First you need to work with your HR manager and find out what is really going on. Ask the employee about the behavior, what she thinks the reason for the alleged harassment is. Find out with questioning the employee if she believes it is related to her gender, age, race, religion, a disability or because she has children. If, after thorough questioning, you and HR determine her claim of harassment is not based on any of those protected categories you have a management issue not a legal one. To be an illegal form of employment discrimination, workplace harassment must be based on race, color, religion, national origin, disability, genetics, age or sex.

If you think you have a problem based on a protected category contact The General Counsel, LLC as soon as possible so that we may help diffuse the problem before it becomes a lawsuit.

Eventually, all federal purchasing will incorporate the measurement of GHG emissions as a contract requirement. The first step, which is part of Executive Order 13514, is the creation of a voluntary GHG emissions reporting system for government contractors and vendors. Contractors’ (and subcontractors’) ability to measure and minimize their GHG emissions and provide energy efficient products and services will become an important factor in winning government contracts.
II. SEC Guidance on Climate Change Disclosures
The U.S. Securities and Exchange Commission (“SEC”) issued Interpretive Release No. 33-9106 on February 2, 2010 in order to provide guidance to public companies of the agency’s disclosure requirements regarding climate change issues. The guidance, which became effective immediately, applies to all public companies.
The release doesn’t create new disclosure requirements or modify existing disclosure requirements, but rather, was issued for clarification purposes. Specifically, the guidance addresses four areas that may trigger disclosure obligations under existing SEC requirements:

• 1. whether the impact of proposed or existing climate change laws and regulations in the U.S. and other countries may materially affect the company’s financial condition or operations;
• whether international climate change accords or treaties will impact its business;
• whether a company is likely to face indirect opportunities or risks arising out of legal, technological, political and scientific developments regarding climate change (such as changes in demand for the company’s goods/services, increased competition, or reputational damage); and
• whether a company faces potential physical impacts of climate change on its business (such as disruption to operations caused by weather or supply interruptions, increased insurance, or water availability and quality).

The SEC guidance provides that these climate change disclosures may be required under the Description of Business (Item 101), Legal Proceedings (103), Management’s Discussion and Analysis (303), and Risk Factors (503(c)) sections of companies’ filings under Regulation S-K.
The SEC noted its concern that some companies had already been providing climate change information on a voluntary basis to third parties, and it wanted to ensure that similar disclosures were in SEC filings as may be required under SEC regulations. Independent organizations such as The Climate Registry and The Carbon Disclosure Project maintain corporate climate change data, while the most dominant reporting regulations are those of the Global Reporting Initiative (GRI). Launched in 1997 with the goal of “enhancing the quality, rigor, and utility of sustainability reporting,” the GRI develops criteria that could eventually serve as the basis for generally accepted sustainability reporting standards. As of 2008, more than 1,000 companies from more than 60 countries registered with the GRI and were issuing corporate sustainability reports using its reporting framework.
The SEC expressly indicated in the comments to the guidance that it will be focusing on climate change disclosures in its review of company filings. As a practical matter, public companies are well advised to treat this guidance as binding; if they haven’t disclosed climate risks in the past, they’ll need to begin establishing disclosure procedures for all future relevant filings using these measures as a roadmap.
III. EPA Mandatory Greenhouse Gas Reporting Rule
Beginning on January 1, 2010, a mandatory EPA rule went into effect, which requires that all major GHG emitters track and report their GHG emissions data under a new system.1 The new rule applies to industries or facilities that emit over 25,000 tons of carbon dioxide equivalent per year, of which there are currently approximately 10,000 in the U.S. Most emitters are required to install new monitoring equipment or at a minimum develop new GHG measurement protocols. Recognizing that not all of the organizations would be able to comply by January 1, 2010, the rule allows them to use their “best available monitoring methods” until April 1, 2010.
Affected entities will also need to have a written GHG Monitoring Plan, which must address the methods used to collect GHG data, specify the quality assurance, maintenance, and repair procedures for the GHG monitoring equipment, and assigned roles for facility staff to gather data. In addition, the rule mandates the implementation of GHG monitoring training and documentation procedures in line with the record keeping requirements. While the facilities do not have to send their monitoring plans to the EPA, they are required to maintain the plan at their facility and make it available should the EPA request to review it.
This new EPA regulation is just one of many international, federal, state,2 and regional programs already enacted or currently pending to address the issue of GHG emissions. While there is still a great deal of uncertainty regarding climate change matters and sustainability compliance, it’s not a question of whether most companies will eventually be legally required to monitor, report and reduce their GHG emissions — it’s only a question of when, and how.
IV. Private Sector Sustainability Programs
In the business community, despite the lack of uniform laws and regulations, the last several years have seen a great deal of climate change momentum. In October 2009, major corporations including Apple, Pacific Gas & Electric and Exelon left the U.S. Chamber of Commerce over its strong position against U.S. regulation of GHG emissions. Microsoft co-founder and chairman Bill Gates has recently been calling for making climate change our number one priority, and advocates a global effort to lower carbon emissions to zero by 2050 to avoid the damaging effects of climate change.
More companies are now voluntarily launching new efforts to reduce their climate impact. The steady increase in corporate action toward energy efficiency, renewable energy investment, carbon neutrality, and technological innovation stands in stark contrast to the stalled political action on climate change.
Perhaps the most significant corporate action addressing climate change and sustainability is that of Walmart, the world’s largest retailer. The company recently put into effect the “Walmart Sustainability Index,” which assesses all of its suppliers

