Police woke the defendant up and stated that he was slurring his words. The defendant was cooperative and completed a field sobriety test. When asked if he had been drinking, he said no. Woods claims that he had a reaction to the medication that he has been taking for his back pain. Police performed a breathalyzer test and Woods registered a 0.000, and he also completed a urine test. Woods made a statement on social media stating that he was receiving professional help to manage his medication for back pain as well as his sleep disorder. Woods also announced that he completed an out-of-state private intensive program.

U.S. Justice Department Reverses Anti-Discrimination Laws Against Gay Employees

The LGBTQ was recently hit with a severe blow to their civil rights fight, when the United States Department of Justice reversed a decision that had advanced their protections. In a statement made to the U.S. appeals court, the Trump Administration reversed former President Barack Obama’s decision that federal law bans discrimination against gay employees.
Gay Employees Are No Longer A Protected Class
Issuing a friend of the court brief, the Department of Justice explained that Congress never intended for Title VII of the U.S. Constitution to apply to gay workers. The amendment mentioned in the 2nd U.S. Circuit Court of Appeals briefing refers to a clause that prohibits acts of sexual harassment in the workplace.
The briefing also called into question the authority of the U.S. Equal Employment Opportunity Commission, a federal agency which has been advocating against discrimination and harassment of employees on the basis of sexual orientation. The Justice Department urged the court to stop deferring to the Equal Employment Opportunity Commission in matters related to gender identity and orientation.
It has been noted that this brief was issued only a short time after President Trump issued his ban of transgenders in the military, but Justice Department spokesman Devin O’Malley says the brief was instigated by other concerns. Specifically, Mr. O’Malley cites rulings from 10 high level appeals courts, which back up the claims made by the justice department.
Donald Zarda Initiated A New Discrimination Lawsuit
In writing the brief, the Department of Justice denied the court’s authority in expanding upon laws established by congress.
The statement was issued in support of Altitude Express Inc., a New York based skydiving company facing a civil suit from former employee, Donald Zarda. In the suit, Mr. Zarda claimed that he was fired by the company, after revealing that he was gay to a customer. When the customer complained to management, Donald was fired.
A short time after filing the suit, Mr. Zarda was killed in a skydiving accident.
The Justice Department’s statement says sexual discrimination only applies to gender and not orientation. Citing an example, the brief states that an employer would be guilty of discrimination through the termination of all male employees or all female employees.
According to the statement, discrimination is based on sex, where as an objection to homosexuality is based on personal or religious belief. There is currently no law prohibiting discrimination based on moral or personal objections, stated the U.S. Department of Justice.

Trump Bans Transgender Americans From Serving in the Military

Donald Trump took to Twitter again to announce barring all transgender individuals from serving in the military. The tweet stated people who are transgender cannot serve in the military in any capacity. Trump also stated that he came to the decision after consultation with his generals, military experts and legal professionals.

According to Trump, the military’s only focus should be “decisive” and “overwhelming” victory over enemies of the United States. The tweet went on to say that the medical costs and disruption over allowing transgender individuals to serve in the military is too much of a problem. According to, members of Defense Secretary James Mattis’ staff were not aware of this ruling and were caught by surprise.

The defense department refuses to release statistics on how many transgender Americans currently serve in the military. However, estimates by Rand Corp. show that 2,500 to 7,500 people who are transgender currently serve on active duty and another 1,500 to 4,000 are in the National Guard or the reserves.

Many of Trump’s critics immediately responded to the action, calling it “cruel and arbitrary”, and a ridiculous attempt to humiliate transgender Americans. Members of the LGBTQ community call the decision “absurd” and another overstep by Trump. An organization that represents the LGBTQ community in the military threatened legal action if the Trump administration does not immediately reverse the decision. Outserve-SLDN stated that many transgender Americans currently serving have not caused any problems or issues, and those individuals often consider the military a last resort for gainful employment.

