Indemnification and Insurance Indemnification by State Law, Charter and Contract
January 01, 2004
In addition to exculpating directors from personal liability in some cases, state corporation statutes authorize the use of corporate funds under certain circumstances to indemnify directors and officers for personal losses incurred by them in their official capacities. To varying extents, depending on the particular nature of the claim, the kinds of claims that a director may be indemnified with respect to include breach of fiduciary duty, violation of securities laws, or personal injury (<i>eg</i>, employment discrimination). Generally, the statutes require a corporation to indemnify a director for expenses incurred in the successful defense of a claim.
Recent Developments in Executive Compensation
January 01, 2004
Although executive compensation has been the subject of evolving reform for several years, the bright spotlight of public attention is now focused on this issue, due in part to the bursting of the stock market bubble, the collapse of Enron, and a number of other highly publicized corporate scandals. The image of executives enjoying excessive compensation packages as revenues and earnings decline, and stock values of the companies they manage plummet, is a dangerously common stereotype.
Is Compliance with Sarbanes-Oxley <i>de facto</i> Mandatory?
January 01, 2004
In Part One of this two-part article, the author summarized the basic requirements of the Sarbanes-Oxley Act of 2002 (the Act) and demonstrated the legitimate and increasing public interest in accountability of nonprofits. In Part Two, the discussion focuses on the extent to which compliance with Act-like corporate governance standards is, <i>de facto</i>, already required of the nonprofit sector.
<i>Ellerth/Faragher</i> Affirmative Action Defense: Resolving the Conflict
January 01, 2004
On Dec. 1, 2003, the United States Supreme Court agreed to consider whether a constructive discharge caused by a supervisor's sexual harassment constitutes a tangible employment action that bars an employer from raising the defense that the employee unreasonably failed to employ the employer's procedures for preventing and correcting such conduct. In granting the Pennsylvania State Police's request for review from the United States Court of Appeals for the Third Circuit's decision in <i>Suders v. Easton</i>, 325 F.3d 432 (3d Cir. 2003), the Supreme Court has the opportunity to resolve a growing conflict among the circuit courts regarding the availability of the so-called <i>Ellerth/Faragher</i> affirmative defense in constructive discharge cases.
Firing of Nonunion Workers Held Unfair Labor Practice
January 01, 2004
The United States Court of Appeals for the Sixth Circuit recently held an employer that fired two nonunion workers for complaining to a client about their employer's policies violated the National Labor Relations Act (NLRA).
Fair and Accurate Credit Transactions Act of 2003 Enacted
January 01, 2004
The Fair and Accurate Credit Transactions Act (FACT), which amends the Fair Credit Reporting Act (FCRA), was recently enacted. The FCRA created a national credit reporting system, and was set to expire this month. FACT permanently authorizes the majority of the FCRA's provisions while including two noteworthy revisions. Particularly significant for employers are FACT Sections 611 and 411, which include new standards for third-party investigations of employee wrongdoing and reporting of employee medical information to employers.