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1 40 C.F.R. Part 98.
2 Thirty-three U.S. states plus Washington, D.C. have implemented Renewable Portfolio Standards programs, which are intended to cut GHGs by increasing the use of alternative energy sources, such as wind and solar. The standards set a deadline by which electric utilities must generate a specified percentage of their power from renewable energy sources.

worldwide based on the lifecycle analysis and environmental impact of their products. Over 100,000 suppliers are now highly incentivized to increase their sustainability efforts in order to maintain a successful business relationship with Walmart and remain competitive in the marketplace.
Working closely with the Environmental Defense Fund (“EDF”), Walmart has also committed to reducing 20 million metric tons of carbon pollution from its products’ lifecycle and supply chain by the end of 2015. This equates to the annual GHG from 3.8 million cars — a significant impact.
Due to its sheer size, Walmart is in a unique position to cut carbon pollution across the globe. Its new commitments are bold because:

• Walmart’s supply chain is huge, so these initiatives will have widespread repercussions. Walmart’s new index encourages suppliers to reduce their emissions – which they might not otherwise do — resulting in positive energy efficiency efforts by tens of thousands of companies around the world.
• Walmart is prioritizing the products that create the most carbon emissions across their lifecycles as well as top selling products, and focusing on those first.
• The results are immediate, and not dependent on any particular governmental body to act, or any specific laws or regulations, which may be appealed or changed.
• In conjunction with the Sustainability Index and other measures, it clearly communicates a strong message from Walmart to its international network of suppliers that they must reduce carbon pollution.

Other major global companies taking aggressive action in the area of sustainability and climate change include Hewlett Packard, IBM, Ikea, Johnson & Johnson, Nike, Intel, Dell and Weyerhaeuser. Given their hundreds of thousands of employees, suppliers and customers around the world, these companies have the ability to be very influential in the development of green business practices.
Between the federal government with its more than a half trillion dollar procurement budget, the many companies subject to SEC climate change disclosure rules and/or EPA GHG monitoring requirements, and the private corporate programs such as Walmart’s index which in effect guarantee preferences to vendors who implement sustainable practices, businesses and organizations of all sizes, across virtually all industries, will soon be facing the need to increase sustainability efforts.
Further, these developments indicate that sustainability targets, once merely an option, will soon be mandated in both the private and public sector. Apart from the legal compliance requirements, from a corporate perspective developing sustainability policies now provides a competitive advantage in the marketplace and reduces costs.
V. Developing a Sustainability Compliance Program
Businesses should therefore carefully assess the legal threats and growth opportunities presented by sustainability initiatives. This assessment requires consideration of qualitative and quantitative information, since both strategic issues and corporate emissions levels drive the identification of climate change-related risks and opportunities. For example, certain issues mentioned in the SEC guidance, such as legal, technological, political, and scientific developments, can alter the competitive marketplace by creating new business areas or threatening existing ones, thereby triggering the need for disclosure in a company’s management discussion and analysis.
Depending on the organization’s specific business area and operations, companies should consider taking some or all of the following steps, with the goal of making sustainability a part of the overall culture:

