WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

GUEST OF HONOR: Michelle Banks Executive Vice President, Global General Counsel, Corporate Secretary & Chief Compliance Officer, Gap Inc. WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

THE SPEAKERS

Michelle Banks Robyn Crowther Mark Krotoski Executive Vice President, Partner, Caldwell Partner, Morgan Lewis Global General Counsel, Leslie & Proctor, PC & Bockius LLP Corporate Secretary & Chief Compliance Officer, Gap Inc.

John Yslas Jessica Perry Cristina Shea Partner, Norton Rose Fulbright LLP Partner, Orrick, Herrington Partner, Reed Smith LLP & Sutcliffe LLP

(The biographies of the Distinguished Panelists are presented at the end of this transcript. Further information about the Directors Roundtable can be found at our website, www.directorsroundtable.com.) TO THE READER General Counsel are more important than ever in history. Boards of Directors look increasingly to them to enhance financial and business strategy, compliance, and integrity of corporate operations. In recognition of our distinguished guest of honor’s personal accomplishments in her career and her leadership in the profession, we are honoring Michelle Banks, Global General Counsel of Gap Inc., with the leading global honor for General Counsel. Gap Inc. is a global retailer comprised of the Gap, Banana Republic, Old Navy, Athleta, and Intermix brands. Michelle Banks will address several initiatives, including the company’s work to empower women. Following her remarks, the panelists will discuss a range of topics, including employment, cyber risks and other cyber liability insurance, diversity, and dispute resolution.

The Directors Roundtable is a civic group which organizes the preeminent worldwide programming for Directors and their advisors, including General Counsel.

Jack Friedman Directors Roundtable Chairman & Moderator

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Michelle Banks is Executive Vice President, consortium of 26 North American retail- Global General Counsel, Corporate Secre- ers, and Chair of the Board of Directors of tary and Chief Compliance Officer of Gap Minority Corporate Counsel Association. Inc. (Gap, Banana Republic, Old Navy, She is also Co-Chair of UCLA Law Women Athleta, and Intermix) located in San Fran- LEAD and serves as a Commissioner on the cisco, California. She reports to the Chief American Bar Association’s Commission Executive Officer and is a member of his on Women in the Profession. senior leadership team. Michelle currently leads the Company’s global equity, gover- Michelle has been recognized as a Most nance, integrity, legal, and privacy functions. Influential Woman in Bay Area Business During her tenure at Gap Inc., she has also and Corporate Counsel Diversity Champion overseen the foundation, franchise services, by the San Francisco Business Times, a sustainability and government affairs, and Most Powerful and Influential Woman by public policy functions. Michelle joined the California Diversity Council, a Woman of Michelle Banks Company in 1999. Achievement by Legal Momentum, and a Top Executive Vice President, Global General Counsel to Watch by Corporate Board General Counsel, Corporate In addition to her current role at Gap Inc., Member. In 2014, Santa Clara University Law Secretary & Chief Compliance Michelle is the Senior Executive of the School presented her with their Social Justice Officer, Gap Inc. Alliance for Bangladesh Worker Safety, a and Human Rights award.

Gap Inc. For more than 45 years, Gap Inc. has stood A diverse group of women make up for opportunity and equality. Doris and Don 74% of our employee base. And women Who We Are each contributed an equal amount to open are the majority of our customers. Around Doris and Don Fisher opened the first Gap that first Gap store. They also shared an the globe, women control 65% of purchases store in 1969. The reason was simple: Don unconditional commitment to make a pos- and about $28 trillion of global consumer couldn’t find a pair of jeans that fit. itive impact on people whose lives we touch. spending each year. They never expected to transform retail. But Starting with Doris, women have always they did. We are on a journey to be the best fashion been vital to our success. In 1969, having retailer, from value to luxury, in the world. Guided by humility and a strong desire a woman and man co-found a company, This will be achieved by delivering great to win, the Fishers grew their company with the woman having an equal stake, product to our customers and continuing thoughtfully. Customers responded. was revolutionary. to be an inclusive employer, that is the best place for women to work and shop. Today, Gap Inc. is a leading global fash- We have a proud tradition of women ion retailer with five brands — Gap, leaders. From store managers to division While many things have changed since Banana Republic, Old Navy, Athleta and presidents, to the women who over the 1969, the principles on which we were INTERMIX — over 3,700 stores and more years have run and helped to grow each of founded have stayed the same: operating than 130,000 employees. Customers in our five brands, to our current female lead- with values and ethics, and delivering great over 90 countries can buy our products. ership team members. product to our customers.

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JACK FRIEDMAN: I’m Jack Friedman, Chairman of the Directors Roundtable. We are a civic group which has done about 800 events globally. We’ve never charged anyone to attend, and our mission is to do the fin- est programs for Boards of Directors and their advisors, including General Counsel.

We’re very privileged today to present the leading World Honor for General Counsel to Michelle Banks, Executive Vice President, Global General Counsel, Corporate Secretary & Chief Compliance Officer, Gap Inc. Michelle has a very interesting back- ground. She was in private practice; she’s a graduate of the UCLA Law School. We were actually at the law school overlapping one year, although I didn’t know her at the time. She has important activities outside her cor- porate responsibilities. She’s the Chairman of the Minority Corporate Counsel Association, which is the leading group for minority corporate counsel in the country. She’s also going to talk about her work with the retail industry, including Bangladesh.

I would like to explain the nature and the Gap Inc. is a $16 billion global apparel We recognize that the most sustainable purpose of the series. Directors around the retailer comprised of the Gap, Banana progress can be achieved when business world have told us that people do not really Republic, Old Navy, Athleta, and Intermix results are proven. One example of this understand what their companies do. They brands. Gap Inc. continues to rank as a commitment to people and communities at wanted a series with integrity, where busi- top corporate citizen, with recognition as Gap Inc. is our Personal Advancement & ness leaders and General Counsel can talk the World’s Most Ethical Company, the Career Enhancement program, or what we about their companies, their legal depart- Brand That Changed the World, Hundred call the “P.A.C.E.” program. This program ments, and how important it is to be a good Best Corporate Citizens, and recognized benefits female garment workers who make citizen, so we have provided this forum as on the Dow Jones Sustainability and the our clothes throughout our global supply part of our many programs that we do. Corporate Equality Indices. chain. Our P.A.C.E. program empowers We’re very pleased that Michelle accepted women to expand their horizons and our invitation, and that Gap Inc. will be We were founded here in San Francisco change their lives through education and featured today. We would like to have her in 1969, in a single store. Today, we’ve professional opportunities. To date, more start now. Thank you. grown to more than 3,000 stores globally. than 30,000 women in 10 countries have We have more than 130,000 employees, taken the educational steps to participate MICHELLE BANKS: Good morn- and our customers can buy our products in the P.A.C.E. program. They have gained ing. Thank you, Jack and the Directors in 90 countries around the world. While confidence and acquired skills through Roundtable. One can hardly feel worthy of an many things have changed at Gap the com- this program. The program, very impor- honor with “world recognition” in the title! pany since 1969, the priorities that we were tantly, generates business results, helping [LAUGHTER] Thank you all for coming to founded upon have not. We want to delight to reduce turnover and absenteeism, and this breakfast so early, and I really want to say our customers with quality clothing, and at increase productivity and promotion. that I’m very grateful for the Gap Inc. legal the same time, we want to do what’s right. team that I work with, and for all of our exter- Our philosophy is simple: we seek to make Based on these proven results, we’ve recognized nal partners. Many of you are here today and a positive, lasting change on the people and the opportunity and the potential to achieve have been longtime supporters, so thank you. in the places where we do business. an even larger impact, and last month, some

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of you might have seen our CEO, Art Peck, One of our top priorities at Gap Inc. is announce at the Clinton Global Initiative that to make sure that we are viewed as a great we will seek to reach one million women with place to work. Not all organizations are the P.A.C.E. program by 2020. We want to viewed as a great place to work for women. move beyond our factories into the communi- A Wall Street Journal article earlier this year ties where we do business around the world, provided a statistic that you would have and we want to strengthen the impact that thought was from history: women working women and girls can have around the globe. full-time in the United States last year earned This is something that I am very personally 82.5 cents for every dollar a man earned. excited about. As someone who has had the More alarming is that in my own profession opportunity to pursue an education and gain — the legal profession — women attorneys skills, I am personally very excited about the earned 56.7% of their male counterparts. I P.A.C.E. One Million Women program. have long wondered how it’s possible that we go to law school at 50%, and when you I’d like to try to bring it to life for you. If get to women General Counsel, it drops to you would just watch this brief video, telling 20%, and when you get to women equity what the difference this program has made partners, it drops below that. in one woman garment worker’s life. only the right thing to do, it’s good for busi- At Gap Inc., we believe equal work deserves ness. In 1969, when they opened the first [Click to See Video] store here in San Francisco, they each put equal pay. In today’s society, this should be in an equal investment. At the time, their the standard. As the national conversation As you can see, Gap Inc. is committed to idea of equal partnership was pretty revolu- around gender equality grew last year, we creating opportunities for women around tionary. Women have, since then, been vital thought it would be beneficial to check the globe. to the success of our company. Gap Inc. has in and really see, scientifically, how we committed to — and has continued to pri- were doing. We knew that equality and Continuing our values-based culture, oritize — diversity and inclusion, especially opportunity were inherent in our DNA, Gap Inc. promotes strong ethics across our the promotion of women, since our found- so we wanted to engage a third party company and our business. This is sup- ing. Today, four members of our board of to check us. ported by a code of business conduct and directors are women, and Doris Fisher still my Global Integrity Team within our Legal remains as an honorary lifetime director, So it was not a surprise when we looked Department. We take corporate compliance participating in every board meeting. at our data, and we had it vetted by a third very seriously. Our comprehensive program party, and we concluded that we pay equal is designed to ensure that all of our employ- In addition to my role as global General for equal work. Very significantly, we pay ees and our board of directors are meeting Counsel, women serve as Gap Inc.’s Chief equally for the same job, men and women, legal requirements by going beyond that, Financial Officer, Head of Global Supply whether you are in the U.S., Tokyo, and providing appropriate governance and Chain, Head of Talent & Sustainability, Shanghai, London — wherever you are in transparency to really do what’s right in and President of three of our five brands. the world, within our company. everything we do. A combination of written In fact, as of this year, a majority of our guidelines, formal processes, and manage- Chief Executive Officers’ Senior Leadership That was a moment of pride for us, but ment and board oversight help us ensure Team are women. it’s something that we also decided to share that we work with integrity. externally once we had validated it. In part, Within Gap Inc., female representation it was recognizing that while we’re not per- I am really pleased to work at Gap Inc. and at all leadership levels is meaningful, and fect, we did want to be a role model, and we feel the strength of the commitment amongst meaningfully above societal and retail aver- did want to try to inspire others. our senior leaders, including our board of ages. We recognize, however, that there is directors, with respect to the importance more work to do. We are focused on build- We remain, to this day, the first and only of doing business in the right way. ing a deep bench of women who are ready to Fortune 500 company that has validated lead our company forward. We offer women and disclosed our pay practices. Our com- Gap Inc. founders Don and Doris Fisher many growth and professional development mitment to equality builds on our decision built a company and a culture with a long- opportunities, and this is very important to to raise our hourly wages for our employees standing belief that advancing women is not building that bench. last year. Seventy percent of our employees

