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With approximately 60,000 employees participating in its 401(k) program, Morgan Stanley should be positioned to offer an outstanding retirement investment package. However, a group of employees is now seeking class action status as they sue the investment firm for mismanagement of the company’s 401(k) plan.

Balance in digital background / A concept of technology law or tIn the complaint, plaintiff Robert Patterson alleges that Morgan Stanley only made poorly performing investments available in its 401(k) program. The suit argues that instead of abiding by the Employee Retirement Income Security Act, which states that employers have a fiduciary responsibility to act in the best interests of plan members, Morgan Stanley routinely chose to include some of its least successful funds in the company 401(k).For instance, the available mid-cap fund was Morgan Stanley’s own Institutional Mid-Cap Growth Fund. Investment advisory firm Morningstar, Inc., gave this fund the worst rating for investors who held an interest in the fund over a period of several years. The small-cap fund that Morgan Stanley offered to its employees fared even worse. It underperformed 99 percent of all similar funds in 2014, and its performance didn’t improve much in the subsequent year.

Moreover, the lawsuit claims that Morgan Stanley was charging outrageous fees. Patterson and his co-plaintiffs allege that Morgan Stanley was charging their employees considerably more than outside clients were being charged. In some cases, employees were charged twice the going rate for outside clients.

In the complaint, lawyers for the plaintiffs argue that the company “selected their proprietary funds not based on their merits as investments, or because doing so was in the interest of plan participants, but because these products provided significant revenues and profits to Morgan Stanley.”

Other financial management firms like Edward Jones and Franklin Templeton have been hit with similar lawsuits in recent months. Several high-profile educational institutions like Yale University, the Massachusetts Institute of Technology and Johns Hopkins University have also been accused of similar mismanagement. With lawsuits like these on the rise, it is more important than ever before for employers to ensure that their 401(k) plans comply with ERISA and other applicable legislation.

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Judge R. Gary Klausner has ruled that Led Zeppelin may not collect almost $800,000 in defense fees from the plaintiffs in a recent copyright lawsuit. Earlier, the copyright infringement case was settled in the band’s favor.

monumentThe lawsuit centered around the band’s most successful song, “Stairway to Heaven.” Songwriter and guitarist Randy Wolfe had long harbored suspicions that the better-known rockers had lifted the introduction of his 1968 instrumental composition “Taurus,” to be used in their hit. Wolfe passed away in 1997, but his trust filed the lawsuit in 2014. If the suit had been decided in the plaintiff’s favor, the trust might have received several million dollars. Estimates suggested that the song has generated more than $500 million thanks to its popularity.

The jury decided in Led Zeppelin’s favor. However, Jimmy Page and Robert Plant along with Warner/Chappell Music, the song’s publishing company, had expended considerable money in fighting the lawsuit. Once they prevailed, they decided that they were entitled to recoup those expenses from the unsuccessful plaintiff.

Ultimately, Judge Klausner found that the songwriters and publishing company were not entitled to legal fees and miscellaneous costs related to their defense because the initial lawsuit was not frivolous. The defendants contended that the lawsuit was merely an attempt to obtain easy money from famous musicians and that an award of legal fees to the defendants would discourage other potential plaintiffs from embarking on similar efforts.

The judge was not swayed by these arguments, stating that he had found sufficient validity in the lawsuit to allow it to go to trial. By definition, this meant that the suit could not be categorized as frivolous. Moreover, the judge asserted that there was no evidence suggesting that the Wolfe trustee had acted with “nefarious motives.”

The Led Zeppelin copyright infringement lawsuit contains many fascinating and instructive components. The most important of these may be how crucial it is to preserve and defend intellectual property rights. Whether you are an inventor or are being accused of profiting from someone’s else’s innovation, you need competent legal counsel to protect yourself.

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Most people think Snapchat is just a fun messaging app. They use it to send photos and videos that self-destruct seconds after being viewed. Snapchat also features an app that makes it possible to creatively alter photographs. Known as “Lenses,” this app is what makes it possible for the photo’s subject to sport floppy dog ears, hearts instead of eyes or a floral headband. Now, this capability is at the center of a potential class action lawsuit.

Magnified illustration with the word Social Media on white background.

Illinois residents Jose Martinez and Malcolm Neal filed a complaint in Los Angeles in May of 2016, arguing that Snapchat violated their state’s Biometric Information Privacy Act. The law is aimed at preventing biometric identifiers from falling into questionable hands and sprang from concerns about how the necessary technology used to collect biometric identifiers might be used without the user’s knowledge or permission.