Conservative lawmakers and Trump supporters applauded the decision, calling it the first step in eliminating the need to use the military for social experimentation. Ash Carter, the former secretary of defense under President Obama, ended the ban on transgender individuals serving in the U.S. military on Oct. 1st of last year.

Job Market for Law Students

At one time, becoming a lawyer was one of the best careers that anyone could choose. However, many law students today are graduating into a market that is saturated with new graduates. This is concerning for several reasons. First of all, some people are not going to be able to land jobs in their field. In addition, this is going to prevent people from joining the field in the future as wages go down.

Law school costs a lot of money to complete. With some of the changes that are taking place in the market today, many people are struggling to get to a new level. The worst combination is a bad job market with a lot of debt. Here are some of the issues that law students are facing.


One of the biggest issues with going to law school is all of the debt that students take on. There are a lot of students today who are graduating with record levels of debt. The good thing about becoming a lawyer is that the starting salaries are usually really high. This makes the payoff process a lot easier in the future.

The problem is that many students are not getting those jobs that they did in the past. Many students cannot afford to buy a home or start a family. There is an entire generation of people who are now stuck financially because of what is going on in the job market. In the coming years, it is vital for law schools to start addressing these issues.

Finding a Job

It can be difficult to find a job in this field. However, there are several things that you can do today to stand out from other job candidates. In the coming years, the jobs problem is only going to get worse. Students should start working in an internship as soon as they can in order to have success landing a job after graduation. Getting practical experience is one of the best things that anyone can do during this time.

Future Trends

The trends in the legal job field look bleak. A lot of students who are currently in school are looking for other careers to take on. With all of the changes happening today, it is vital for students to continue looking for ways to improve their financial position by landing a great job in their chosen field.


Jeremy Goldstein Explains The Mystery Of Severance Pay

In today’s unpredictable and competitive employment market, one common concern among employees everywhere is severance pay. Although many people believe that professional jobs automatically come with severance pay, this is not always the case. For those who are job hunting or are concerned about being fired from a professional job, it is important to understand how severance pay works and when it is applicable.



Severance Pay And The Law

Not all companies are not required by law to provide severance pay. If an employee leaves a job voluntarily, the Fair Labor Standards Act mandates that the worker must be paid his or her wages through the date of completion. Also, the worker is entitled to be paid for any vacation accrual. A severance sum is not mandated by the FLSA. Employers may offer severance pay if they choose to do so. It may be offered to employees on a certain level or all employees of a company. If severance is paid, it is often paid through an agreement between the employee and the employer or a union.


In the event of a mass layoff, employers are required by the Worker Adjustment and Retraining Notification Act to notify workers 60 days in advance. If the employer does not or cannot provide notice within that period, the employer is required to pay the workers their regular salary and benefits for 60 days. For example, a company that is closing in 30 days and must lay off workers would still have to pay the workers for 30 days beyond the closing date. If a company promises severance pay in its employee handbook or through an employment contract, the company is required to honor its commitment. Employees who receive a severance benefit are usually required to sign a contract from the employer that liberates the employer from any future legal claims or liabilities.


Another common requirement that accompanies severance release forms is an age discrimination release form. Anyone who is over the age of 40 is usually required to sign this form since some people file lawsuits under the Age Discrimination in Employment Act. Employees who are over the age of 40 and are presented with a severance option have 21 days to decide whether or not to accept the offer under federal law. However, employees have 45 days to consider the offer if more than one person is being laid off at the same time and at least two of the workers are over the age of 40. This is because more than one person being laid off at a time is considered a group layoff.



How Severance Is Paid

Most large companies offer severance in the form of one lump payment. In some instances, severance is calculated based on continuing salary for a certain period. When this is the case, severance may be distributed in several payments. A lump sum is the best option to accept if an employer offers multiple choices for payment. When payments are received in multiple increments, some employers provide a larger payment upfront followed by diminishing payments until there is nothing left to pay.