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are women, and it has a great impact to Gap Inc. continues to rank as a top corporate citizen, with raise the hourly minimum wage to ten dol- lars voluntarily. This benefitted more than recognition as the World’s Most Ethical Company, the 60,000 employees across the United States Brand That Changed the World, Hundred Best Corporate over the course of this year. Citizens, and recognized on the Dow Jones Sustainability As former DuPont General Counsel Tom and the Corporate Equality Indices. – Michelle Banks Sager said — and for those of you who don’t know Tom, he’s a diversity icon — when The past two successive leaders of the We have a long history of supporting women, he received this recognition in 2011, I Gap Inc. Legal Department have been but everyone has work to do in supporting read his speech, because I knew it would women, and I am very grateful for the all forms of diversity. I strongly believe that be inspiring. He said, “It is obvious to us mentorship of Anne Gust Brown, and we can make a difference in the garment that diversity is a business imperative and the sponsorship of Lauri Shanahan. I am industry. It’s an industry that provides the critically important to how we provide legal well aware that I am standing here today on first job for many people, and takes them services and to how we connect with the their shoulders. out of subsistence agricultural existence. external world.” Across our brands and businesses, Gap Outside of the apparel industry, women At Gap Inc., we know that appreciating and Inc. maintains a commitment to integrity tend to have fewer alternatives than their understanding the diversity of our custom- and inclusion, and we have zero tolerance male counterparts. But within Gap Inc. ers and our employees around the world for discrimination of any kind. We firmly suppliers’ garment factories, which operate will make us more successful, and we want believe that corporations should contribute at the highest international standard, we everyone to feel invited to our workplace to the communities in which they do busi- can provide a paycheck for many people and to our stores. ness. I am proud to report that last year, around the world, and we seek to do that 50,000 employees in Gap Inc. volunteered at the same time we seek to drive positive In Gap Inc.’s Legal Department, we have over 500,000 hours in our community. We change in those workplaces. a sustained commitment to diversity and serve youth through programs like This Way Ahead, Plan Ahead, and Camp Old We want our efforts to be greater than one inclusion. We have a three-part strategy Navy, and we have impacted 5,500 com- company alone, and that’s why we’ve joined focused first on fostering an environment munity college students through Gap for a number of collaborations, from the She of inclusion within our department, and Community Colleges. Works Partnership with the World Bank and developing our talent to their full potential, the UN, that will impact 300,000 women increasing diversity in the legal profession, We are also committed to giving back to the over the next two years in a collaboration, and particularly the pipeline, through pro community through pro bono activities. We to signing the UN Women’s Empowerment bono activities, and holding our network of were one of the founders of the Pro Bono Principles, which our new CEO did this external law firms — many of you are in the Alliance, and we serve as the in-house year as one of his first actions. We hope to room, so thank you for that — accountable legal department to four local non-profits impact women in the marketplace, in the for their diversity and inclusion. We serve here in San Francisco — Breakthrough workplace, and in our communities. as vocal advocates, giving speeches like these Collaborative, First Graduate, Juma Ventures, at many organizations, and participating in and Youth Uprising. I have worked at Gap Inc. for 16 years, and the activities of many dedicated organiza- I’m very proud to work there, because of our tions that prioritize diversity and inclusion Through our Pipeline program, we are hop- integrity and our inclusion. I hope that every- the way we do, including the California ing to advance diversity in our profession, one here, whether you’re a legal or another Minority Counsel program. and we are hoping to impact the youth in professional, will take back to your office an this community. It’s unacceptable to me, inspiration to do something — maybe some- I personally serve as the chair of the board personally, that our profession — the legal thing very small — in the interests of greater of directors of Minority Corporate Counsel profession, which is so critical to achieving diversity and inclusion, and in supporting Association, or MCCA, as we informally justice in our society — is one of the least women and girls around the globe. call it. We are committing to advancing all diverse white-collar professions in the United forms of diversity to achieve a stronger, more States. Our lack of inclusion prevents us Thank you for the opportunity to speak with relevant profession, and to help diverse law- from reaching the best legal solutions and you. I’m not going anywhere — I’m going to yers succeed in every stage of their career. leveraging the best potential talent. sit on the panel with my fantastic colleagues

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P.A.C.E. program. It has resulted in better and responsible to a colleague. I assume that employees and people being more pro- there must be other stories like that, that ductive and getting promoted, having less nobody even knows occurs. absenteeism, and leaving the workplace less. We truly believe that inclusion will not only I would now like to read a letter from improve our own business, but improve the the Dean of the UCLA Law School, economy as a whole. I’m pleased to say that Jennifer Mnookin. there have been a number of external sto- ries on this in the media recently, that if On behalf of the entire UCLA School of only we could tap into women and girls, Law community, I would like to extend my we could achieve great things. The greatest deepest congratulations to Michelle Banks thing for me, personally, having viewed on this remarkable honor by the Directors the P.A.C.E. program in Delhi, India and Roundtable. I’ve had the great pleasure of in Dhaka, Bangladesh, is that the result getting to know Michelle through her work over here. I would like to give a personal is not about one woman working in our with our alumnae initiative, UCLA Law thank you to the Directors Roundtable; factory; it’s about their communities. They Women LEAD, and I’ve seen firsthand the to the 115 members of the Gap Inc. legal lift up their families, and then they lift up characteristics in Michelle that are being so team, that do amazing work every day, and their communities. The stories that some deservedly celebrated today. of these women would tell about how they many of them are here today. Again, thank Those here to celebrate and honor Michelle not only took the skills that they learned you to my partners who are here. I would already know about her distinguished track through the P.A.C.E. program, and they like to thank Orrick Law Firm, who has record of professional success, including her resulted in them being more successful in been our external partner for a very long most recent role as Executive Vice President, the workplace. They then were motivated, time — thank you for hosting us here today. Global General Counsel, Corporate as the woman in the video mentioned, to Secretary and Chief Compliance Officer of educate their girls, to empower their girls, JACK FRIEDMAN: I’d like to address Gap, Inc., so I will not delve into that here. to go out into their communities and come one or two questions to Michelle before we But I do want to say that Michelle Banks has up with systems for cleaner water and for move on to the other speakers. For thou- been a veritable force of nature in helping us other important things that people need — sands of years, and literally everywhere in to conceptualize and build our new alumnae safety in neighborhoods. I really believe that the world, virtually the most important initiative at UCLA Law School: UCLA Law inclusion will make us a more successful work that women could do to supplement Women LEAD, which she currently co-chairs. company and result in our customers want- farm income was in the textile industry. LEAD stands for Leadership, Empowerment, ing to shop with us. But it will also be of They could take in wool or cotton or other Advancement and Distinction, and Michelle benefit to society as a whole. I feel like I materials and work on it at home. Then truly exemplifies all four of these qualities. have the world’s greatest job, because I get maybe once a month, the business person Though this initiative and network started only to do it all. would come by and collect it. The garment a year ago, the early efforts — substantially industry has a unique tradition of giving spearheaded by Michelle — to offer JACK FRIEDMAN: Thank you. Since we women opportunities. It’s wonderful to fantastic programming, valuable mentoring, are in the Bay Area, I’d like to tell the follow- hear that it continues today. networking opportunities, and a sense of ing story. I happen to have known a woman meaningful and intergenerational connection who was the first woman to win the Nobel You referred to why it’s important to Gap, have been, honestly, nothing short of prize in medicine after Madame Curie. Her not only for the humanitarian/social justice dazzling. This investment Michelle has made daughter was admitted to Stanford Business side, but also how it may be an important in LEAD links not only to UCLA Law, but to an benefit from the business success aspect. School. After she was admitted, she found issue she has long been passionate about: Why should companies have an interest out she was pregnant. She thought that she addressing the challenges women face in the in terms of their business success, to show would have to make a choice between school legal field, and helping to find new ways to that they have a good heart? and taking care of the baby. She decided address them. to stay in school, and when she started at MICHELLE BANKS: I mentioned a Stanford, her fellow students volunteered Though of course it takes a village, Michelle couple things. We’ve really been amazed to organize themselves so that they could has truly been at the very center of UCLA’s with the results that a number of our part- babysit at the school while she was in class. LEAD initiative – indeed, it’s fair to say she’s ners have reviewed for us in terms of the It’s wonderful that people can be so helpful genuinely been a “but-for” cause of its early

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success. She is in a true sense a connector, of Law are connected. The group is the bringing the UCLA Law community together brainchild of UCLA School of Law Professor behind a shared vision of empowering Emeritus (and former Dean) William women, a vision that she has both strongly Warren, and current Directors Roundtable supported and exemplified throughout her Chairman Jack Friedman – another UCLA own career. She has opened her home to Law alumnus – who recognized the value host more than 100 women for a Bay Area in bringing together the leadership of the reception; chairs the committee to create business and legal communities. What and build our virtual network, already more started as an idea has grown into the than 1,000 strong; regularly speaks on preeminent professional education forum panels throughout the world; and spends for corporate directors and their advisors. countless hours on precious Sunday I – and the entire UCLA Law community – afternoons working to make LEAD stronger. are so very proud to count both Michelle and Jack among our UCLA Law alumni. Michelle has demonstrated her dedication Michelle truly embodies the values we work to empowering women at every level, so hard to instill in all of our graduates. and I’m so grateful that she is wielding a We applaud and celebrate her continued portion of her remarkable energy and talent commitment to equity and excellence. for the benefit of UCLA and its students and graduates. I would now like to introduce the Distinguished Panelists: John Yslas, part- As I’ve seen firsthand in our board meetings ner at Norton Rose Fulbright; Jessica Perry, and elsewhere, Michelle has an extraordinary partner at Orrick, Herrington & Sutcliffe; crowd with us today. It’s a very important ability to use her tremendous knowledge to Robyn Crowther, partner at Caldwell Leslie topic that I look forward to getting to more inspire community, and uses her authenticity & Proctor; Mark Krotoski, a partner at later. to promote openness and collaboration. Morgan Lewis & Bockius; and Cristina She is vivacious, energetic and engaging – Shea, a partner at Reed Smith. The first issue touches on the wage and precisely the type of leader all of us want hour class action space, I’m seeing a few to learn from, listen to, and have in our I would like to have John Yslas give his emerging issues to be thinking about. One corner. She also has that remarkable quality opening remarks. of them is off-the-clock work, in particular — of making everyone she interacts with feel in this day and age of technology and smart special. She engages with laser-like focus, JOHN YSLAS: Thank you, Jack. Just a lit- phones — with hourly employees, there are and manages to make whomever she is tle bit about my background to set the stage a lot of class actions for off-the-clock work. speaking to feel, for that moment, like she for what I’m going to briefly talk about. I’m Engagement in communications after hours or he is the center of the universe. She is a partner at Norton Rose Fulbright. The with hourly employees is a big one. Other full of ideas and yet able to take on board firm has close to 3,800 lawyers around the issues that are less thought of are employees the input of others. Her passion and her world. My practice deals largely with high- that work in the field that are entering data enthusiasm are contagious, and she has the stakes wage and hour and consumer class after hours. This is a big area in wage and ability to keep a conversation on track while actions, and larger employment matters. hour, and I don’t think the law has really still making those in the room feel included I’ve just picked out a few select issues that caught up with it, or folks aren’t thinking and involved. I am certain that the lawyers are important to be thinking about, and with it. You can have small amounts of time who have the chance to work with her at high-level, practical solutions and preven- that, over a period of time, over years, add Gap feel like they hit the jackpot; I have tion in the brief time I have. up to a large matter. seen firsthand, the way that the more junior lawyers on the LEAD board regularly use her I also want to mention because we’re going The other issue in the wage and hour arena as a mentor and a sounding board. to have a discussion later about diversity is technical violations, such as wage state- It’s always gratifying when one of our alums is in the Roundtable that I serve on the ments, or even calculation of overtime rates recognized for their professional distinction, Mexican-American Bar Foundation board — small things that folks maybe don’t think especially one so deserving as Michelle, of directors, and the California Minority about. For example, there are bonuses that and this, of course, is no exception. But it’s Counsel Program board of directors. I’m are based on objective criteria being fac- actually that much more special because really honored that we have our executive tored into the rate of pay. These relatively the Directors Roundtable and UCLA School director and former executive director in the small items can multiply over time.