The lawsuit contends that Snapchat is collecting and maintaining detailed biometric information on their customers. This is being done without the knowledge and consent of the users, which is contrary to Illinois’ law.

Snapchat categorically denies the allegations, arguing that their service is not capable of collecting complex biometric information that would allow them to identify the face of one user as opposed to another. Instead, they say that the technology involved is merely for object recognition, which makes it possible for the program to determine which objects in a photo are faces and where the eyes, nose and mouth are located. Moreover, Snapchat denies that they are in any way storing the data that is used in the Lenses app.

Snapchat is not the first social media platform to be sued over similar technology. Both Facebook and Google are facing legal battles relating to face-recognition software that automatically identifies particular people in photographs.

This lawsuit is only in its beginning stages. It was moved to the federal courts in July 2016, and Snapchat may be facing stiff fines if their software is determined to be guilty of violating Illinois’ law. This incident demonstrates the powerful need for businesses to understand the laws of states where they will be operating.

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Well-known clothing retailer Abercrombie & Fitch has taken plenty of media heat thanks to its restrictive “look policy.” At one time, they dictated everything from the length of employees’ fingernails to the color of their hair. In addition, employees were required to purchase clothes from the retailer.

Lawsuit word breaking through red glass to illustrate legal action brought by a plantiff against a defendant in a court of law through opposing lawers or attorneys

Abercrombie & Fitch is now being sued for this aspect of their look policy. Judge Jesus Bernal recently ruled that a lawsuit that was originally filed by two former employees could move forward as a class action. The class could potentially have thousands of members, making this case much more significant, and possibly much more costly, if the plaintiffs prevail.

At the heart of the lawsuit is the store’s policy that required its approximately 62,000 employees to exclusively buy their work attire through the brand. The complaint, which was filed in California, notes that workers were expected to purchase clothes at least five times per year to coincide with the seasonal fashions found in the stores. Allegedly, all employees were given a “style booklet” outlining what they were supposed to buy and how it should be worn.

The complaint claims that this policy caused the hourly pay rate to fall below minimum wage. At the same time, the plaintiffs say that Abercrombie benefited from the policy. Although employees received a discount on their purchases, the retailer nonetheless made a substantial profit through requiring workers to shop there. Moreover, employees working on the sales floor were considered “models” who were displaying the store’s latest fashions. This enticed customers to spend more money to attain the same look that employees were wearing.

Abercrombie has already drawn fire for refusing to hire a Muslim female who needed to wear a hajib and for firing another worker who had a prosthetic arm. Their situation provides a helpful reminder for other employers that employee dress codes need to be well thought-out and reasonable. Most importantly, they should be in line with the law and all Constitutional rights. It is a wise idea to have an experienced attorney review a dress code policy to minimize the opportunities for litigation.

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Sometimes, the only appropriate way to respond to a lawsuit is by filing a countersuit. At least, that seems to be the philosophy of Groupon, Inc. The story began a few months ago when International Business Machines, better known as IBM, filed a lawsuit against Groupon. IBM claimed that Groupon, which is an e-commerce marketplace that connects subscribers with merchants in their local area, infringed four of its patents.

Balance in digital background / A concept of technology law or tIBM claimed that at least two patents that are related to its late-1980s telecommunications service Prodigy are clearly infringed by the technology upon which Groupon bases its services. In their complaint, IBM asserts that they deserve compensation from Groupon for the newer company’s use of IBM’s patented technology. An IBM spokesperson notes, “Over the past three years, IBM has attempted to conclude a fair and reasonable patent license agreement with Groupon.” Frustrated in these efforts, IBM filed a lawsuit in Delaware where the company is organized.

Groupon chose to file a countersuit in Illinois, where it has its home base in Chicago. Among other charges in the complaint, Groupon skewers IBM as a “relic of once-great 20th Century technology firms.” Moreover, Groupon asserts that the technology giant “has now resorted to usurping the intellectual property of companies born this millennium.” A spokesperson from Groupon said in an emailed statement to journalists that: “Unfortunately, IBM is trying to shed its status as a dial-up-era dinosaur by infringing on the intellectual property rights of current technology companies, like Groupon.”