One benefit of receiving multiple payments is continuing health insurance. In some instances, an employer will pay the severed employee’s health coverage until severance pay runs out. Employees can ask about this before accepting a payment structure. Although workers are often allowed under the Consolidated Omnibus Budget Reconciliation Act to continue receiving health benefits from a former employer for up to 18 months, they are usually required to pay the premiums themselves. Many group plans have expensive individual premiums. Some workers who know that they will be laid off may be able to negotiate with an employer to have the company continue paying for health benefits for a certain period.


When calculating severance pay, employers usually base it on the worker’s salary and invested years. For example, many large companies that employ top-level executives offer about three weeks of severance pay for every year of work. This means that an executive who worked for a firm for 10 years may receive a severance package that includes between 25 and 30 weeks of pay. For lower-level employees, severance pay is usually equal to less than two weeks of pay for every year spent at the company. In many instances, severance pay comes with a year number cap. This varies from one company to another and may also vary based on an employee’s position.


Severance pay is taxed. Receiving a lump sum could put a person in a higher tax bracket. Many workers benefit from contacting a tax professional before accepting a payment option when they are presented with more than one choice. When being laid off, workers can also try to recoup reimbursement for travel expenses, sick time or unused vacation time. Additional benefits such as 401(k) contributions and others may be kept by the employee.



About Jeremy Goldstein

Jeremy Goldstein is a partner at Jeremy Goldstein, LLC. His firm serves the greater New York City area. Mr. Goldstein earned a bachelor’s degree in history from Cornell University in 1995. He earned a master’s degree in history from the University of Chicago in 1996. In 1999, he earned his law degree from the New York University School of Law. Jeremy Goldstein volunteers his time as a director at Fountain House in New York. The non-profit organization helps men and women receive treatment for mental health issues.


In the past, Mr. Goldstein served as a partner for 14 years with another firm. He gained valuable experience in executive compensation with a focus on issues related to mergers and acquisitions. Additionally, he has extensive experience in executive compensation in relation to corporate governance. Jeremy Goldstein is also a member of several prestigious associations related to corporate governance and executive compensation.

Jeremy has contributed before on our blog. Read his opinions on stock options for employees:

Learn more:

Follow Jeremy Goldstein on Facebook and @jgoldsteinlaw1

Supreme Court Limits Where Companies Can Be Sued

There is an interesting article on the Reuters website about how the Supreme Court of the United States has made an important ruling concerning in what states plaintiffs may file injury lawsuits against corporations. The court made an 8-1 decision to put limits on where lawsuits can be filed, which is good news for companies that want to prevent plaintiffs suing them from picking the most advantageous state. More specifically, the case involved out-of-state plaintiffs suing Bristol-Myers Squibb in California although the alleged injuries by the pharmaceutical company did not all occur there and the company is based elsewhere.

The ruling was good news for the Johnson & Johnson company, which is being sued in Missouri state courts despite the corporation being headquartered in New Jersey. Furthermore, a similar ruling by the Supreme Court on May 30th regarding out-of-state plaintiffs suing Texas-based BNSF Railway Co. will likely make corporations more secure that they won’t be sued in states where they are not based. As always, however, plaintiffs retain the right to bring cases against corporations in whatever state they are located. Therefore, the ruling limits the ability of plaintiffs to “shop around,” but it is still very possible to hold corporations liable in court when they are at fault.

The lone dissenting justice was Sonia Sotomayor. Essentially, she feels that the ruling puts too much burden on people who have suffered at the hands of negligent companies. She appears to believe that, because corporations sell products all over the country and not just in the states where they are based, they should be held accountable wherever their products do harm. In the Bristol-Myers Squibb case, the company actually sold nearly one billion dollars of their drug Plavix – the drug alleged to have done harm – in the State of California, so the suit was brought in that state.

The Gig Economy is Harmful to Consumers and Workers

Unpredictability in the work place has become harsh reality for many workers. We now have a gig economy, and it is growing rapidly and changing the nature of the employer-employee relationship. According to a report from the Government Accountability Office, gigs now comprise 40 percent of these nontraditional jobs.

