Legal Tidbit:
On March 27, 1866, President Andrew Johnson vetoed the Civil Rights Act of 1866. The law was a result of the Civil War and was the first American law to define citizenship and affirm that all citizens are equally protected by the law. Within two weeks, Congress overrode Johnson's veto, and by the end of April, had passed the Thirteenth Amendment as well.
THIS WEEK:
- Elon Musk Funds A Fight Against The Mouse
- Apple Faces Suits Both Federal And Private
- Creating The Right Mindset In The C Suite
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👩⚖️ LAWSUITS
Putting The Mouse In A Suit
In early 2021, actress Gina Carano was fired from her role on Disney+’s hit The Mandalorian over a series of controversial social media posts. Now, the actress is suing The Walt Disney Company over a wrongful termination claim.
As The Hollywood Reporter notes, Carano began tweeting and posting anti-masking and anti-vaccination messages during the COVID pandemic, as well as anti-Black Lives Matter and Trans Rights messages, then supported Donald Trump's claim of a rigged 2020 election, and eventually, in February 2021, posted "a photo of a terrified Jewish woman being chased by a boy holding a bat during the Holocaust."
With that, public backlash began along with the #FireGinaCarano campaign. Carano's talent agency and law firm both dropped her. Disney seems to have agreed, as she was fired from the show shortly after.
But now, Carano is leveraging an obscure California labor code called Section 1101 to sue the entertainment giant. Section 1101 blocks employers from creating rules “forbidding or preventing employees from engaging or participating in politics or from becoming candidates for public office” or “controlling or directing, or tending to control or direct the political activities or affiliations of employees.”
“No one really focuses on protecting political activities without employer interference, and it really is a reflection of California’s extensive employee rights,” Natalie Pierce, head of Gunderson Dettmer’s employment and labor practice, told LegalDive.
Meanwhile, Tom Spiggle of The Spiggle Law Firm, added that scant precedent stands on the code. “Employers don’t want to get into this; they’re not watching where you go,” he continued. “We’ve never had somebody walk into our office, say they went to this event and were fired.”
The Musk Factor
Funding Carano's suit against the Mouse is Elon Musk. In August of last year, Musk posted to X that "if you were unfairly treated by your employer due to posting or liking something on this platform” he would pay the legal bills.
Seems Carano took him up on that offer. As CNBC reports, the actress posted to X, “I would like to express my deepest gratitude & thank you to @ElonMusk & @X for giving me an opportunity to bring my case to light."
THE VERDICT:
Seemed a matter of time until this corner of California employment law was explored. Musk, Carano, and Disney definitely make a high-profile trio to add to the case law. What's more, it stands to reason that many more celebrities will begin to voice their political beliefs depending on how the verdict lands.
❤️ COMPANY CULTURE
General Counsel Can Build A General Culture
Integrity starts at the top.
That's the message Rob Chesnut, General Counsel for Airbnb, wants to share. “Everyone looks up to the person who’s been successful in business, in their career, so if a leader acts with integrity, that permeates the culture," he told LegalDive before adding, "the way a leader talks and behaves creates a climate that everybody in the company is living in and is affected by. So, it’s not just about you; it’s also about the people around you.”
According to Chesnut, whether it be social movements (like MeToo or Black Lives Matter) or simply a company doing whatever it takes to chase a goal, company culture is vital to how a firm views and evolves itself. Of course, the company culture, begins with the executive team, and the general counsel can play a huge part in shaping things.
Speaking about the MeToo movement and how he helped eBay's executives, Chesnut describes how he sat them all down and made them commit in front of one another how they would not behave in a way that could even be construed as harassment. “We had a discussion about it and I said, perhaps in light of all that is happening, why don’t we agree we’re just not going to go there?” Chesnut continues. “We went around the room and everybody said, ‘I’m in.’ The significance of that is, if no one ever talks about it, it’s easy to rationalize and fall into it. Everybody in that room understood that if they went that way now, they were violating their word to the rest of the team, which means they were probably going to have to leave the company.”
Ultimately, creating a workplace with integrity means instilling the executives with the idea and getting ahead of any temptations. "It could be financial irregularities or sexual misconduct, because these kinds of matters can be career altering and potentially brand altering. As a lawyer, I saw it as my responsibility to protect against that risk," said Chesnut. “We’ve all made mistakes, done things that are wrong. …It’s just having an honest conversation about the temptations to do things that are wrong. If it takes 30 minutes here and there, or takes a conversation at an executive committee meeting, you can insulate your company a little bit.”
THE VERDICT:
Nothing can derail a firm as quickly as poor company culture or a rotten executive suite. As Chesnut advises, aligning the leadership team around integrity can insult you against scandal and risk down the line.
💻 TECHNOLOGY
The People Want A Bite of Apple
A week after the DOJ filed a major antitrust case against Apple claiming the tech giant monopolized the smartphone market, a slew of consumers are piling in.
According to Reuters, "at least three proposed class actions have been filed since Friday in California, and New Jersey federal courts by iPhone owners who claim Apple inflated the cost of its products through anticompetitive conduct." All told, the proposed class action suits represent millions of plaintiffs and mirror the very allegations against Apple made by the DOJ: that the company suppressed messaging apps and digital wallet tech that would have added competition to the market.
For its part, Apple has already vowed to fight the DOJ's suit, and surely these class actions will be no different. As an Apple statement reads: the DOJ "lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect. …It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”
Earlier this month, Apple settled another class action suit, this one brought by shareholders who alleged CEO Tim Cook mislead them about falling iPhone demand in China. The settlement was $490 million.
Meanwhile, in Europe, the EU has already fined Apple 1.8 billion Euros for breaking anti-competiton laws with its music streaming service, writes the BBC. Now, the EU is investigating the Cupertino firm for restricting user choice and blocking apps from freely communicating with their customers.
With all these legal actions piling up, the New York Times notes that these "troubles are testing the resiliency of Apple’s brand and undermining its business dominance, even though Apple’s products remain popular and continue to power an extremely profitable business."
“In past major antitrust cases, the real danger for the company is that the focus of attention becomes winning the antitrust lawsuits instead of winning customers and doing your job. …It slows you down. It’s a real drag," Wiliam Kovacic, director of the Competition Law Center at George Washington University, [tells CNBC](https://www.cnbc.com/2024/03/22/apple-doj-antitrust-suit-company-faces-years-of-distraction.html#:~:text=The U.S. Department of Justice,"walled garden" business model.).
Epic V. Apple
Even though Apple won its case against Epic games regarding the App Store, the company is now accusing Apple of not being in compliance with a judge's injunction in the ruling. Most notable, however, is that Microsoft and Meta have written amicus briefs for the case against Apple. As The Verge reports: "the amici say that Apple’s 12 to 27 percent fee on external purchases defeats the purpose of the new requirement since it’s only a few percentage points below what developers would otherwise be required to pay for in-app purchases. The external purchase fee could make it unrealistic for developers to even set up an external payments system, given that other transaction costs they might incur through that route could eliminate any of the 3 percent gains they’d get from moving away from Apple’s system. Plus, customers are unlikely to choose the external option if it’s the same price or higher."
THE VERDICT:
As the Times stated, Apple remains one of the largest, most popular, and most profitable brands on Earth. So, yes, it will most likely be able to handle all these major suits at once. In fact, the argument could be made that such a behemoth would court (pardon the pun) so much legal scrutiny.