• Establish a benchmark of your organization’s environmental performance. This is a critical step in establishing goals and developing a comprehensive sustainability program.
• If your company manufactures or supplies products, evaluate the products’ life cycle impacts. This can be done by completing or outsourcing a life cycle assessment (LCA). The LCA will be a valuable tool to help make any needed changes to the product or service and reduce environmental impacts and overall costs.
• Hire or appoint a corporate sustainability officer. Federal government agencies are now mandated to fulfill this job function, and savvy private companies are doing the same. One caveat: if you appoint a sustainability officer with little expertise in this area, they should receive training or consulting services from an experienced and credible agency (e.g., the Institute of Green Professionals).
• Establish cross-functional teams to develop sustainability programs for your organization. Pulling data from the benchmarking data should be used to assist the teams in setting realistic and achievable goals.
• Set initial sustainability goals that will achieve immediate success such as waste reduction and recycling. This will build momentum for the program and generate savings that can go towards the more difficult and long-term tasks.
• Provide sustainability training to those who need it in your organization as it relates to their specific job functions.
• Communicate information about the sustainability program to your shareholders, employees, customers and vendors.

There are a number of systems available to help companies assess their climate change related risks and opportunities, calculate their quantitative emissions information, inform them of the likelihood of potential costs from regulation, as well as highlight potential benefits, such as profits from the sale of carbon credits and opportunities for energy efficiency cost-savings. Participation in a voluntary reporting program such as the Climate Registry or the Carbon Disclosure Project is one way companies can begin gathering information on their carbon footprint and gain greater insight into where emissions are occurring in their operations. Companies may also be able to use the information they collect for these programs to assist them in creating other outputs, including 10K filings. The Carbon Disclosure Project questionnaire, or the GRI reporting system, can be used as a framework to begin internally assessing which factors within their business create climate change risks or opportunities.
Corporations can expect to see carbon management grow in importance as domestic and international regulatory activity continues in 2010. In tandem with this trend, the number of products and services developed to help organizations measure and manage their environmental impacts will expand, from startup offerings to more sophisticated enterprise solutions from industry leaders such as SAP, IBM and Microsoft. Enterprise carbon accounting software and sustainability consulting services sales will grow as companies seek detailed, real-time information about their climate impacts.
In addition, companies can obtain assistance in sustainability compliance from organizations which have been formed to share environmental technology and solutions. The Eco-Patent Commons was launched in 2008 by IBM, Nokia, Pitney-Bowes and Sony in conjunction with the World Business Council for Sustainable Development to contribute environmental patents to the public domain. The organization’s mission is to protect the environment and enable collaboration between businesses that foster new innovations. There are now 100 eco-friendly patents pledged to the public domain through this venture.
The GreenXchange was created to enable companies to share intellectual property for green product design, packaging, manufacturing and other uses. Founded by Nike and other companies, the group is a Web-based marketplace where organizations can collaborate and share intellectual property, with the goal of developing new sustainability business models and innovation.
Similarly, last year the EDF launched an Innovation Exchange to encourage companies to share strategies related to energy, water, climate and a host of other issues. Like the Eco-Patent Commons and the GreenXchange, it hopes to publicize new technologies and best practices. The EDF included content in the Innovation Exchange that it developed during its 20 years of experience in working with Fortune 500 companies including Walmart, FedEx and McDonald’s.
Business counsel should familiarize themselves with the new corporate sustainability compliance initiatives being implemented by many of the world’s largest corporations, as well as the tools and resources available to assist businesses in developing their own environmental policies and procedures. Soon, legal departments will regularly be called upon to counsel management on how to handle the current and future mandatory corporate sustainability requirements, which will not only help their companies avoid liability but also improve their businesses and reduce environmental impact.
Dana M. Newman is a Partner with The General Counsel, LLC. She is a seasoned business attorney with over 15 years of in-house legal experience as General Counsel and Secretary for Moviola, an entertainment technology industry leader with offices in Los Angeles and New York. She was a key management team member for Moviola and its affiliates (Paskal Lighting and Magnasync Corporation), where she advised senior management on all aspects of business and legal affairs, including contracts, human resources, insurance, intellectual property, corporate governance, and litigation management.
Dana holds a B.A. in Comparative Literature from the University of California at Berkeley, and a J.D. from the University of San Francisco School of Law. She was an extern for Hon. Robert Takasugi in the U.S. District Court in Los Angeles, and also worked at the Office of the City Attorney in San Francisco.
The General Counsel, LLC is a new breed of legal services firm that understands how regular, direct access to seasoned business counsel can accelerate the growth of an organization. The General Counsel provides cost effective, full and part-time in-house general counsel services to emerging-growth to mid-size companies. The General Counsel’s experienced in-house attorneys work at the client’s office as a member of their management team to help keep their company running smoothly, prevent legal surprises, and provide strategic, business savvy counsel.

