The Supreme Court heard oral arguments on March 25th, 2014, on the Tenth Circuit Case Hobby Lobby Stores, Inc. v. Sebelius and the Third Circuit Case Conestoga Wood Specialties v. Sebelius; a ruling is expected in late June.[i] Hobby Lobby and Conestoga are two prominent examples from over 71 cases involving for-profit businesses challenging the contraceptive mandate in the Patient Protection Affordable Care Act (ACA) on the grounds that this provision violates their religious beliefs under the First Amendment Free Exercise Clause, Establishment Clause, and the Religious Freedom Restoration Act (RFRA).[ii] Specifically, the contraceptive mandate requires that “all health insurers and non-grandfathered group health plans that offer group or individual coverage for certain preventative cost services for women without cost-sharing.”[iii] A verdict for the government has large implications for for-profit businesses such as Hobby Lobby opposing the mandate. To explain, “The companies could face steep $100-a-day … Read the rest
National Security Space Launch: No Contest
Competition and innovation are key ideals in American society, and they were the main focus on March 5, 2014 when the CEOs of SpaceX and United Launch Alliance (“ULA”) testified before the Senate Appropriations Subcommittee on Defense.[1] The ULA, a joint venture between aerospace giants Boeing and Lockheed Martin, currently provides launch services for the U.S. National Security Space Launch programs.[2] SpaceX, a relative newcomer to the space launch business,[3] is seeking to break ULA’s current monopoly on national security launches and open the procurement process to other launch providers.[4]
The EELV Program
In 1994, the U.S. Air Force initiated the Evolved Expendable Launch Vehicle (“EELV”) program to ensure that the U.S. military and civilian national security organizations would have reliable access to Earth’s orbit for spy satellites, military communications, and other important payloads.[5] As … Read the rest
Lessons from Hartney: How to Reduce Tax Forum Shopping by Illinois Retailers
The Illinois’ Local Retailers’ Occupation Tax Acts (ROT Acts) allows “municipal governments and the Regional Transportation Authority (RTA) to impose a retail occupation tax ‘upon all persons engaged in the business of selling tangible personal property at retail within the county, municipality, or metropolitan region.”[i] Leading up to the recent Illinois Supreme Court decision in Hartney Fuel Oil Co. v. Hamer, a number of Illinois retailers with selling activities in multiple jurisdictions sought to pay Illinois Local Retailer Occupation Taxes only in the lowest tax rate jurisdictions where they accepted purchase orders, even when their predominant selling activities occurred in other places.[ii] This narrow interpretation of the “business of selling” in the ROT Acts complies with the Department of Revenue (DOR) regulations regarding the Acts, which establish a bright-line rule for purchase order acceptances.[iii]
Although the ability to tax … Read the rest
Family Leave in the United States: Time for a Change?
On February 5, 1993, the Family and Medical Leave Act of 1993 (“FMLA”) was signed into law by Bill Clinton, mandating 12 weeks of unpaid family leave for companies with over 50 employees, if the employee has worked at least 1,250 hours during the last 12 months with the company.[1] In its findings, Congress specifically recognized the importance of parent participation in early childhood and the lack of job security available to working parents, and sought to give new parents more flexibility with work-life balance.[2] Since the FMLA was passed, the United States has fallen far behind other developed countries in providing leave for new parents. After more than 21 years, U.S. lawmakers should reexamine the national family leave policy and increase the benefits guaranteed for family leave. A more generous family leave policy is not only good for individuals and families, but also good for business.… Read the rest
The Necessity of Corporate/NGO Partnerships
While corporations have historically committed human rights and environmental conservation violations, it is undisputed that they have taken several steps in recent years to reduce their negative impact on the world. Perhaps the most important fundamental change in the framework of corporate responsibility is the United Nations Guiding Principles on Business and Human Rights. The principles lay out three “pillars”: (1)the state’s duty to protect human rights, (2)the corporate responsibility to respect human rights and (3)the need for available remedies for victims of corporate abuses. [1] But can companies live up to these standards? NGO(Non-government Organizations)/Corporate partnerships may be the answer, but they are in dire straits.
The Guiding Principles were released to open support by the business community, with companies like Coca-Cola calling them flexible and a great foundation for corporate responsibility.[2] However, while companies have endorsed them for the most part, they remain responsibilities and … Read the rest
The Macy’s, JC Penney, and Martha Stewart Love Triangle: Is Freedom of Contract Threatened?