Groupon alleges in its countersuit that IBM actually infringes its patented technology with its WebSphere Commerce software. Merchants can use WebSphere to track customer orders and sales as well as offer special deals and pricing based on the customer’s current geographic location. Groupon insists that much of this technology has already been patented by them, which entitles them to royalties from the “billions of dollars in revenue that IBM has received” from their unfair use of Groupon’s technology.

The outcome of these cases remains pending, but the situation highlights the need to protect intellectual property and perform appropriate due diligence before developing new technology.

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Home improvement retail giant Lowe’s has agreed to pay an $8.6 million settlement to disabled workers that the company fired. The agreement was reached after the federal government’s Equal Employment Opportunity Commission filed a lawsuit against the company in California.

Gardne center worker in a wheelchair holding a flower pot in a greenhouse

The settlement money will be distributed to former Lowe’s employees who were fired from the company between January 1, 2004 and May 13, 2010. Eligible employees were terminated after exceeding the company’s 180-day or 240-day medical leave policy. All of the affected employees were either disabled, “regarded as” disabled or were associated with someone who was disabled.

While Lowe’s stipulated a maximum leave policy of either 180 days or 240 days, officials with the EEOC argued that the policy was not in line with the Americans with Disabilities Act, or ADA. In fact, the EEOC charged that Lowe’s “engaged in a pattern and practice of discrimination” against employees who were disabled. Moreover, the lawsuit argued that Lowe’s routinely failed to provide adequate accommodations for disabled workers.

Also as a part of the settlement agreement, Lowe’s is required to hire ADA consultants who can help to reshape the company’s leave policies and assist them to address accommodation issues. Lowe’s will be required to create a system for recording and tracking employee requests for accommodation and how those requests are dealt with. Additionally, staff and management members across the company will be asked to undergo training related to ADA issues.

Lowe’s executives argue that they revamped their leave policies and more closely examined their compliance with ADA in 2010. Nonetheless, they agreed to this settlement to further the effort to comply with all facets of the ADA.

Lowe’s situation acts as an important lesson to other employers who are not sure if they are in compliance with all applicable aspects of ADA. Hiring a consultant or seeking legal advice before a serious problem arises is the best way to avoid a costly lawsuit from the EEOC or a former employee. Proactive measures toward offering accommodations and not violating ADA medical leave policies are important for any company that is seeking long-term success.

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Megan Messina, a 42 year-old executive at Bank of America, is suing her employer for gender discrimination and whistleblower retaliation. The complaint was filed in a Manhattan federal court in May of 2016.

Gender%20Discrimination%20105366239-001.jpgMessina began working at Bank of America in 2007. Before that, she spent a decade at Salomon Smith Barney. Her education and experience enabled her to attain a position as the co-head of the structured credit products division. The complaint alleges that Messina was treated unfairly by Bank of America from the beginning of her employment. In particular, her complaint outlines the interview she had with her supervisor when she was promoted to her current position.

She alleges that the supervisor asked her questions about the color of her eyes and whether or not she dyed her hair during the meeting. Moreover, Messina points out that while her male co-head met with the supervisor up to three times a day, she met with him exactly twice in her entire tenure. The complaint also argues that Messina was not included in important department emails and meetings, despite the fact that surveys showed she was outperforming many of her male co-workers.

Messina compares her own pay to that of her departmental co-workers, all of whom are male. In particular, she notes her $1.5 million 2015 bonus, comparing it to the $5.5 million received by the male co-head of her department. The complaint also details several department business deals that may have run afoul of the law. When Messina brought these matters to the attention of supervisors, she was essentially told not to rock the boat. Ultimately, she was forced by the bank to take a leave of absence.

Messina’s case illustrates important points that employers must be aware of. It’s sensible to treat all allegations of wrongdoing seriously. Moreover, it’s important to be proactive when it comes to matters of equal treatment and compensation. Doing so can prevent an employer from occupying a similar position to the one in which Bank of America now finds itself.
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In an age where smartphones, social media and the Internet have led to improved connectivity, California legislators are looking for ways to prevent jurors from violating the rules. Judges issue strict instructions to jurors that they must not perform any Internet research regarding the case they are deciding. Moreover, jurors are told in no uncertain terms that they are prohibited from discussing the case on social media.

scales%20and%20gavel%2090061933-001.jpgThese warnings are often to no avail as an increasing number of jurors are being caught making social media posts or doing online research in violation of the orders. Jurors who are caught breaking the rules may be held in contempt of court. Typically, this means that misbehaving jurors are dismissed without much in the way of consequences. When a juror is dismissed, there is a good chance that a mistrial will be declared, leading to spiraling court costs and hundreds of wasted hours.