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The issue that immediately comes to mind We want to delight our customers with quality for me is prevention. What does that mean? clothing, and at the same time, we want to do what’s It deals with investment on the front right. Our philosophy is simple: we seek to make a end with a highly focused compliance department that’s knowledgeable and positive, lasting change on the people and in the places detail-oriented, working oftentimes with out- side counsel. It deals with clear procedures, where we do business. – Michelle Banks clear messaging. What gets lost sometimes, representative action, albeit with a shorter certain kinds of policies and procedures also, is the training for many levels. In large statute of limitations than a class action, but under the law or with the compliance doc- organizations, what I see, on occasion, is it can’t be waived. Query, will the United uments, that can spawn into completely the message gets clearly conveyed at the top States Supreme Court take this up at some different issues. You start with something level, but it gets diluted at each level down. point? Maybe, what’s sometimes frustrat- very small, with an individual employee, By the time you get to a lower level of man- ing for employers, is when you look at the and it morphs into a big class action, and agement, it’s been diluted enough, and over PAGA actions, they don’t have to be certified can also morph, potentially, into a govern- time, that it is forgotten. We all get involved as class actions. Yet, the plaintiffs’ lawyers are mental investigation. in our own sort of myopic world, and then attempting to take class-wide, company-wide there can sometimes be a tendency to think discovery. It’s a growing area and an evolving I’ve tried to give you a little bit of a high- about profit or utilization in our own par- area of law in my space, that I could give a level view of things and emerging issues in ticular space. It’s at the expense of these whole hour on — which I obviously won’t! my space, and when all else fails, then a larger issues, maybe working off the clock or topic for a different day is how to aggres- reaching out to people after hours. The other thing I’d like to note is, for sively defend these class actions, which is example, just this month, Governor largely what I do. It’s important that you have constant moni- Brown vetoed AB 465, which was a mea- toring and auditing of these kinds of things, sure passed by the Legislature to essentially JACK FRIEDMAN: Thank you. and training, and that it filters all the way prevent mandatory arbitration class action through each layer down. Then by the time waivers as a condition of employment. But Michelle, how many employees does Gap have? folks get to me, which involves class action you can see that there is a constant evolu- litigation, the things to be thinking about tion in this area, in the Legislature and by MICHELLE BANKS: A hundred and now are prevention or mitigation from a the plaintiffs’ lawyers. thirty thousand, approximately. larger standpoint. The first thing that comes to mind is, for example, arbitration in class I really want to note, that the issue of wage JACK FRIEDMAN: They are in many action waivers. This is a growing area of and hour in class actions, and consumer countries and different states? law. The United States Supreme Court has class actions, for that matter, is smaller clearly spoken about the enforceability of errors that multiply. In a refund policy in MICHELLE BANKS: Correct. class action waivers. It’s something to think a consumer class action, the errors multiply about to include in an agreement. over time, and they also have a tendency JACK FRIEDMAN: You and your coun- sometimes to morph into, for example, sel have to be on top of all the different I do have to measure and temper it by say- governmental investigations or compliance requirements; it’s really mind-boggling. ing that we are, after all, in California, and, documents that may come up. They may be not surprisingly, that both plaintiffs’ lawyers unrelated to the litigation, but they might John, what would be an example of how and the Legislature often come up with an be related, and I’ll just cap this by giving big a class action in the employment area attempted workaround. I’m going to give you you an example. can get, at least in terms of claims and the an example. There is a statute in California asserted damages by the plaintiff? called the “California Private Attorneys In the area of wage and hour, you may have General Act,” which is, by short, “PAGA.” folks that feel like they’re not taking meal JOHN YSLAS: I’ve handled cases easily PAGA is essentially when an employee steps and rest breaks. That seems like a discrete where the potential liability is $200 million. into the shoes of a governmental agency issue. But the overall global issue is that Those are nationwide class actions. They to enforce wage and hour laws. What the they are feeling pressure to work hard to not can be as small as 50,000 in a class, and California Supreme Court has found is comply with the law. That can lead to other as big as a million and a half in a class. It’s that you can’t waive a PAGA action. It’s a types of mindsets, including not following routine for me to handle nationwide class

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actions with 50,000 in a class, where there’s a repetitive issue going on across the nation. It generates — potentially $200 million lia- bilities, which is certainly considerable.

JACK FRIEDMAN: Thank you. Our next speaker will be Jessica Perry of Orrick, Herrington & Sutcliffe.

JESSICA PERRY: Good morning! Con- gratulations to you, Michelle, on this honor. Thank you to the Directors Roundtable for having us.

This morning, I want to spend a few minutes discussing the top five ways to keep the boardroom out of the headlines and the courtroom. I’m an employment liti- gation partner at Orrick and I’m frequently in the courtroom handling employment General Act (PAGA) claims and whether response. I’ve seen this play out in litigation issues for employers, so that is the prism they can be severed from the arbitration over and over and over again, when a plain- through which I’m looking at these issues. agreement; whether to exempt certain tiff assumes that bias, instead of some other claims from arbitration for both parties; legitimate reason, has motivated decisions There are probably a lot of different things and whether the employer is prepared to regarding the lack of a promotion or the that we could talk about on this particular pay the entire cost of the arbitration. While failure to receive the best review possible. topic, but we only have a few minutes, so I’ve there has been a lot of litigation around focused on five things to think about from an the viability of arbitration in California, in It is important to combat those nega- employment perspective. Number one would particular, arbitration agreements remain tive feelings and misplaced assumptions be arbitration agreements. As John men- a very interesting option for employers to with clear and transparent criteria and tioned a few minutes ago, there are a variety consider. Adopting an arbitration program well-documented feedback. It helps employ- of tricky issues to think about in California, requires careful consideration and drafting ees understand the expectations and their and the law is ever-changing. At the end of to ensure that they’re as enforceable as pos- performance in light of those expectations, the day, arbitration agreements make a lot of sible in California, which is always looking and it provides a good defense to litigation. sense in many different situations. I bet no for a reason to invalidate them. one in this room would know who Ellen Pao Number three on my list is a process to was, had she had an enforceable arbitration Number two on my list is a transparent question decisions. This can take on a vari- agreement with her employer. promotion and review process. As I’ve seen ety of forms in different organization, both over time through a lot of litigation, black large and small. In a small organization, it There’s a variety of different things to box systems or systems in which promotion may be something as simple as ensuring that consider when thinking about arbitration criteria or review criteria aren’t clear tend to there’s a sympathetic HR person who can provisions — such as whether they should breed distrust and anxiety. listen to concerns. In a more sophisticated be applied only to more senior executives, and larger process-oriented organization, it so that if legal proceedings occur, they occur There’s a very well-written article by Prof. can be a formal review committee that an in a private setting and not on the front Thomas DeLong, who teaches at the employee can appeal to if they have a ques- pages of the newspapers, or whether to Harvard Business School, which talks tion about something or don’t understand implement arbitration for all rank and file about how driven, ambitious people gen- why they weren’t selected or why a certain employees, to avoid class actions through an erally assume the worst about ambiguous personnel decision was made. explicit class action waiver. Other issues to responses. If there is repeated ambiguity, think about are whether to make arbitration they tend to turn those negative feelings There are many options here and it is driven mandatory or whether to allow employees inward. They create worst-case scenar- by culture and what is right for a particular to opt out; how to handle Private Attorney ios in their minds about that ambiguous organization, but in a world in which the

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millennial workforce is only growing, and Gap Inc. founders Don and Doris Fisher built a by 2025 is going to be 75% of the global workforce, having these types of processes, company and a culture with a longstanding belief that in which employees can get information, advancing women is not only the right thing to do, it’s receive feedback and feel like they have a clear understanding of decisions as they’re good for business. In 1969, when they opened the first made can be enormously helpful to keep store here in San Francisco, they each put in an equal companies out of the courtroom. investment. At the time, their idea of equal partnership Number four on my list is privileged audits. was pretty revolutionary. – Michelle Banks For years, I’ve talked about audits and how helpful they can be in the workplace, and may be problematic, and you want to make So, there is a lot more I could say on I’ve traditionally talked about them a lot in sure that you’re dealing with those issues in each of those five tips, but with the time the wage and hour context. A large part of a privileged setting as you try to solve them. we have today, that is a good introduction my practice is wage and hour litigation, and to my top five tips for how to keep the wage and hour was an area in which I often Finally, make sure that you fix the problems company out of the media headlines and did audits to try to find issues and correct that you find. It’s very likely there will be out of the courtroom. them before there was litigation. Audits are something that you need to address, and going to become even more important with you want to make sure that you do in fact JACK FRIEDMAN: Thank you. A speaker the passage of SB 358, which is California’s deal with the issues that you find. at a prior event told about a company that version of the Equal Pay Act. This is an area had to lay off 22% of the workforce but in which employers can invest to look into Number five on my list and the final point needed to keep the remaining 78% moti- particular compensation and promotion I want to make has to do with exits and vated. One of the elements of handling practices, and determine if there are issues transitioning employees out of organizations. exits was to remind the 78% that the fact that need to be addressed, and address I’ve seen in litigation in the last couple of they had worked at that company was going them before litigation strikes. years that this really makes a difference. to be on their résumé for the rest of their Sometimes you have to cut the cord with an lives. Even if someday they wanted to leave, A couple of key things about conducting employee that needs to leave your organiza- try to help the company be successful now. audits: One, you need a commitment up tion, and that’s fine and should be done, If a company on their résumé had prob- front from management on this important ini- but softening that blow with severance can lems but ended up being successful, and tiative. Management needs to be committed often help. I like to think of severance agree- they were part of that change, it would be to doing the project and addressing what- positive for them. ments as a tool. How somebody leaves, and ever issues are uncovered. Two, an employer the feelings that they leave with and the way needs to be prepared to devote the necessary Michelle, how do you keep the morale up that they feel that they were treated in their resources to the audit. There’s no one-size- when a division is not doing well? exit is important for morale and culture for fits-all for an audit; they come in all shapes employees who remain, but it’s important for and sizes. So what is essential is figuring out MICHELLE BANKS: Keeping morale up other reasons, as well. Too often people over- what resources are available, what priority is very challenging when business times are areas need to be audited, and coming up with look how they can use transition packages to hard. Unfortunately, I have a fair amount of a plan that works for the company. There’s help people find their next role, to leave the experience with it. nothing worse than doing a really bad audit, relationship in a very amicable way, and have so I believe it’s better to do a deep audit in cooperation from that exiting employee in The biggest thing is engagement — open one particular area than trying to do an overly the event that you do have future litigation. door, being communicative with peo- broad audit where you just touch things but You often don’t know that you may need to ple, listening to people. It’s what Jessica don’t really figure out what the problems are call on a former employee for information in was alluding to — treating people well or the solutions. Three, maintaining the attor- litigation or that you need cooperation for when they’re exiting or treating people ney-client/work product privilege on the audit some business initiative. Having a cordial well when they’re joining goes a long way. is probably the most important thing about relationship with that former employee can Most people that bring wrongful termina- it. You’re bound to discover some things that make a world of difference in that situation. tion litigation feel that they were treated