A. FMLA (included in the 2010 National Defense Authorization Act):

1. Military Caregiver Leave –Time off to care for injured or ill or active service members has been expanded to include injured or ill veterans (honorably discharged former members of the armed services) if they were discharged within the past 5 years.

2. Qualifying Exigency Leave – provides time off to care for a parent, child or spouse, including registered domestic partners (“Close Relative”) of a member of the military reserve force or National Guard called to service or on active duty has been expanded to include time off to care for a Close Relative of a member of the armed services deployed to a foreign country.

Applies to employers with 50 or more employees.

Recommended Action: Change FLMA policy in handbook to comply.

Reference: 29 USC 2601, 29 CFR 825.100

B. Civil Air Patrol Leaves –the employer must provide up to 10 days a year of leave to employees who are members of the California Wing of the Civil Air Patrol if;
- they are called away in response to an emergency, and
- have completed at least 90 days of employment.
The employee may use accrued leave benefits but cannot be made to do so.

Applies to employers with 15 or more employees.

Recommended Action: Change leave policies and handbook to include.

Reference: AB 485, Labor Code Sections 1500 – 1507)

C. Alternative Work Week

Under existing California law, an employer is required to conduct a secret vote with at least 2/3rds of the affected employees voting in favor of adopting an alternative work week (other than 8 hrs/day – 40 hrs/wk). The vote was difficult to achieve because it would have eliminated every employees’ ability to continue working the standard shift. A recently adopted amendment to the law allows for the standard shift to be included in a menu of work schedule options that is voted on, increasing the likelihood that the 2/3rd vote will be achieved. Employees may, with the employer’s consent, shift between different work schedules from week to week, providing even greater flexibility to both employees and the employer.

Reference: CA Labor Code Section 511, AB 5.

On January 29, 2010, the California Court of Appeal decided in Lhotka v. Geographic Expeditions, Inc. (2010 DJDAR 1689) that the arbitration provision was unenforceable because the entire contract was too one-sided (“unconscionable”). The decision gave the plaintiffs the right to bring their claims in court and have a jury determine liability and damages. It also means that the liability limit will not be enforced, greatly exposing GE to a potentially large damage award.

The factors that led to the finding of unconcionability were; (i) the limited amount plaintiffs could recover under the contract (the cost of the expedition was $16,831), (ii) the arbitration was to be held in San Francisco regardless of the location of the plaintiffs, who lived in Colorado, (iii) the only choice Lhotka had was to sign the release or not go on the trip (GE’s President wrote a letter stating that the release was mandatory), and (iv) the contract required the plaintiffs to indemnify GE for any lawsuit raising claims waived or released under the contract.

Clients who provide products or services to consumers often seek highly restrictive contracts. It is not uncommon for a business owner to adapt a competitor’s contract form to his own use, believing it is a solid, well drafted document. Given the lesson of this case, that could be a big mistake.

An article in the Los Angeles Daily Journal on January 1, 2010 provides answers. It cites a Federal Trade Commission guide that establishes when an employee’s internet postings about his or her company’s products might be improper public endorsements or testimonials, which could create liability for the company.

The article recommends that, to reduce the risk, the company’s computer and internet use policy should include a statement that employees who post internet statements about the company’s products or services must (i) “clearly and conspicuously disclose” their employment; and (ii) state that what they’ve written is their own personal opinion and has not been endorsed by or made on behalf of the company.

If your company’s Employee Handbook doesn’t address these issues, we can help you revise it.

Any policy whether in writing or not, can violate the NLRA, if it prohibits employees from discussing their working conditions.  Please note that these laws apply to you even if you do not have any unionized employees.

It underscores a central theme of The General Counsel, LLC’s mission to provide high-quality, reasonably priced legal services to clients, which is that companies must seek out alternatives so that they can survive a very difficult economic environment.

In my white paper posted on CFO.com , I offer a number of suggestions on how companies can reduce their outside legal expenses. We believe that our clients can pay less without having to sacrifice quality.