The new measure, which is currently before the California Assembly, is the first of its kind in the nation. If it passes, it would give judges the ability to immediately issue a citation to jurors who break the rules about Internet research and social media postings. The new process would be much easier and more efficient than the process for finding a juror in contempt. Just as importantly, it would empower the judge to levy a fine of up to $1,500.

Internet and social media use by jurors has been an increasing problem in recent years. Across the country, juror infractions have led to verdicts being overturned and mistrials being declared. Louisiana State University’s Press Law and Democracy Project kept a close eye on such events until recently. That’s because these violations used to be relatively rare. Now, they are so common that participants decided the effort was “more trouble than it was worth.”

This legislation seems to have broad-based support and appears to be on the way to the governor’s desk for approval. If this happens, it seems inevitable that other states will soon consider taking similar measures in an effort to crack down on wayward jurors.

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Executives at Lowe’s Home Improvement stores may be forced to re-evaluate their safety policies after a jury awarded a victim who was injured at one of their locations a multi-million dollar verdict.

Wet%20Floor%20Caution%20101639883-001.jpgKelly Henrickson, a 41 year-old mother of three, was shopping at a Lowe’s store in Las Vegas when she received the injury. Hendrickson was in the store’s garden center looking at palm trees in July 2013 when she fell on a “slimy, wet substance.” The substance was leaking from the bottoms of several planters in the area.

Employees had placed a yellow, three foot tall cone in the vicinity, but Hendrickson argued that it was obscured from plain view, which is why she did not see it until she was already falling.

Hendrickson hit her head on the concrete floor in the accident, fracturing her skull and injuring her neck. Brain damage has caused her to permanently lose the abilities to taste and smell. Moreover, she suffers from chronic headaches and experiences difficulties with balance. Hendrickson has also received medical treatment for depression and anxiety. Her dream of becoming a school bus driver has fallen by the wayside.

Hendrickson filed a personal injury lawsuit against the store in an effort to receive compensation for her medical bills, lost wages and pain and suffering. Attorneys for Hendrickson also sought punitive damages, citing an ongoing record of falls at Lowe’s stores throughout the Las Vegas vicinity in the last five years.

A jury awarded Hendrickson approximately $13 million as a result of the litigation. This falls short of the amount that the plaintiff and her attorneys were seeking because the jury chose not to award punitive damages. They decided that the retailer was 80 percent responsible for the accident while Hendrickson was responsible for the remaining 20 percent.

Plaintiff’s lawyer Sean Claggett said that Lowe’s is “still not getting it right because they don’t care about it.” Nonetheless, Hendrickson’s attorneys count this decision as a victory, and they expressed their hope that Lowe’s might change their safety policies and practices in the wake of the verdict.

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A settlement agreement between ride-service firm Lyft and its drivers may set a precedent for similar litigation against Uber. Both Lyft and Uber provide services in which customers use their smartphones to hail a ride from participating drivers. Neither company classifies its drivers as employees, instead calling them independent contractors. The organizations argue that the arrangement allows drivers to determine when, where and for how long they work. Drivers enjoy the flexibility to work as little or as much as they wish.

LYFT%20Nissan-001.jpgHowever, classifying drivers as independent contractors means that the drivers are responsible for the costs of doing business. Gas and vehicle maintenance, for instance, are entirely at the expense of the driver. If the drivers were employees, then Lyft would be responsible for these costs.

Refusing to classify drivers as employees has further benefits for Lyft. They aren’t responsible for withholding taxes, providing insurance or meeting minimum wage standards. Lyft drivers argued that they should be afforded the protection of regular employees, especially since they could be deactivated from the service without prior knowledge or consent. The contention caused them to file a lawsuit in California.

That lawsuit has now settled before reaching the trial phase. Lyft will still not classify drivers as employees, but it will have to accord them greater consideration and protection. Among this consideration is providing notice when a driver will be deactivated from the service. Lyft is now required to provide a reason for the deactivation, such as poor ratings from customers. Drivers now have the ability to appeal a deactivation decision and may be able to reverse it.

As part of the settlement, Lyft is required to pay its drivers $12.25 million and offer some benefits that are more commonly associated with regular employees. However, the company’s business model remains intact.

It is a settlement that is being studied with great interest by Uber, which is the subject of a similar class action lawsuit that is due in court in June. At this point, it is not known whether Uber will seek a settlement or allow the case to go to trial.