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unfairly in some way, so communication venture capital firm; where a senior woman and engagement with people is the most felt that she had not been treated properly. important thing. Could you tell us, besides the fact that one of the parties is very famous, any comments You come across all different kinds of cases about the significance of the case and what when you work with a variety of different it means for other companies? companies, and sometimes you have an employee, or an exemployee bringing a law- JESSICA PERRY: That case was an interest- suit who’s just making things up out of thin ing convergence of events, in that it was, in a air. Sometimes you have people who have lot of ways, the right issue at the right time; it entirely different perceptions. If two people just happened to be the wrong case and the sat through the conversation and heard two wrong defendant. For those of you who don’t entirely different things, the truth lies some- know, Jack is talking about the Pao v. Kleiner where in between. Every case is different, Perkins gender discrimination and retaliation and the fun part of the job is trying to fig- claims based on a failure to promote. ure out which kind of case you have. It shined a very bright light on an import- JACK FRIEDMAN: Right. I wanted to ant issue, and people are talking about the bring in John just for a second and ask, issues, so in a lot of ways that is positive. “What is the perception of juries — and it the jurors stayed behind. Even though we Certainly, we’ve seen more in the media can change — when you have the so-called prevailed, they refused to talk to the other about the issues and I think more women little person against the big corporation?” lawyer that I prevailed with. will bring claims. It is challenging though, because certainly in the Pao case, and oth- JOHN YSLAS: When you’re representing He is a great lawyer, just doing his job, ers, the evidence isn’t there and doesn’t a big company, it’s important to actually be and my observation does not even remotely support the allegations being made. So liked. I guess what I’m telling you, Jack, reflect anything disparaging about him. But there will certainly be more litigation in this is that my feeling is, when I walk in as a what I’m trying to underscore is that it’s space, it will just be harder to figure out trial lawyer — and really, I started and made important, to me as a trial lawyer, that you which claims have merit to them. my bones in a small firm trying cases right be yourself in the courtroom; that’s actu- away out of law school — but it was import- ally true in life. But when you present, The case also showed how interested the tech ant that the jury like you and feel like you’re you have to remember, you’re not just pre- media is in venture capital and in technology the face of a fair company. senting black and white issues and bullet in general. The press and the media atten- points; you’re talking to people. People have tion that the case received was really quite JACK FRIEDMAN: You, the lawyer? a disposition, sometimes, to think of some remarkable for an employment case; I can’t companies as this big faceless company. think of a time since probably the Weeks v. JOHN YSLAS: Me, the lawyer, and you Baker & McKenzie case that there’s been so have a representative there, too, so you need It’s important that, as a trial attorney, you much attention on an employment case. to have folks prepared in that manner. I’ll present and you understand these are real That was interesting as well, and it showed give you a quick anecdote about what I people. My clients are really decent people, that people are interested in hearing about mean. I tried a case many years ago with a and I’m a decent person. As a trial law- these issues. And when you have salacious co-defendant, and we felt like we were really yer, I’ve found that’s something that’s really details, whether they’re true or not, people winning this case. It was a 14-plaintiff trial, evolved over time. The years have gone by; pay more attention, especially in an industry about five weeks long, and I couldfeel that it’s something I really try to slow down in that people don’t know that much about. the jury didn’t like how aggressive the law- trial, collect myself and remember I’m pre- yer representing the co-defendant was being senting not just facts, but I’m presenting JACK FRIEDMAN: Thank you. Our next with some of the plaintiffs who were lower the face of the company and who we are speaker is Robyn Crowther of Caldwell wage earners. I felt like it wasn’t necessary, and that we’re good people. Leslie & Proctor. that kind of aggressiveness. Or if we were going to go into this space, we could be a JACK FRIEDMAN: Jessica, you were ROBYN CROWTHER: Good morning. lot more, “respectful” is the word I used. To a lead attorney in the executive employ- I consider myself to be part of a dying make a long story short, after trial, three of ment-related case with Kleiner Perkins, the breed of general commercial litigators. I

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came to me or in the process of us handling that. There can be a deposition where you it — which is the worst of all possible worlds get to elect who your corporate representa- and has not happened, ever. tive is going to be.

But the truth is that the General Counsel, Often, far too late in the game, companies even for a litigator, touches on what I do might think about, “If this case goes to trial, every single day, because, as John was just who will be the face of the company that’s speaking, who the company is, is critical in at counsel table?” Often that person needs litigation. The General Counsel’s office is to testify. It can be very difficult to find the critical in defining who the company is in right person for those two things. It needs to be the person who has the time to sit a couple of ways. As we heard in Michelle’s in a courtroom two weeks, three weeks, talk, this is a company who knows who they four weeks, six months. It needs — if the are and knows what their values are, in a “big company is going to have the same person picture” sense. A large company also needs don’t have an expertise, and since we are representing them day after day, it has to be honoring General Counsel — and a won- to know who they are, and the litigation strat- somebody who has time. derful General Counsel today — I wanted egy. I recently heard a report of a General to think about something that might be Counsel who decided that when their com- On the flip side, it often needs to be some- interesting to people across various practice pany was sued by non-practicing entities for one who can take responsibility credibly for areas. Because if I talked about what I do patent infringement, that they were going to the decisions that the company has made. on a daily basis, you’d all be asleep already. litigate the case to its finality, in court. Rarely are those people the ones who have Unfortunately, I have colleagues who will two weeks, four weeks, six months to sit in engage me on that, and I’ll try to stay away It was either going to be a motion ruling a courtroom nine to five every day and be from the nitty-gritty today. or a trial, and that was going to be how the face of the company. they decided the case. They wanted the I’ve had the opportunity to work with Gap deterrent of that notoriety that this was not A couple of years ago, we tried a case for Old Navy where we had to find a corporate and its legal department for more than 10 a company that you could extract a quick representative who was going to participate years, and to really appreciate what a wonder- settlement from; that they would invest up front. That was a company who wanted to with us; and the truth is that the people ful General Counsel and legal department be known as a litigant. who were personally involved in the deci- can do. I was embarrassingly senior in my sions that were made, many of them had career before I realized that in-house lawyers On the other hand, the Director of Outside left. The plaintiff’s counsel used, in his have clients, and sometimes those clients Litigation for a major studio once told a opening statement, a placard that had the are far more difficult than who I consider to colleague of mine that if a case of theirs names of the people who were no longer be my clients. To watch a legal department went to trial, he thought he had failed in with the company. I’m not sure what they were supposed to have done by leaving the that navigates that area proficiently has been doing his job. His job was to make sure, as company, but it was definitely nefarious! a real pleasure. Jessica said, that you never end up in the [LAUGHTER] However, because the Gap courtroom; that you don’t have notoriety. Legal Department knew their business The General Counsel’s job is incredibly The General Counsel is critical in deciding: unit, they helped us find someone who had complex. I was thinking, while Michelle are we somebody that wants people to know was talking today, of all the different areas the gravitas, the experience, the title and that we litigate, or are we somebody that the commitment to be able to say, “I take in which she participates: diversity, employ- wants that to be quiet? That strategy dictates responsibility for what was done here.” As ment, international, corporate. It’s incredibly a lot of what we do as litigators, and it hap- senior as she was, she put in a tremendous complex. As a general litigator, the truth pens at a very high level. amount of time to sit with us in court, to is that if the General Counsel is familiar prepare for her testimony. So we really had with the day-to-day of my case, it’s usually In addition, the General Counsel’s office the best of both worlds. By the end of the not a good thing! [LAUGHTER] Maybe it and the legal department are involved in trial, those missing employees were not means something is going really, really well — defining who is going to be the face of the mentioned in the plaintiff’s closing argu- though not usually. Usually, something has company in the courtroom as that matter is ment. The placard sat there conspicuously gone really, really badly, either before the case litigated. Sometimes you have choices about off to the side, and plaintiff’s counsel never

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referenced it. Although the plaintiff had advice along the way. As you are going for- been asking for millions and millions of dol- ward and considering disputes in the future, lars in damages and for injunction, the jury just remember, you need to define who your awarded no damages, and the judge awarded company is, and how that’s going to play. no injunction. In large part, they told us, because they didn’t feel that Gap had done JACK FRIEDMAN: Thank you. You anything wrong. That was directly related to gave us some fascinating stories! Our next the fact that we had a credible corporate rep- speaker is Mark Krotoski of Morgan Lewis resentative as part of our team. That doesn’t & Bockius. happen if your in-house legal department doesn’t know your business unit. MARK KROTOSKI: Thank you very much. First, I wanted to also join with That’s when you get to pick who your wit- others in congratulating Michelle for her nesses are, if only. A lot of times, the facts recognition today. Sixteen years at the Gap come to us and those fact witnesses have and also nine years as a global General been determined long ago. They are tech- Counsel, and all the leadership that she’s nical people who don’t communicate with I love the CEO. He’s a wonderful man; they brought to that position. the outside world for a living; they are the have a wonderful company; they treat their CEO of an entrepreneurial company who employees well; they do everything right. He I’m going to be talking about cybersecurity, thinks this entire lawsuit is a huge waste of has a background in sales, so he is a great and that’s something that’s on the minds of time and cannot understand why they have communicator. I was really excited about a lot of people. My perspective comes from to answer questions about it over and over how the jurors were going to react to him. my experience as a Computer Hacking and and over. They are former employees who He didn’t have a General Counsel, so I had Intellectual Property (CHIP) prosecutor here left on bad terms, and frankly have no love to be the one to deliver the news that the in Silicon Valley, and then eventually in for the company that they’re representing. mock jurors in the Southern District of New Washington, D.C., as National Coordinator York thought that he was too tanned to be for the CHIP Program at DOJ dealing with In the written materials, I’ve provided an doing any work. [LAUGHTER] a host of cybersecurity issues. When I go out article from a jury consultant named David and meet with various companies, I see that Parrott who we work with, about preparing Our consultant said, “Could you be a little many companies are taking a lot of steps to corporate witnesses, that has really valuable less tanned by the time of our trial,” which promote and protect cybersecurity. However, information. He tells a story on one of my was going to be in March, and he said, “I’m the consequences and the costs of any weak clients. I had a case where I was representing Mexican.” [LAUGHTER] “So, no, not really!” link can be very significant. For example, a t-shirt company that made the t-shirts with a company may spend a lot of money on the Obama “HOPE” poster on it. The com- We ended up settling that case about a week Information Technology (IT), which may be pany was roped into copyright litigation over before trial, so we never had to appear, and warranted, but one act of inadvertence by an the photograph that inspired that image. It he was allowed to then go outside and pos- employee — leaving a laptop at an airport, for was transformed into art by the artist Shepard sibly get a little more tanned! But that was example — can undermine all those efforts Fairey and then marketed on and given away not something that we could choose; it was and subject the company to very significant on t-shirts that my client had created. not something that we could control. The costs and consequences. only thing we could do was try and prepare A big, high-profile case; the Associated around it. If we had an in-house legal depart- I want to highlight some significant weak links Press was the plaintiff; and we did some ment, who might have been able to help us that we see on a recurring basis that General jury research. The case was pending in the identify somebody else who could be the Counsels and companies can consider. Southern District of New York. My clients face of the company or other fact witnesses, were based in Orange County, California. it would have been a tremendous help. The first, for me, is that any cybersecurity One of the arguments that was being raised must be holistic, integrated and tailored. was whether they had done enough dili- I’m thrilled to have the opportunity to honor Those three elements are very important. gence to be sufficiently aware of the various Michelle today. It has been a pleasure to I’ll start with tailoring, because all infor- parties who owned rights or potentially spend more than a decade working with a mation is different. With cybersecurity, owned rights in this photograph. Their good company that’s trying to do the right we’re talking about information security. hard work was directly on the table. thing and has great lawyers who are giving us The security should be designed around

