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Couple of things this week.

First, the FTC proposed a new rule that would bar employers from requiring employees to sign noncompetes that extend post-employment.  It’s a very broad proposal; it applies to “a contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer,” and includes “a contractual term that is a de facto non-compete clause because it has the effect of prohibiting the worker from seeking or accepting employment with a person or operating a business after the conclusion of the worker’s employment with the employer.”

The sole exception is for “a non-compete clause that is entered into by a person who is selling a business entity or otherwise disposing of all of the person’s ownership interest in the business entity, or by a person who is selling all or substantially all of a business entity’s operating assets, when the person restricted by the non-compete clause is a substantial owner of, or substantial member or substantial partner in, the business entity at the time the person enters into the non-compete clause.”  A substantial owner…

Vikas Mittal and Jihye Jung have posted Strategic Management of Corporate Political Activism on SSRN.  Here is the abstract:

Senior leadership at many organizations engages in overt corporate political activism (CPA), defined as activities that are visible to stakeholders that support or undermine issues viewed as politically charged. According to media accounts, consumers, employees and shareholders want executives to engage in CPA. Evidence from peer-reviewed research shows that CPA does not help, but can harm companies on many fronts. This evidence shows that CPA is detrimental to a company’s brand equity, employee productivity, and financial performance while also alienating some customers. To help address these issues, this article develops a strategic framework to assess where a company is in its CPA journey and determine its path forward. The framework proposes four strategies: convergence, divergence, selective engagement, and depoliticized but supporting stance. Companies can use this framework to assess whether and how they should engage in political activism and then find ways to adapt their political activism strategy over time.

Everyone remember the WeWork debacle?  One interesting aspect is that although Adam Neumann is often mentioned in the same breath as Elizabeth Holmes and – these days – Samuel Bankman-Fried, Neumann was never charged with fraud, despite ballyhooed announcements of investigations.  If anything, that’s one of the more amazing things about the story: Neumann was able to incinerate billions of dollars while apparently explaining exactly what he planned to do and how he would do it.

Well, not exactly.  As I blogged in March 2021, one set of WeWork investors brought fraud claims against Neumann and other WeWork officers, namely former shareholders of a company called Prolific Interactive, which WeWork acquired for a combination of cash and WeWork stock.  The former Prolific shareholders claim that they were misled about the value of WeWork stock and sold their company too cheaply.  And, when they filed their complaint, I blogged that I didn’t understand why they had chosen to bring claims solely under Section 10(b) of the federal Exchange Act.  Section 10(b) is a very plaintiff-unfriendly statute.  Among other things, 10(b) claims are subject to the heightened pleading requirements of the PSLRA, and the scope of prohibited behavior is actually quite…

Earlier this year, co-blogger Joan Heminway posted about the University of Pennsylvania Law Review’s October 2022 Symposium, Debt Market Complexity: Shadowed Practices and Financial Injustice.  It was a fantastic program! For interested BLPB readers who were unable to attend, I wanted to share that recordings of the program were available online.   

In early November, Berkeley held a 2-day forum on corporate governance, featuring a variety of A-list speakers including Chancellor McCormick and Vice Chancellor Glasscock.  I also participated on a panel with Adam Badawi to talk about everyone’s favorite subject, Elon Musk’s takeover of Twitter.  The videos from the event were just posted online, so for those of  you who couldn’t watch it live – here’s the link (also available here)!

Happy holidays, everyone. Stay warm!

The Akron Law Review seeks articles and essays of any length, speakers, and panel participants for a symposium on issues related to sports and entertainment law. The Symposium, “Game Changers: Rewriting the Playbook” A Sports and Entertainment Law Symposium will take place at the University of Akron School of Law, Akron, OH, on Friday, April 14, 2023. 

The editors seek articles, essays, and speakers that address one or more of the following topics, or other related topics:

  1. Contract Negotiations
  2. Diversity in Sports Leadership
  3. The Interplay of Ethics and Sports Agency

The editors seek articles, essays, and speakers for panel discussions on the following topics:

  1. Name, Image, and Likeness (NIL) – With this panel, we seek discussion of NIL policy and how athletes do, can, and/or should navigate new and evolving guidelines.
  2. Equality in Pay – With this panel, we seek discussion of the differences in pay between women and men in team and individual sports, such as soccer and golf.

The Akron Law Review has been highly ranked in the Washington and Lee Law Review Rankings for several years. In five recent years (2015-2019), the Akron Law Review ranked in the top 100 for student-edited, general journals in the Washington…

A couple of weeks ago, I blogged about how the most striking aspect of the FTX saga was the lack of due diligence by FTX’s equity backers – and how proud they were of that fact, before everything came crashing down.

This week, we got a little more color on that, in the form of the SEC’s complaint against Samuel Bankman-Fried (like everyone else, for ease of reference, I’ll call him “SBF”).  The least surprising thing about the case is that the SEC focused not on the fraud perpetuated on crypto asset traders, but on the fraud perpetuated by SBF on investors in FTX.  That’s because the SEC only has jurisdiction over fraud committed in connection with securities trading, and it’s not always clear whether a particular crypto asset is, or is not, a security.  To sue SBF over fraud perpetuated on FTX customers, the SEC would have to perform the Howey test on an asset-by-asset basis for everything the customers traded – not exactly a feasible undertaking.  So, the SEC took the low-hanging fruit and sued to vindicate the rights of the stockholders in FTX.

Just one teensy problem.  Here are examples of the fraud, taken from…

A former shareholder of Anaplan recently filed a lawsuit against several of its former officers and directors, alleging a variety of fiduciary breaches in connection with the company sale to Thoma Bravo (“TB”).

As you may recall from news reports at the time – or Matt Levine’s column – Anaplan signed a deal to sell itself to TB at $66 per share.  Then, the bottom fell out of the market, and suddenly that looked like a very generous price.  TB was stuck, though, until Anaplan screwed up by approving a bunch of new bonus payments to executives that violated the merger agreement’s ordinary course covenant.  That gave TB an excuse to threaten to walk away unless Anaplan agreed to a lower deal price, and the merger ultimately closed at $63.75 – a reduction of $400 million.

Pentwater Capital, a hedge fund with a substantial stake in Anaplan, is now suing, alleging that compensation committee directors, and the officers involved with the awards, breached their duties of loyalty and committed waste, and that the officers – including the company CEO, who was also Chair – acted with gross negligence. 

(Side note: to distinguish the CEO’s behavior in his capacity as…

Back in October, I posted a blog asking “Should Antitrust Regulators Come for the ESG Cartel?” Yesterday, The Federalist reported (here) that Republicans are launching an investigation into the “Climate-Obsessed Corporate ‘Cartel.’” Some key points from the article:

  • In a June op-ed published in the Wall Street Journal and cited by lawmakers, Sean Fieler, the president of Equinox Partners, a Manhattan-based investment firm, outlined how “The ESG Movement Is a Ripe Target for Antitrust Action.”
  • Republican Arizona Attorney General Mark Brnovich launched a separate antitrust investigation into the Climate Action 100+ network in November last year.
  • House Republicans launched an investigation Tuesday probing whether major climate groups that spearhead the “environmental, social, and governance” (ESG) movement are violating antitrust laws.

The article notes that: 

In a letter sent to executives of the Steering Committee for Climate Action 100+, Republicans led by Ohio Rep. Jim Jordan are demanding a treasure trove of documents that illustrate the coalition’s network of influence…. “Woke corporations are collectively adopting and imposing progressive policy goals that American consumers do not want or do not need. An individual company’s use of corporate resources for progressive aims might violate fiduciary duties or

…