Skip to content Skip to navigation menu
Your browser is not supported by this site.
Please update to the latest version, or use a different browser for the best experience.

Corporate Counsel Connect collection

September 2015 edition

Interference with FMLA leave; Differential pricing policies; Mandatory survey filings for U.S. companies with direct investment abroad

Interference with FMLA leave

Employers should train their managers to avoid any conduct seen as interfering with an employee's right to FMLA leave.

In Gordon v. United States Capitol Police, the DC Circuit reversed the district court's dismissal of the action and allowed an employee's FMLA interference and retaliation claims to proceed, even though the employee was not prevented from taking leave.

Employers should avoid any behavior that arguably chills employees' FMLA leave rights and train managers to respond appropriately to all leave requests. Specifically, managers should not:

  • Express displeasure with any leave request
  • Discourage employees from taking leave
  • Suggest that leave will be difficult on the business
  • Require fitness for duty examinations, unless supported by legitimate business reasons and as part of a consistent and articulated policy

Whenever possible, leave requests should be referred to the human resources department or other trained leave administrators.

For more information on the requirements for FMLA leave, see FMLA Employee Notice and Employer Response Checklist.

Differential pricing policies

For companies offering price discount programs, a recent Sixth Circuit decision highlights how a differential pricing policy can constitute unlawful tying if the policy lowers the discounted product's price below cost. Differential pricing occurs when a company offers one product at a higher price if the customer does not buy an additional tied product.

In Collins Inkjet Corp. v. Eastman Kodak Co., the Sixth Circuit, in upholding a preliminary injunction issued by the district court, found that Kodak's differential pricing policy may constitute unlawful tying. Under the policy, customers purchasing both Kodak's refurbished printer components (the tying product) and its Versamark ink (the tied product) received a discount, whereas prices were higher for customers purchasing only components and no ink. Collins, Kodak's competitor in the Versamark ink market, alleged that Kodak was using the policy and its 100% market share in the refurbished printer components market to:

  • Coerce customers to buy its ink
  • Achieve a monopoly in the Versamark ink market

Differential pricing can constitute coercive, unlawful tying if the discount allows the tied product to be sold below cost, and selling the tied product below cost makes it unreasonable for a customer to buy the tying product without also buying the tied product. The Sixth Circuit held that Collins could likely prove that Kodak's pricing policy was unlawful tying because:

  • Kodak's admissions in its appellate brief regarding ink profits likely show that the cost of ink was below cost
  • Kodak likely had market power in the refurbished printer components market

For more information on below-cost pricing, see Practice Note, Customer Loyalty Programs in the US.

Mandatory survey filings for U.S. companies with direct investment abroad

U.S. companies that own or control 10% or more of the voting stock of a foreign business enterprise (making it a "foreign affiliate") must file a BE-10 Benchmark Survey, as required by the U.S. Department of Commerce's Bureau of Economic Analysis (BEA). Companies should review their compliance programs to ensure timely completion and filing of the surveys.

The BEA prepares official economic statistics to gauge the performance of the U.S. economy and the role of the U.S. in the global economy through mandatory quarterly, annual, and benchmark surveys. The BE-10 Benchmark Survey is the most comprehensive survey of U.S. direct investment abroad and must be completed every five years. Companies must provide information on transactions with their foreign affiliates, including:

  • Sales and employment data
  • Contract manufacturing services
  • Financial and operating data
  • Import and export business

The deadline to file for companies with 50 or more foreign affiliates is June 30, 2015, while the deadline for those with less than 50 foreign affiliates was May 29, 2015. Civil fines for failing to file can range up to $32,500 and criminal penalties can include fines up to $10,000 and up to one year imprisonment.

For resources to assist counsel in complying with U.S. international trade laws, see International Trade Toolkit.


About Practical Law

This look at the major issues on the horizon for corporate counsel comes from Practical Law – an online legal know-how service. View all the looming issues now – compliments of Practical Law The Journal, which covers the latest transactional and compliance topics that impact your practice. To gain access to more related know- how resources, please visit us.practicallaw.com.


NEED PRACTICAL KNOW-HOW? GO