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sometimes it starts at the top and it may not An attorney-client privilege-protected inves- filter all the way down within the company. tigation will protect the company, allow for Ideally, a company with strong cybersecurity a full investigation, and allow for that can- will have sensitivity to those issues at every did and frank advice that the company will layer, so that if someone at the top or on the need to address many of those issues. board sees a cyber threat or risk, they can immediately address it. And someone who Now what’s important here is often, when is a new employee may see a cyber issue, like there’s a cyber-attack, company counsel, in an unencrypted laptop, and take steps and engaging with outside counsel, will need know what to do to address that situation. to bring in other vendors — like forensic specialists, such as a malware specialist. It’s Another weak link is third-party data trans- important that the privilege cover the forensic fers. Many business models deal with the investigation. Whatever the forensic specialists collection of data that is shared. What we see are doing is at the direction of counsel, so that in a lot of these cases is that once the infor- the attorney-client privilege covers that part of mation is shared, there may not be sufficient the investigation, as well. The privilege allows protections in place. This vulnerability came the company to gather all the relevant facts to the particular information that is being to light just a couple of months ago, when obtain legal guidance and advice. protected and the risks associated with the two enforcement actions were brought by information. You would protect a trade the Securities and Exchange Commission Another weak link can deal with untested secret differently than you might safeguard and also the Department of Justice. In these incident response plans. Now, many com- protected health information (PHI), or cases, individuals abroad were able to hack panies are aware of the importance and role Payment Card Industry (PCI) information. and obtain inside, non-public information of an incident response plan. But ask your- It really takes a tailored approach for mean- and trade on it and profit on these trades. self, “When was the last time your plan was ingful cybersecurity, designed around the The vulnerability occurred not with the tested?” The testing becomes very import- particular information and risks. company that originally possessed the sen- ant, because almost every time a company sitive non-public information, but with the tests the plan, the company will learn some- Effective cybersecurity also has to be holis- newswires the companies had transferred thing new. tic, in that it has to consider the complete this data to, where the hacking occurred. cybersecurity perspective for the company. The companies had taken steps with con- We had a recent example where a company The technological security is reinforced by tractual and other protections to protect the told us that they tested their plan. The policies and training. An isolated approach transfer of data. But these cases highlighted company had everything in place, and the or partial solution will not work. Some ven- that whatever information you have, it’s got managers thought they had a good plan dors and others will say “almost one size fits to be protected at each step of the way. and they had identified the best team to all” and “if you follow these particular best respond. It turns out in testing the incident practices, you will be reasonable in your Another weak link that can occur in cyber- response plan, they didn’t have the right security.” That’s not necessarily so. security deals is ensuring that you have an phone numbers for a number of key indi- attorney-client protected investigation. We viduals. They had the right individuals, but Meaningful cybersecurity also has to be inte- just heard Jessica Perry mention privileged some of the numbers had changed since grated, which mean that the company has audits. The approach is similar for cyber the plan had been drafted. In that emer- to make sure that its policies and training investigations. The attorney-client privilege gency moment, the company may not have are in line with their technology issues and is very important in cybersecurity because been able to reach the top people that they other security measures. For example, if you when these events occur, it often will be needed to reach. The regular testing of the have strong technological security, and can many weeks, if not months, before the com- plan becomes important, as well. see that employees are emailing or sending pany can fully understand what was the data outside the company, you should also cause of that attack, what was the scope of Protecting unencrypted information seems have policies and training that back that up. the breach. Many of the hackers who com- somewhat obvious as another weak link, mit a cybercrime are very good and adept but many of the cases — particularly in the The overall objective is to establish is a cul- at wiping code or concealing their conduct protected health information or health area ture of cybersecurity. Now, we heard John through proxies or things like that, so you — time and again involve a laptop that had Yslas talk about the different layers, how may not fully comprehend who is behind it. health information that was not encrypted

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and it’s left someplace inadvertently. The access by a few will be profitable. Spear Department of Health & Human Services phishing, instead, is email tailored and (HHS) Office for Civil Rights (OCR) has targeted to a specific individual. It might said how encryption can provide an effective be based on some reconnaissance or intel- defense for information stored on laptops. ligence from social media — for example, The California Attorney General also has based on someone’s background discovered said, in the 2014 California Data Breach on Linked In — and using this background report, how this one step could have saved information to target this particular attack many companies from the cost and conse- to lull the recipient into believing that the quences of dealing with the breach incident email is legitimate and they might open that occurred. the attachment or link. In many instances, there can be malware that is attached to I’ll mention one last cybersecurity weak link, these messages which can have significant and that is spear phishing. Again, it seems security consequences. somewhat obvious, but there is a business email compromise scam that’s been going on Reminding employees and conducting over the last couple of years — resulting in training to be alert to spear phishing attacks hundreds of millions of dollars being lost. is important. Some companies have gone The cyber-scam is very targeted. It typically so far as to engage other vendors to send involves an email message to a subordinate phony spear phishing emails that have these which appears to be from someone with types of messages, and then if the links or The questions that we most frequently hear authority — either the CEO or CFO — who is attachments are opened, they’ll use it as a when we’re asked about cyber insurance is directing that certain funds be transferred, or reminder to the employee that this was a certain financial steps be taken. It’s so import- fake message; you shouldn’t have opened it. “Does my company need it; if yes, what ant that the Financial Services Information If it were real, it could have been much more is the ‘it’ that the company needs? What do Sharing and Analysis Center issued an alert significant in impacting company security. I need to be aware of when placing cover- in June, because the compromise scam is age; and does any of my existing insurance working. Again, the email message has an It’s commendable to see the attention on cover these types of risks?” For today’s pur- aura of legitimacy since it appears to be cybersecurity, but it is a reminder that it poses, I’m just going to focus on number from someone who would make this type really takes just one weak link, and how three, “What do I need to be aware of when of request, and this is something to which important it is to take a holistic, tailored, I’m placing cyber insurance?” I should be responding. Based on a recent and integrated approach to promote cyber- FBI report, there are hundreds of millions security within the organization. Now, the first one is just a theme that runs of dollars that have been lost from this spear through the other four, but it really is the phishing scheme. JACK FRIEDMAN: Thank you very most important. It’s “know what you’re buy- much. Our next speaker is Cristina Shea ing.” It sounds obvious; it sounds almost not Many of these malware or other exploits of Reed Smith. worth noting; but I can’t tell you how many that are placed on company networks times we have looked at clients’ policies, only are the result of spear phishing involving CRISTINA SHEA: Thank you. Good to find that the policy doesn’t cover their spe- an attachment an individual should not morning. I also would like to congratulate cific risk. You start thinking, and you see it have clicked on or opened up, or there’s Michelle Bank and Gap Inc. for the recog- time and again, “Why is this happening?” a link that should not have been accessed. nition that they are receiving today. I would It’s happening for a couple of reasons. Training in this area can be very important. like to thank my fellow panelists; it’s an honor to be up here with all of you. As Mark said, cyber risks and cyber vulner- JACK FRIEDMAN: Tell people what spear abilities for companies are very varied. The phishing is, for those who aren’t familiar. I’m going to spend the next few minutes risks for Visa are going to be different than talking about cyber policies and cyber insur- the cyber risks for Blue Cross. Those will be MARK KROTOSKI: Sure. Spam involves ance. As Mark said, cyber policies are just different than the cyber risks for Gap. You untargeted emails that will blast out to mil- one aspect of cybersecurity that a company need to make sure that your policies are cover- lions of emails with the hopes that a few should look at when they’re looking at their ing your specific risks. The good thing about individuals might open them, and the overall assessment of cybersecurity. that is that these are very modular policies,

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so you can pull in aspects of coverage that are company’s walls; it’s stored on servers that particular to you and your company, and take are overseas; it’s on employees’ computers out others that you don’t need. and mobile devices, and those employees are travelling all over the world; and it’s Another reason I think this is happening is stored on the cloud servers. You want to be that the policies are very technical, so you sure that you don’t have any limitations on need to read the fine print in the policies, your geographical range when it comes to because this is where the rubber is really your policy. Where your company stores its going to meet the road. You will read your data is a very key piece of the analysis that insuring agreement, and that’s going to be you need to consider. your coverage brand. But you also need to read the definitions and the endorsements Last is to understand your policy limits and and the exclusions, because those are the your policy sub-limits. In the United States, areas that will chip away at your coverage. on average, a data breach costs $6.5 million You want to make sure that your definitions per company. If you break it down further, aren’t so narrow that you are excluding risks it’s about $217 per compromised record. To that should be covered, and you want to put that into context, let’s say you’re a rela- make sure that your exclusions aren’t so tively small company that has 25,000 records. broad that you’re eviscerating the coverage breach and the claim result in the same pol- You do the math and you say, 25,000 times that you paid for. So you really need to icy period. Retroactive dates and extended $217; I need a $5 million policy. You have a know what your policy offers and what it reporting dates serve to extend the outside breach, and your 20,000 records have been has for you. and the forward edges of your policy period. compromised. Your $5 million policy will cover you. But let’s also say that due to a Next, is employee negligence covered? Now, Let’s say, for example, you buy a policy, and state statute, you’re obligated to pay a $1,000 most of these policies do a very good job of three months into it, you realize that you penalty to every person whose records were covering hacking and criminal or malicious have a breach. You investigate the breach and hacked; those are your damages. That’s a $25 attacks, and companies are getting very you realize that the actual breach happened million loss that you’re looking at all of a good at protecting themselves from these six months before you bought the policy. sudden, so your $5 million policy isn’t going types of external attacks. Where companies If you haven’t negotiated retroactive dates, to do you any good. You need to really con- are less adept lately is protecting themselves chances are that loss won’t be covered. We sider whether your policy has fully covered from employee negligence. Fifty-three per- know that on average, from the time that a you for all of your risks. cent of cyber breaches are caused by human system has been penetrated until that breach error. It’s somebody leaving a laptop in an is discovered: 228 days. That’s eight months With respect to sub-limits: sub-limits are an airport that’s not password-protected; it’s that somebody has been in your system until insurance company’s way of limiting its own losing a thumb drive that’s not encrypted; you figure it out. Ideally, you want to have exposure in an insurance policy. Sub-limits it’s an employee opening an email that your policy covered at least by eight months are a lower limit, a limit that’s lower than has malware on it that makes its way on the front end and the back end. the overall limits of your policy. Typically in into your systems. cyber policies, they are going to give you a Personally, I like to negotiate for 12 months, lower limit for what really are the most expen- You don’t want to have an exclusion in your because it gives you a little buffer time, but sive parts of a data breach. You will have policy that says — and I’ve seen these exclu- you do want to have retroactive and extended sub-limits for crisis management expenses, sions — “We do not cover loss caused by reporting dates on your policy. This is largely for breach notification costs, regulatory inves- employees.” That is absolutely an exclusion to cover this eight-month period. tigations, and regulatory fines. Those are the that you can’t have. really expensive parts of a data breach. You Next to consider is the geographical limita- need to make sure that even though your Next are retroactive and extended reporting tions to coverage. Most of these policies have sub-limits are going to be there in a policy, dates. Typically, a cyber policy is written on limitations on how far their coverage will that they are high enough to cover whatever a claims-made basis, and that means that the reach, and typically it’s within the United your exposures as a company might be. I can discovery of the loss and the resulting claim States or within a certain geographical dis- tell you that you will always have some limits, have to occur within the policy period. There tance of the company’s offices. We know and they’re always going to be inadequate, so are some policies that require that the actual that most data now is not stored within the you need to negotiate for higher sub-limits.