Background
In 2011, Martha Stewart called Macy’s CEO Terry Lundgren and announced she wanted to have her cake and eat it too – she was breaking her contract with the company. [1]
The contract granted Macy’s exclusive rights to sell Stewart’s bed, bath and kitchen merchandise. [2] In exchange for these rights, Macy’s spent millions to bring Stewart (then fresh out of prison) back to the forefront as America’s homemaker extraordinaire. [3]
But after some questionable missteps from competitor JC Penney, Stewart decided exclusivity was not in her best interest.
The Macy’s contract forbid Stewart from designing products in those categories of housewares for anyone else. The contract made a very narrow exception for Martha Stewart-owned stores. [4]
Ron Johnson, JC Penney CEO at the time, knew about the Macy’s contract when he offered Stewart a competing contract. [5] As part of his plan to keep his struggling department store … Read the rest
Crimes Against Humanity, I’m Lovin’ It: Issues in Sponsorship of the 2014 Sochi Winter Olympics
Crimes Against Humanity, I’m Lovin’ It: Issues in Sponsorship of the 2014 Sochi Winter Olympics
By: Inessa Goodman
While business leaders and CEOs have never shied away from promoting their political agendas and views, the line is sometimes blurred between what is appropriate, and what is not. The recent controversies involving Chik-fila, Barilla, and their public statements against the LGBT community highlight this issue. Recently, a similar issue has surfaced, not involving public statements, but mere funding of an entity that supports questionable social policies.
What effect does this have on businesses? Should businesses be held more accountable for their social responsibility? Specifically, this article explores this issue in the context of the upcoming Winter Olympics in Sochi, Russia.
Current Anti-Gay Legislation in Russia
Homophobia is now engrained in the state policies in Russia. In June 2013, Vladimir Putin, president of Russia signed an “anti-gay propaganda law”. These laws … Read the rest
Fiduciary Duties: Legal Obligations or Investors’ Imaginary Friends?
Founded in 1983, Ancestory.com is the world’s largest family history website that provides access to more than ten billion records and thirty eight million family trees.[i] Recently, the London based private equity firm Permira Advisers LLP agreed to purchase the company at a valuation of $32 a share.[ii] The $32 amount represents a premium of 10% based on the company’s price at the time the deal was announced. [iii] However, many shareholders are unsatisfied and upset.[iv] In fact, many shareholders have filed suit against the company.[v] Principally, these suits allege that the Board of Directors of Ancestry.com breached their fiduciary duties to stockholders by failing to obtain a higher price by adequately shopping the company and that the decision to consummate the sale was not in the best interest of shareholders, rather that of the Board of Directors.[vi]
Attorneys representing pension funds and shareholders … Read the rest
Bluebird: Walmart Wants To Be Your “Every Day Low Price” Bank.
Frustrated with your bank’s surprise fees and minute interest rates? Shop at Walmart? You may find a solution to your woes in an unusual but convenient location: on the “Every Day Low Price” stores’ shelves. Bluebird, the child of a Walmart and American Express partnership, will offer a prepaid, easy-to-refill, low fee debit account and card that aims to attract disgruntled bank customers and millions of “underbanked” households. The product is poised to change the banking industry (to the dismay of banks) by offering traditional banking services from a non-bank, but consumer activists have voiced concern over the legitimacy of Walmart’s foray into banking and the potential for abuse in the relatively unregulated area of prepaid card accounts.
In its quest to be America’s neighborhood “everything” store, Walmart has taken aim at the personal banking industry. The “underbanked” market, populated by “customers who use few, if any, … Read the rest
Say-On-Pay: The First Results Are In
Pursuant to enacted legislation, shareholders of publicly owned companies are entitled to hold a non-binding vote on executive compensation packages (say-on-pay). With the 2011 say-on-pay votes complete and a substantial portion of the 2012 say-on-pay votes well underway, analysis of all the available data is beginning to give say-on-pay supporters reason to celebrate.
During the first Congressional hearing into the financial crisis, Richard Fuld, the former Chief Executive Officer of Lehman Brothers, was forced to defend his receipt of $484 million in salary, bonuses, and stock options between 2000-2008 http://abcnews.go.com/Blotter/story?id=5965360&page=1#.UIFzH6DNlFI. Part of his explanation was to suggest that, because the collapse of Lehman relegated his stock worthless, his actual earnings were closer to $350 million (Id.). He conceded, “That’s still a lot of money” (Id.).
That sure is a lot of money for someone who, by virtue of his title as CEO, bears responsibility for the taxpayer … Read the rest