In a report by, the emergence of the gig economy is the result of changes in the work environment. According to a survey from the Pew Research Center, millennials wanted to focus more on satisfying themselves, having more free time and having more control and flexibility over their work schedules. As a consequence, employers cut back on medical coverage, retirement plans and many other benefits from social safety nets.

The recession from 2007 through 2009 brought another reality problem. Employers began to hire more people as independent contractors to save money. These jobs did not offer vacation days, workers’ compensation, paid sick leave, retirement programs or death benefits for anyone killed on the job. As the unemployed scrambled for jobs, these temporary gigs were often the only jobs available.

The Department of Labor regulates employers to make sure they are in compliance with federal and state labor laws. There are minimum worker safety standards established by the Occupational Safety and Health Administration. These regulations protect workers by defining safe workday time limits, creating mandatory rest breaks and obligatory reporting of accidents. Violations of these regulations will subject employers to serious penalties.

Gig employees are not provided with these same safety protections. There are no limits for hours at work and no mandatory rest breaks. The absence of these controls can subject gig workers to exhaustion and fatigue.

Employers do not like to train gig workers because this could be construed as exercising too much control over them, and they could become reclassified as full-time employees entitled to all benefits. This absence of training can lead to an unsafe work environment.

Employers do not get to decide who is an independent contractor and who is a full-time employee. There are laws and court rulings from cases that define the characteristics of a gig worker.

The case of S.G. Borrello & Sons, Inc. v. Department of Industrial Relations established the criteria in 1989 for determining which workers are independent contractors. This case considered who controlled the details of the work, who provided the tools needed for the job, the form of payment and the length of the term of employment. These factors have become the tests applied to gig workers to determine whether the employer is obligated to provide benefits or not.

Law School Debt

One of the biggest issues facing students today is student loan debt. A lot of students are going into a career field that they believe will lead to high pay and great benefits. However, a lot of these industries are not growing at all. There are many people who are struggling financially because of this.

At one time, becoming a lawyer was one of the best things that any young person could do. However, a lot of people today are finding that the legal industry is saturated with people who have already graduated from law school. It is vital for students to understand these trends before they spend all of that time and money trying to get a job in this field.

Cost of School

Any additional degree program is going to cost a lot of money. The biggest problem with law school is that it is long and costs a lot of money. Just because a student graduates from law school, this does not mean that they will pass the BAR exam. Not only that, but passing the exam does not guarantee a job in the field.

Over time, students have to look at the cost versus the benefits of getting what they want. There are many people who are excited about the changes that are going on in the industry today, but these changes are not necessarily great for new graduates.

Student Loans

There are a lot of students who are graduating from law school with high levels of student loan debt. This becomes a major financial issue for them later on in life. Not only that, but many graduates end up joining a different field where the pay is not as high. For many graduates, they are stuck with student loan payments without having a high salary. This is not a good place to be in, especially when it comes to buying a home or raising a family.

Future Trends

In the coming years, many people are hoping that the overall cost of college will go down. However, few people actually think that this will be the case. Many students are tired of paying high fees just to get a law degree without having better job prospects.

There are many people who believe that the legal field is going to have a shortage of graduates in the years ahead. It will be interesting to see how the industry responds.

Karl Heideck’s Guide to Pennsylvania Employment Law for Small Businesses

Do you operate a Pennsylvania business? There are a few things that you need to keep in mind regarding your workforce. Although labor laws are constantly evolving, it’s critical that you stay ahead of the curve. Here’s how employment regulations influence your compliance obligations and corporate future.

Critical Laws That Impact Pennsylvanian Companies

Employment law has a broad scope that touches on a vast range of practices. Some of the regulations that bind you may be specific to your industry or business model. For instance, if you employ legal minors, or individuals under the age of 18, then you’ll need to adhere to the Pennsylvania Child Labor Law, or CLL.