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So, there are trends within the companies issue. In Sony Pictures, it was not credit and trends within the legal departments and card data — it was motion pictures and intel- trends within the boardrooms, all just essen- lectual property, it was personal emails, it tially bringing more focus and heightened was other company information that they awareness and a higher level of expertise. did not want to be shared. If you take the different types of data, you might be able to The last thing I would say is it’s become focus on what is the harm in a particular more and more common for third-party breach. A different loss would result from advisors to step into the boardroom and cyber espionage to steal trade secrets. But give expertise in the area of data security, right now, the courts are focusing on what because it is an area where a number of is the harm from the breach, and then directors don’t feel that they have the full what are any damages that can be compen- expertise that might be needed to ensure that sated. In many instances, the companies they are fulfilling their fiduciary duties and can act quickly to mitigate the harm, and their obligations to ensure that the company you’ll see in the SEC disclosures when they has an effective compliance program. It’s a report that there has been a breach, that complicated area, and requires new knowl- they’ll say things like, “We have this data edge and constantly changing knowledge. breach under investigation. At this point, we are not aware of any of the data being JACK FRIEDMAN: Examples of the larg- used by anyone.” In that instance, it may be That’s it for these five. This is an artificial est publicized cases of hacking are Sony, hard for someone to be show harm for data list of five, in the sense that there are 10 or Target, Home Depot, banks, health care that was not exfiltrated or used. 20 other things that we could talk about companies, and so forth. How big have the that are also critical to know, but for pur- damages been for these cases where compa- JACK FRIEDMAN: To what extent do, poses of today, these are the top five that nies got mega-hacked? for example, retailers who have a data came to mind. Thank you. breach, find that they lose revenue because MARK KROTOSKI: Based on some people are afraid to give their credit cards? JACK FRIEDMAN: Thank you very recent published reports with regard to much. I’m going to open this up to the Target, the loss was around a couple hun- MARK KROTOSKI: The reputational panel generally and then take some ques- dred million dollars. Their cyber insurance harm can be one of the most significant tions from the audience with interaction coverage offset some of the costs. The cyber costs resulting from any data breach. among the panelists. On the cyber area, insurance does not cover everything, but it Cristina pointed out that data breach costs Michelle, what are examples of what law covered some of the losses. are about $6.5 million or so, in general, departments and their advisors are doing for a company. That is just a rough aver- to keep up with all the technological change In assessing loss, the key issue is demon- age. But there are other significant costs affecting business operations? strating damages. For the individual whose that may result, like the reputational harm data was breached, can they show that they that you’re alluding to, and that’s one of the MICHELLE BANKS: There are a couple were harmed? A number of cases actually most important things that a company must of trends. There’s a trend towards hiring here in the Northern District of California, act promptly to mitigate. For example, I’ve attorneys who have privacy and data secu- have been wrestling with that issue. Then talked to call centers that are in the busi- rity as an expertise. There’s a trend towards on November 2, 2015, the U.S. Supreme ness of trying to staff and assist a company ensuring that you have better encryption Court in the Spokeo, Inc. vs. Robins case is where there’s been a data breach. They’ve and other security practices. There is a going to be looking at standing with regard told me that companies are asking them, trend towards internal auditors getting to what sort of harm must be shown in “Can you staff up and respond to a data very involved in this area, as the panelists order to demonstrate damages. breach within 24 hours?” For example, if mentioned, doing privileged audits and, if one of their customers learns that there’s necessary, investigations. There’s a trend for Now, what’s interesting in some of the cases a breach through either the news or on a boards spending more time understanding you mentioned, if you look at the data in blog, they’re immediately going to feel vul- this area, and in some companies, even each one of them, they’re all a little bit dif- nerable, and they’re going to want to ask recruiting board members who have more ferent in terms of determining damages. someone, “Is my data at jeopardy?” The technology or security expertise. In some instances, credit card data was at ability for a company to staff a call center

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to respond to those types of questions is the new employee sign an agreement that important in terms of maintaining cus- represents that they’re not presently taking tomer and business relationships. In many anything with them from the old job. Sure, instances, a company will post “frequently they have a skill set that has probably blos- asked questions” about the data breach inci- somed wherever they’ve come from — but dent, so that their customers have a place to they’re not taking a piece of information go for confident and reliable information. that’s protected in some way to the new job. That is relatively the pathway that gets taken. JACK FRIEDMAN: The New York Times did an article a few months ago to show JACK FRIEDMAN: How much can you how impossible it is for companies to totally have in your memory that you’re allowed to defend themselves and protect their data. take with you? They picked one example — right on the front page of the New York Times — and said JOHN YSLAS: Jack, I’m going to sound that hackers had reached the main com- like a lawyer here for a second. “It depends.” puter of an oil company through a Chinese Let me try to distill it in something that I restaurant down the street which employees think is straightforward. called for deliveries. Sure, there’s going to be know-how. Let I want to ask the panel about the relation- me back up for a second. In terms of cus- ship between outside law firm and in-house a small company, that company will be hit tomers and customer lists, there actually counsel. How have those relationships and with a SLAPP [strategic lawsuit against pub- is an argument that the identity of cus- involvement with boards changed over the lic participation] suit, to prevent them from tomers, themselves, can be trade secrets. I time you’ve been an attorney? Maybe start leaving, in a non-compete. I was wondering will tell you something frankly, even from with Michelle. if you have any strategies or ideas for how a big company perspective — that’s a hard to encourage people to do this in an ethical thing to prove, the identity of a customer. MICHELLE BANKS: There is more and legal way. It’s really the issue of when you’re using a openness in boardrooms to bringing in carefully crafted customer list that has been external advisors on technical subjects such JOHN YSLAS: If I understand the ques- protected internally — maybe password pro- as data security. There is a push for diver- tion correctly, it’s about movement in the tected and only a certain amount of people sity in boardrooms that’s relatively new and California workforce. I’ll start with a basic know it — the issue of know-how, that’s relatively pervasive. You’re seeing more diver- principle. Obviously, I’m in these situations a very difficult fact-specific area. Again, it sified boards at larger companies, at least. typically defending the bigger companies. really comes down to what you know and I want to point out that non-competition how you’re using it, specifically, and not tak- The other thing is, there is now an expec- agreements in California are generally unen- ing the specific technology. We’re going to tation of good governance that has become forceable. The key is when an employee learn and grow as people at companies, and very foundational. It used to be notable if moves — and this is really from my per- so it’s difficult to say somebody has devel- you were more transparent or had positive spective, too — is that what they can’t do is oped know-how unless it’s in a very specific governance practices; today, that’s just a misappropriate trade secrets. You can’t pre- area that is protected. There used to be, in foundational expectation. vent an employee from leaving. There’s got California, something called the “inevitable to be a freedom of movement in California. disclosure doctrine” (it’s been rejected in JACK FRIEDMAN: I’d like to open it up But you have to be careful, as an employee California), which is to say, you’re going to to questions from the audience. Yes, sir? — and actually, as a new employer — that go to the competitor and it’s just inevitable you don’t have somebody taking something that you’re going to disclose it. [AUDIENCE MEMBER]: I’m Dave that is a trade secret (and I could give 20 Burleigh, Cloud CFO for Startups. One of minutes on what that is); customer lists or What I’m really saying, Jack, is that it the problems we have in the startup industry something that’s arguably a trade secret; depends, but it’s the general know-how of is startups trying to hire each other’s employ- or some piece of technology or innova- doing something is something that’s difficult ees. The big problem that we’re having is a tion that’s protected. The employee has to argue, and it can be successfully argued lot of employees are intimidated, that if they to be careful of that, and frankly, the new that the company is protected. It really comes work for a large company and want to go to employer, as a best practice, has to have down to something that is more identifiable,

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is protected in a very specific way, and you’re Very significantly, we pay equally for the same job, not using that specific protected piece of information in your new employment. men and women, whether you are in the U.S., Tokyo, Shanghai, London — wherever you are in the world, JACK FRIEDMAN: Any questions for Michelle? within our company. – Michelle Banks

[AUDIENCE MEMBER:] In the 90 countries that you operate, is there a JACK FRIEDMAN: Michelle, what is the also a trend, now, in Europe, and the U.K. difference between the companies in the Bangladesh Initiative that you’re involved in? has adopted the Modern Slavery Act. There public eye regarding diversity? Is such a is going to be more and more pressure difference impacting how you operate in your MICHELLE BANKS: In addition to on corporations to have knowledge about general strategy? serving as Global General Counsel of Gap their supply chains, and to be working dili- Inc. and the Board Chair for Minority gently through having codes of conduct and MICHELLE BANKS: Yes. That’s a very Corporate Counsel Association, I’m cur- through engaging in transparent operations good question. We have looked at, but have rently leading a non-profit organization to what’s actually happening, whether it’s in never perfected, a global standard for diver- that Gap Inc. formed two and a half years the U.S. — and there are issues in the U.S., sity. I think it’s impossible. So we have to ago. It’s called the Alliance for Bangladesh as well — or in another country. There’s have different focuses in different countries. Worker Safety. It was formed in the after- definitely both a reputational trend and a For example, in the United States, we have math of the Rana Plaza and various fire legal trend towards holding corporations a very active employee resource group that safety challenges that resulted in loss of life more and more responsible for the activi- is in support of LGBT employees. To my in Bangladesh. Bangladesh is an import- ties in their supply chains, from the safety knowledge, that doesn’t operate across all of ant apparel retail country for sourcing, for perspective, from the social perspective. our countries; whereas, women’s empower- Gap Inc. and for many other global retail- ment is something that’s pretty active across ers. We’re up to 27 companies have joined JACK FRIEDMAN: Other questions? all of our countries. Then within the United together and created an organization that States, of course, there is a specific focus on is investing in improving the safety of the [AUDIENCE MEMBER]: Robert White representation of different racial and ethnic garment factories in Bangladesh. It’s a chal- with California Minority Counsel Program. minority groups that wouldn’t at all be appro- lenge. It’s a very developing country, with Michelle, you talked about trying to help priate or applicable in various countries. all of the challenges that you would expect your law firms with accountability for diver- to find, from labor issues to social issues sity in their own practices. Can you tell us a We have a desire to be diverse and inclu- to physical issues. It’s an important project little bit more about what things you do to sive globally, but the definition of what that we have invested a lot of resources into, encourage or support them in that? diversity looks like would be different in but it’s a great example of collaboration each area. We don’t have that many things among not only Americans, but Canadian MICHELLE BANKS: I’ve been want- that we would try to say, “this is the defini- and other global retailers, as well, to try to ing to meet you. Nice to meet you! tion of ‘diversity’ across.” The only thing ensure that we are working to improve our Congratulations on your new job! I can think of off the top of my head is supply chains, and that we have knowledge women’s representation and women’s of what’s happening in the factories no mat- Emily’s sitting right here — you should equality and education. ter how far away they are. meet her. I’m referring to Emily Sullivan, who’s an Associate General Counsel in I also think that we at Gap Inc. have tried JACK FRIEDMAN: Is there an increasing my department, who leads a very import- to be very inclusive with our definition of trend for American companies to have sup- ant committee within the legal team, which diversity. It’s on our website, and if you read pliers with humane employment policies? is the Law Firm Diversity Committee. We it, it basically says, “We embrace diversity have a group of approximately six people with a very kitchen sink approach.” It’s all MICHELLE BANKS: Yes, of course. who put a lot of energy into thinking about forms of diversity. For a global corporation, There is a legal trend towards holding the our strategy to improve the external diversity that’s important, because what diversity companies responsible for their supply of our law firms. They do lots of different looks like needs to be different in different chains. It’s a trend not just in the U.S. — things, but one of the most important workplaces and in different countries, to and of course, California is leading the way things that they do is they engage with your point. on supply chain transparency — but there’s those firms. We do a survey every year; it

