There continue to be regular developments in the business and human rights field that warrant attention from both companies and their stakeholders. New legislation and regulation, shifting policy positions, and developments in ongoing litigation...there is always a lot to discuss.
To conclude this week, we have put together a rundown of five recent developments that we've been watching closely:
- On September 2, a federal judge in Boston ordered the Securities and Exchange Commission to file, within 30 days, an expedited schedule for releasing a final rule on revenue transparency. The order came after Oxfam America filed suit against the SEC, seek to compel it to promulgate a final rule. The SEC's first rule, issued pursuant to Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, was vacated in July 2013.
- Lawsuits filed in California in August against both Costco and Nestlé, alleging that the companies have been misleading with regard to their efforts to address forced labor in their supply chains, have highlighted the challenges associated with complex global supply chains in a world in which human trafficking and forced labor remain a tragic reality for far too many people. As abuses around the world continue to come to light, and as new disclosure requirements prompt corporate statements regarding their efforts to address these challenges, there will likely more litigation to come.
- On September 4, the Canadian Supreme Court ruled that Ecuadorean plaintiffs can proceed in their effort to use Canadian courts to enforce a $9.5 billion judgment against the company that was handed down in 2011 by an Ecuadorean court. The Ecuadorean judgment stems from a lawsuit originally filed against Texaco in 1993 alleging that the company was responsible for significant pollution in the Amazonian rainforest. Notably, a U.S. District Court judge in New York found in 2014 that the Ecuadorean judgement was obtained fraudulently. That decision is currently under review by the Second Circuit Court of Appeals.
- As new technologies enable new business models, lots of questions have been raised about the responsibilities of companies in the "sharing economy." For the most part, legislation and regulation have not yet caught up to these new models. On September 1, a U.S. District Court judge in California ruled that California Uber drivers can sue as a class in their effort to be considered employees, rather than independent contractors, of the company. The decision also found that the drivers can sue as a class in their demand for tips that have not been passed on to drivers. If Uber drivers are ultimately classified as employees, that would entitle them to a range of labor and employment benefits.
- Just as legislation has not caught up with the sharing economy, it has certainly not caught up with the Internet. On September 9, a hearing was held at the Second Circuit Court of Appeals in Microsoft v. United States, a high-profile data privacy case. Microsoft is seeking to prevent the U.S. Department of Justice from using a warrant to compel the company to turn over customer emails stored on a server in Ireland, arguing that the government does not have the authority for such an extraterritorial search and seizure. The case highlights the need for an update to the Electronic Communications Privacy Act ("ECPA"), and one of its component statutes, the Stored Communications Act, drafted at a time when email was rare and communications were downloaded to users' computers. ECPA didn't contemplate the cloud and this case is being closely watched by many companies who have already felt the business impacts of international mistrust of U.S.-based cloud service providers.
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