Other provisions are more broadly applicable regardless who’s in your workforce. Understand these critical rules:

Minimum Wage and Labor Practices: The Fair Labor Standards Act

This law, also known as the FLSA, lays down the rules for when you need to pay your employees minimum wage. It also covers overtime, your tabulation and recording of work hours, and your duty to post FLSA requirements visibly at your premises.

Although the FLSA governs the minimum wage, it’s important to remember that these federal rules don’t override state laws. For instance, as of June 2017, most Pennsylvanian workers who earned minimum wage received the same $7.25 hourly rate that the FLSA set. Since 2016, however, individuals who worked for the state’s government or contractors that bid on state jobs earned $10.15 when making minimum wage. If you’re unsure whether you need to pay federal or state minimum wage, the general rule is to pick the higher of the two.

The Family and Medical Leave Act

Also known as the FMLA, this federal law ensures that eligible employees are allowed to take leave when it’s related to their family or medical needs. During someone’s FMLA leave, you don’t have to pay them, but you can’t penalize them by firing them from their job or cut back their group health insurance eligibility.

Employees covered by the FMLA may take as many as 12 weeks of unpaid leave per year. Valid reasons for taking leave include when workers

  • Need to care for their children, parents or spouses who have serious health problems,
  • Are having a new baby or need to care for one who was born less than a year ago,
  • Are adopting or foster parenting a new child,
  • Can’t perform their job due to their own serious health issues, or
  • Have military spouses, offspring or parents who get injured.

The Age Discrimination in Employment Act

Employees are getting older, and employers must afford elderly workers the same rights that they’d grant their younger counterparts. If you fail to do so, you could face discrimination lawsuits or fines.

The Age Discrimination in Employment Act, or ADEA, dates back to 1967. It was originally intended to stop bosses who employ more than 20 people from discriminating against workers above the age of 40. Navigating this law isn’t as simple as determining whether you meet these basic tenets, however. For instance, if you operate a consumer research organization, then you may have a valid reason for restricting certain employment offers based on applicants’ ages or other demographics.

The ADEA applies to government institutions and contractors. As workforces grow progressively older, however, legislators may expand the law to protect more employees.

IRS Worker Classification

Should you withhold income and Social Security taxes from your workers’ paychecks? There’s a big difference between part-timers and independent contractors. Bodies like the IRS apply various rubrics to gauge how much control you exert over your workers and determine whether they should be classified as employees.

It’s critical that you understand these distinctions so that you don’t fall afoul of tax regulations. Also, remember that the federal unemployment taxes, or FUTA, that you must pay the IRS are separate from the sums required by the state’s unemployment contribution law.

Hiring, Harassment and Discrimination: Equal Employment Laws

While the federal Equal Employment Opportunities Commission, or EEOC, may be the first agency you think of when it comes to employment discrimination claims, it’s not the only body with jurisdiction. The Pennsylvania Human Relations Commission, or PHRC, also fields claims, and the state’s Human Relations Act may mean that you’re subject to anti-discrimination guidelines that the EEOC excludes.

The PHRC typically deals with companies that have between 4 and 14 workers, but the EEOC handles enterprises with at least 15. Both prohibit hiring and employment discrimination based on protected classes, like race, religion, sex, national origin, disability and age.

Situation-specific Laws

In addition to state-level laws, federal legislation and rules that only impact your industry, you may be subject to statutes imposed by your city, county or township. For instance, in 2017, Philadelphia barred employers who do business in the city from asking about new hires’ wage histories.

Employment law is exceedingly complex, but this isn’t an excuse for falling behind. Many small business owners find it helpful to consult with legal experts about their obligations.

More by Karl Heideck:  Career Spotlight: Litigation with Karl Heideck

About Karl Heideck

Karl Heideck is a Philadelphia-based contract attorney who works hard to help businesses do right by their employees. Karl Heideck firmly believes in assisting firms that strive to adhere to the spirit of the law and not just its letter.

Karl Heideck has practiced in various fields of employment and contract law for more than a decade. In addition to coming directly to the aid of companies that would otherwise struggle to master the complex nuances of their regulatory obligations, he routinely contributes to online news sources and blogs by explaining the evolution of Pennsylvanian law and its impact on businesses.