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is very robust and comprehensive. We ask the most impact, and where is your data to to interview in a room. Companies like the a lot of hard questions — some data-driven, support it?” So everyone’s now on notice! Gap and other lawyers to meet with them, about the demographics of the firm, but [LAUGHTER] so that we’re facilitating a dialogue between a lot more qualitative, about what are you those companies. Those are the kinds of really doing to change your firm and to JACK FRIEDMAN: What are exam- things that are important. change the profession and to increase the ples of other initiatives on diversity by diversity and inclusion. corporate counsel? It is also very important to set goals. I’m very proud that our law firm has set a goal Some of the enhancements that we’ve made JOHN YSLAS: In particular, I’m going to of 30% women partners by the year 2020. over the last few years is we just keep asking speak as a diverse partner in a global law It’s important you set those goals — and on harder and harder questions, so it’s more firm, and also as a proud board of directors’ leadership positions in our firm — because and more difficult to look good. We’ve also member of the California Minority you need to see change. focused on things that really matter, like Counsel Program. I have a lot of visibility the diversity on our account, not just the to these issues, and certainly seeing from Another major thing that is sometimes over- diversity in the law firm. The diversity at the the companies that really mean it, in terms looked is the issue of retention. That’s a big senior-most level — do you have a woman of what they’re doing or they’re asking one. If you really want to be a diverse law on your compensation committee? Is she for. What I’m seeing is a trend — and I firm, you need to retain a diversity of peo- sitting there in a room of 10 people and think you started to touch upon it, Jack ple. That takes the form of affinity groups, she’s the only diverse person in the room? — of asking for actual data, and analyzing of support groups, of mentorship, an atmo- actual data. Certainly what the workforce sphere of inclusion, and where you’re not Then we’ve tried to really up our game and looks like is the first question. The second ignoring somebody that might feel excluded; ask more and more challenging questions. question is, who is actually working on that you’re proactive in your approach inter- What we do at the end is we give a report our matters? We had people at the pitch nally. That applies to all companies. back to the firms; I actually write a letter that were a diverse team, but we want to with the help of Emily and her team, where actually analyze the hours to make sure that MICHELLE BANKS: One other thing I say to the firms, “This is what we’re we’re seeing the actual work conducted by a I’ll mention. When he was at Wal-Mart, seeing. Firms are doing better on a, b, c, diverse pool of candidates. Joseph West, the current CEO of MCCA, but I am very troubled by x, y, z.” This year, started an initiative where Wal-Mart very since a lot of my firms are in the audience I’m also seeing a real movement to find publicly said that it would select its rela- — you’re giving me a platform to preview a connection between diverse lawyers and tionship partner for its firms. Many of us that letter — we intend to say that we are companies that are seeking to increase have law firms that we have formal relation- tired of seeing written glowing descriptions their pool of potential candidates to do ships with. Before Wal-Mart very publicly about all the good diversity initiatives that that kind of work. An example of that is started saying that they were not just going you have in your firm but then the data the board of directors that I sit on, the to be part of the conversation and they does not support them. This year, we are California Minority Counsel Program, were not just going to insist on succession going to ask for our qualitative question, something called Corporate Connections, planning, but they were actually going to “What is the one program that has had where we bring people together specifically designate the relationship partner. We all

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know that that tends to lead to economic Across our brands and businesses, Gap Inc. maintains a results for that partner. They were going to use diversity as a filter in selecting those commitment to integrity and inclusion, and we have zero relationship partners, none of us did it. tolerance for discrimination of any kind. We firmly believe That has become more mainstream now, that corporations should contribute to the communities in as a result of the world’s largest company doing it. They really have been trendsetters, which they do business. – Michelle Banks and I applaud them for the work that they have done. and objectives, as opposed to just collect- meet the people, and be prepared to go out ing the data — consequences such as being so that they can be ready to be engaged. [AUDIENCE MEMBER:] I have a ques- terminated — would that have an effect That’s actually something you need to see a tion. You mentioned that you want to look on increasing the percentages in terms of company doing. at who’s doing what work. Michelle, do you outside counsel as it relates to underrepre- look at the litigation team and see who’s sented minorities and in areas where we’re It brings me to my question for Michelle. actually in court, fighting the fights, and seeing a significant decline in this country? You’re the only GC on the panel. Regarding look for it from the viewpoint of diversity? the use of women in minority-owned firms JOHN YSLAS: The answer is unequivo- MICHELLE BANKS: Yes, we do, which as alternative to big firms, how do you cally “yes.” Diversity and equality are moral see that impacting the large law firms and is why there’s a lot of women sitting up imperatives, period. The business reason here! Yes, we do. I can’t say I personally diversity as people move out to form these for it depends on companies like the Gap high-quality firms? do it, but my law firm’s diversity team, as that hold the key, in my mind, to effectu- well as my General Counsel and Deputy ating that kind of change. If they demand General Counsel and Associate General MICHELLE BANKS: It puts pressure on results, people are going to react to those law firms to become more diverse, because Counsel, who work on my team, are all kinds of things. responsible for ensuring that our law firm most very significant-sized companies, and diversity applies in all aspects of the teams all companies that do business related to the MICHELLE BANKS: I should say that government are adopting programs, whether that work for us, including at trial. we have both fired firms for lack of diversity it’s informally or formally, to engage with on our account, and given firms signifi- minority, women and other forms of diverse Frankly, that’s just good business. When cantly more business because of their ability firms. It creates an incentive for majority you have as many employment cases as I to provide more diversity on our account. firms to become more diverse. You now see, have, you want every form of diversity in We try to be public about that, so I’m tak- unfortunately, majority firms fighting over your trial lawyer. ing this opportunity to say that out loud. minority partners, because there’s not enough I’m leading round tables for an initiative for [AUDIENCE MEMBER:] That includes the ABA Commission on Women, called of them in the pool and many of them are color? “The Power of the Purse.” If any of you are going off and forming alternative firms. interested, there are materials online, on the MICHELLE BANKS: Yes, absolutely. ABA website, about how General Counsel It’s a nice problem to have as a General have an obligation to provide both a carrot Counsel, because a lot of times, those firms JACK FRIEDMAN: We will take two last and a stick to their law firms — if they truly are doing great work at more reasonable cost. questions. Go ahead, ma’am. want to achieve greater inclusion, they need I applaud the organizations out there that to back it up with their business, absolutely. are promoting people to support both. It’s [AUDIENCE MEMBER:] I’ve heard really important to support both; I have no that the Bar Association in San Francisco [AUDIENCE MEMBER:] Wal-Mart’s new intention of pulling all my work one way or is going to come out with new timetables program, Wal-Mart Ready, is where they will another. It takes a village to do the optimal and data and specifics, and from a little be selecting women and minority-owned legal work, and so we use minority-owned inside source, we’re going to see a signif- firms that can do their work and bringing firms, we use majority firms, and we push icant decline, particularly in the area of them back to Bentonville, Arkansas to spend our majority firms to be more inclusive. I underrepresented minorities. I wanted to time to learn Wal-Mart’s business, to spend really do applaud the large companies that ask, do you think if firms actually experi- time with the lawyers who hire, other case are engaged in, for example, a new program ence the consequences of not meeting goals managers who hire in those areas, to actually called “Engaged Excellence” that is promoting

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diversity on trial teams. I applaud organi- the story that for years, he was proud of JACK FRIEDMAN: I want to thank all of zations that are trying to support and drive the diversity of their outside law firms — our Distinguished Panelists and our Guest more economic power into minority firms. the smaller firms, particularly. A consulting of Honor for sharing their wisdom. We firm came with statistics, and showed that thank the audience, because the Roundtable The bottom line is that, like all things, just they had a poor record. He said he regretted is all about the audience. Thank you very talking about diversity and inclusion is not not knowing this; it is important to really much for coming. enough; we need to back it up with busi- know what’s going on in a company. ness. We can’t just be doing this because it’s morally the right thing to do; you have to I have one last question for Michelle. In the be doing it because it’s the right economic five minutes a month that you have free, thing to do. what do you like to do?

JACK FRIEDMAN: I want to thank the MICHELLE BANKS: Since I took on panel. We’ve had 800 events over 24 years. Bangladesh, I don’t even have five minutes. The General Counsel of a major bank told But I like to relax with a glass of wine.

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Robyn Crowther has a diverse civil litiga- company against an international con- tion practice that includes matters in state glomerate after a three-week trial. and federal courts, institutional arbitration • In two separate FINRA arbitrations, tribunals, and other alternative dispute res- obtained awards of full rescissions of olution forums. Her practice covers a wide transactions plus over 98% of attorneys’ variety of substantive areas of the law, includ- fees and costs requested against E*Trade ing entertainment and intellectual property Securities, LLC. disputes, legal malpractice claims, real estate and employment disputes, and many others. Clerkship • Law clerk to the Honorable Gary L. Taylor, Robyn Crowther Ms. Crowther has represented individuals, United States District Court, Central multinational corporations, municipalities, District of California, 1996–1997 Partner, Caldwell Leslie and small businesses, regularly obtaining & Proctor, PC extraordinary results for her clients. She Professional Achievements has substantial experience in provisional • Author, “Prosecution of Trade Secret and preliminary remedies, pleading attacks, Theft on the Rise,” No. 10 The Recorder, and motions for summary adjudication and May 25, 2011 summary judgment. • Member, California State Bar; U.S. District Before joining the team at Caldwell Leslie & Court, Central District of California; U.S. Proctor, Ms. Crowther was an associate in Court of Appeals, Ninth Circuit the litigation department at Gibson, Dunn • Member, American Bar Association; & Crutcher. Prior to that, she clerked for the Los Angeles County Bar Association; Honorable Gary L. Taylor on the U.S. District • Member, Women’s Law Association of Court for the Central District of California. Los Angeles (WLALA); Joint Task Force on the Retention of Women in the Law; Representative Cases Board of Governors, 2011–2015; Co-Chair, • Defeated summary judgment brought by Litigation Committee, 2011–2015. the Associated Press in litigation relating to Shepard Fairey’s 2008 campaign poster • Member, Association of Business Trial of Barack Obama on behalf of Fairey’s Lawyers (ABTL); Board of Governors, exclusive licensee, Obey Clothing, lead- 2012–2016; Co-Chair, ABTL’s Court’s ing to successful resolution of dispute. Committee 2014–2015; Co-Chair, ABTL Lunch Program, 2015–2016 • Obtained eight-digit arbitration award representing 100% of damages, interest, • Super Lawyer, Law & Politics and Los fees and costs sought for multinational Angeles Magazine, 2009, 2010

Caldwell Leslie & Proctor, PC Founded in 1988 as an intelligent alter- litigation, a testament to the reputations of native to large law firms, Caldwell Leslie’s our attorneys, who are primarily recruited record of success at trial, alternative dispute from prestigious federal clerkships. resolution proceedings, and on appeal has Caldwell Leslie & Proctor, PC is dedicated attracted a loyal roster of clients, including We commit the superior talent, determi- to providing our clients with strategic, cre- Fortune 500 corporations, closely held nation and results-oriented mindset that ative and cost-effective representation in businesses, major studios and networks, distinguish Caldwell Leslie from other firms complex, high-stakes litigation. According new media and emerging technology com- to the authoritative Chambers USA, panies, cities and counties, state and local to each case we take on, because when the Caldwell Leslie is a “go-to firm” consisting agencies, foreign companies, professionals stakes are high, nothing less will do. We of “incredibly smart attorneys who tailor and community groups. Indeed, prominent believe that a small team of the right lawyers their approach to the matters at hand, and law firms routinely rely on Caldwell Leslie with the right strategy offers value that can- are just very good at what they do.” for excellent representation in high-stakes not be matched by large law firms.