During the time he spent as a Pepper Hamilton LLP project attorney and a Conrad O’Brien associate, Mr. Heideck gained invaluable experience fighting for enterprises and individuals alike. Karl always looks forward to applying his exhaustive knowledge in challenging new cases.

For more information, connect with Karl Heideck on Twitter, Facebook or LinkedIn.

Excessive Fee Litigation by Mutual Funds Face Serious Implications with the Passing of the Financial CHOICE Act by the House

The passing of the Financial CHOICE Act (H.R. 10) on June 8, 2017, along House party lines aims to replace and repeal several clauses of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The Financial CHOICE Act is a big reform for financial regulation which will contain possible amendments to section 36(b) of the 1940 Act that will raise the burden of proof and heighten the standards of pleading for plaintiffs in situations of litigation fee that are excessive. It was passed 233-186 along the party divide.

Investment advisers face a fiduciary duty imposed by section 36(b) instead of the compensation they receive for the advisory services they provide to funds which give the shareholders of the funds a private action right to enforce the duty against all the affiliates and their advisers who receive the compensations from the funds. By a preponderance of the available evidence, the burden of proof will be on the plaintiffs who will be required to show that the fee they pay for advice is excessive. In other words, they will need to give evidence that the services the defendant rendered and the fee charged are so disproportionate that they do not bear any relationship, and that the negotiations could not take place at an arm’s length.

Therefore, the Financial CHOICE Act will impose a requirement that under Section 36(b) any complaint brought should state all the peculiar facts that establish a breach of fiduciary duty, and to prove that if any such alleged facts are based on existing beliefs and information, the complainant shall use all means to state the peculiarities on which the facts and opinions are based or on which the opinion are formed. Apart from the raised or stricter standards of pleading that the complainants will have to face, the plaintiffs will also be confronted by heightened burden of proof imposed by the Act from a state of legal “preponderance of the evidence” to a legally acceptable state of “convincing and unequivocal evidence.”

The new rules will not make the playing field any simpler for all the parties involved, and in the event of a process of litigation, it is clear that the cases will be long-drawn and complicated. Under the Financial Choice Act, the shareholder of a fund will have the burden to prove that there was a breach of fiduciary duty by convincing and clear evidence.


Trump’s Justice Appointed, Debate Over Travel Ban Rages On

The travel ban, or immigration pause as the lawyers are calling it, has been held up in court once again. As this is being weighed, Donald Trump visited the Supreme Court this last week to attend the appointment of his newly-appointed justice, Neil Gorsuch.

Donald and Melania Trump attended, but did not speak at, the event honoring the appointment of Gorsuch to the nation’s highest court. Justice John Roberts offered Trump favorable words in his opening comments.

Gorsuch has been the subject of controversy for some time, since the only reason he was able to be appointed was that the Republican-led Senate refused to consider Obama’s pick for justice, Merrick Garland, for most of last year.

As the 5-4 conservative majority is now restored, things may be looking up for Trump’s travel ban which is slated to be weighed by the justices on its constitutionality. The court is also looking at a request to allow the ban to go into effect preemptively until litigation can be thoroughly carried out. It’s possible that Gorsuch may be the linchpin in these proceedings in favor of the Trump administration.

Federal judges in Hawaii and Maryland have blocked the travel ban, calling it unconstitutional and clearly a religious ban, despite the rhetoric of the Trump administration. The appeals process has now sent that up the pipeline to the Supreme Court and its newly-appointed justice.

While justices are supposed to be apolitical and judge solely on the legality of a matter, the fact of the matter is the political and judicial worlds are far more entangled than many may think. A justice newly appointed by Trump may also be more likely to assist in pushing through a Trump agenda, but there’s no way of knowing for sure until litigation is completed.

The Trump administration currently has a lot of legal battles to fight. Trump is also under investigation by a special committee for obstruction of justice in his recent firing of James Comey.