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During nearly 20 years as a federal prose- As chief and deputy chief of the Criminal cutor, Mark handled a variety of complex Division in the U.S. Attorney’s Office for and novel investigations and high-profile the Northern District of California, he cases. As the assistant chief of the National supervised cases involving white collar Criminal Enforcement Section in the DOJ’s crime, securities fraud, computer intrusion, Antitrust Division, he oversaw international intellectual property, organized crime, and criminal antitrust cartel investigations and antiterrorism. While serving as a Special successfully led trial teams in prosecuting Assistant Attorney General in California, antitrust and obstruction of justice cases Mark was counsel of record on 10 amicus involving corporations and executives. He briefs filed in the U.S. Supreme Court on also provided guidance on electronic evi- criminal justice matters. Mark Krotoski dence and forensic issues. Partner, Morgan Lewis He is a former law clerk to Judge Procter R. & Bockius LLP Mark served as the national coordinator Hug Jr. of the U.S. Court of Appeals for for the Computer Hacking and Intellectual the Ninth Circuit and Chief Judge William Property (CHIP) Program in the DOJ’s A. Ingram of the U.S. District Court for the Criminal Division, which involved approx- Northern District of California. imately 250 federal prosecutors specially trained to prosecute cybercrime and intel- Mark frequently speaks at national and lectual property enforcement cases. He international conferences on topics successfully prosecuted and investigated involving criminal antitrust enforcement, virtually every type of computer intru- cybersecurity, cybercrime, and trade secret sion, cybercrime, and criminal intellectual issues, as well as the use of electronic evi- property violation. dence in investigations and at trial.

Morgan Lewis & Bockius LLP Corporate, Finance & Investment Labor, Employment & Benefits Management We help employers around the world nav- We counsel a diverse clientele of Fortune igate the constantly changing landscape At Morgan Lewis, we partner with clients to 500 companies and public and pri- of global, U.S., state, and local laws and understand their needs and craft powerful vately held businesses of all sizes. We regulations governing the workplace. We solutions for them. Our team encompasses know and understand our clients’ indus- apply a solutions-oriented approach to give more than 2,000 legal professionals, tries and business enterprise structures. clients a competitive edge as we work with including lawyers, patent agents, employee Handling complex transactions well requires them to address the full range of workforce benefits advisers, regulatory scientists, and a multidisciplinary approach, and our cor- matters that affect their bottom line. other specialists, working together across porate, finance, and investment clients are 28 offices in North America, Europe, Asia, well served by the firm’s breadth and depth Litigation, Regulation & Investigations and the Middle East. across a wide variety of practice areas. In today’s global economy, multidimen- sional corporate challenges often play out We offer truly comprehensive services for Intellectual Property on the world stage. Clients turn to us when clients as they work across the globe. If a We draw on the diverse strengths of patent, client has a question, we’ll find the person trademark, and copyright litigators; transac- vital interests are at stake, looking to our in our network with the answer. If there’s a tional lawyers; and other professionals. trial capabilities, legal and business sophis- shift in the legal landscape, we’re on top of tication, broad scope of services, and ability it, and our clients will be too. Our full range of services include litigation, to find solutions.With experience in most patent preparation and prosecution, trade- jurisdictions worldwide and a rare combi- Whether a client has been with us for days mark and copyright registration, counseling nation of trial capacity and practical insight, or decades, whether it’s today’s industry and opinions, transactions, and due dili- we frequently serve as trial, strategic, per- leader or tomorrow’s game-changer, we’re gence. Clients range from Fortune Global mitting, and coordinating counsel in large, always responsive and always on. 500 companies to start-ups. complex matters.

Fall 2015 25 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

John Yslas represents companies in a wide Areas of concentration variety of actions, and concentrates on • Class actions wage-and-hour and consumer class actions • Dispute resolution and litigation (both state and federal law), while also rou- tinely handling single plaintiff employment • Employee benefits and commercial litigation cases. • Employment and labor

He has defeated class certification on numer- Professional activities ous occasions on a variety of issues. He John is active in several organizations. He is an has also routinely defended and counseled active member of the Mexican-American Bar companies on such issues as wage-and- Association. He served on the 2008 Hispanic John Yslas hour compliance, unfair business practices, National Bar Association Convention Partner, Norton Rose Fulbright LLP misappropriation of trade secrets, breach Planning Committee. He also served on the of contract, commercial contracts disputes Los Angeles County Bar Association Lawyer and practices, discrimination, retaliation, Referral Service Committee. John currently harassment, wrongful termination, breach serves on the board of directors of the Mexican of fiduciary duty, and unlawful interference American Bar Foundation and on the board with prospective business opportunity. of directors for the California Minority Counsel Program (Executive Committee). John’s litigation practice encompasses all aspects of litigation, including extensive pre- Publications trial, jury trial, arbitration, and appellate • “Wage and Hour Update,” Labor & experience. He has served as trial attorney in Employment Summit (October 2, 2013) successfully defending multi-million dollar • “Headline News: Wal-Mart v. Dukes commercial and unfair business claims in – Impact on Class Action Litigation,” trials of up to five weeks and involving up to Employee Benefits Broadcast (July 26, 2011) 14 plaintiffs. He also successfully challenged a wage and hour rule promulgated by the • “Privacy Issues in the Employment California Department of Labor Standards Environment,” Labor & Employment and Enforcement (DLSE) in a declaratory Inner Workings Web Conference Series relief action against the DLSE; the trial (December 3, 2009) court granted Mr. Yslas’ summary judgment • “Overview of Trade Secret Law,” Energy motion, and the Court of Appeals affirmed Company Presentation (March 2, 2009) the decision in a published decision.

Norton Rose Fulbright LLP Los Angeles, Minneapolis, New York, the highest possible standard of legal ser- Pittsburgh-Southpointe, San Antonio, vice in each of our offices and to maintain St. Louis and Washington, D.C. that level of quality at every point of contact. Norton Rose Fulbright is a global legal practice. We provide the world’s preemi- Recognized for our industry focus, we are Norton Rose Fulbright U.S. LLP, Norton strong across all the key industry sectors: Rose Fulbright LLP, Norton Rose Fulbright nent corporations and financial institutions financial institutions; energy; infrastructure, Australia, Norton Rose Fulbright Canada with a full business law service. We have mining and commodities; transport; tech- LLP and Norton Rose Fulbright South more than 3,800 lawyers and other legal nology and innovation; and life sciences Africa Inc. are separate legal entities and staff based in over 50 cities across Europe, and healthcare. all of them are members of Norton Rose the United States, Canada, Latin America, Fulbright Verein, a Swiss verein. Norton Asia, Australia, Africa, the Middle East Wherever we are, we operate in accordance Rose Fulbright Verein helps coordinate the and Central Asia. In the U.S., we have 11 with our global business principles of qual- activities of the members but does not itself offices in Austin, Dallas, Denver, Houston, ity, unity and integrity. We aim to provide provide legal services to clients.

Fall 2015 26 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

Jessica R. Perry, an employment partner passed over for promotion because of her and Deputy Leader of the firm’s Litigation gender and complaints about discrimination. Business Unit, represents clients in their most significant class, collective, representa- Jessica also leads a number of significant tive, and multi-plaintiff actions under state wage-and-hour class action matters, focus- and federal laws. She focuses her practice ing on overtime, minimum wage, vacation on wage-and-hour and discrimination, and personal days, meal and rest break harassment and retaliation claims for indus- penalties, reporting time wages, expense try leaders within the technology, retail, and reimbursements, waiting-time penalties, financial services sectors. Private Attorney General Act penalties and work uniform violations. In addition, she Jessica Perry Jessica’s discrimination, harassment and also has experience advising companies in Partner, Orrick, Herrington retaliation practice focuses largely on the emerging sharing and gig economy on & Sutcliffe LLP representing employers facing claims of dis- crimination and harassment on the basis of strategic business decisions including the gender, race, disability and age, and other classification of those providing services. protected categories. Most recently, Jessica obtained a complete defense verdict in Pao Jessica has also successfully represented cli- v. Kleiner Perkins, the high-stakes gender dis- ents involved in investigations and audits by crimination and retaliation case that garnered the Department of Labor and the California intense national media scrutiny. Following Division of Labor Standards Enforcement, six weeks of trial and three days of deliber- and assists in the development of compen- ations, a state court jury in San Francisco sation policies and measures designed to rejected all of plaintiff’s claims that she was reduce potential exposure.

Orrick, Herrington work in the technology sector, we act for Orrick also is known for innovation in & Sutcliffe LLP many of the world’s top public companies the delivery of sophisticated legal services. as well as more than 1,200 startups. We We have revolutionized the law firm talent also are recognized for working on the most model to ensure we assign the right talent innovative deals in the renewable energy and to the right task. Our Global Operations Orrick is a leading global law firm with a PPP markets. Our municipal bond prac- Center in Wheeling, West Virginia, is the particular focus on serving companies in tice consistently ranks No. 1 in the United longest standing and most successful legal the technology, energy and financial sectors. States, and we offer top-tier structured and and administrative insourcing center in leveraged finance practices. Financial Times our profession. We have pioneered the use We are recognized worldwide for delivering commended our intellectual property teams of innovative pricing models. Selected by the highest-quality, commercially oriented for securing two of the most innovative pat- Financial Times among the most innovative legal advice and for our culture of innova- ent litigation wins of 2012. Our litigation U.S. law firms in 2011 and again in 2012, tion and collaboration. teams represent a third of the Fortune 100 Orrick was cited for leadership in both legal in resolving high-stakes matters involving a advice and client service. Founded in San Francisco a century and a broad range of disciplines before trial and half ago, Orrick today is named by Law360 appellate courts and forums worldwide. In Collaboration — one of the firm’s core val- as one of the “Global 20” leading firms. 2012, The American Lawyer named Orrick to ues — defines our relationships with our Our platform offers clients a distinctive its list of leading litigation departments for clients, our people, and our communities. combination of local insight and global the second consecutive time and selected an This is evident in the way our lawyers part- reach across 24 offices. Orrick partner as Litigator of the Year. All ner with our clients’ in-house teams, our together, Orrick is recognized by Chambers approach to lawyer development, our efforts Orrick practices in five core areas: Corporate, Global for strengths across 43 transactional, to enhance the diversity of our profession, Energy & Infrastructure, Finance, Intellectual litigation and regulatory practice areas in the and our commitment to pro bono and com- Property, and Litigation. Known for our United States, Asia, and Europe. munity responsibility.

Fall 2015 27 WORLD RECOGNITION of DISTINGUISHED GENERAL COUNSEL

Cristina is a litigation partner in Reed Most recently, Cristina is part of a legal Smith’s San Francisco office and is a team representing a Fortune 500 financial member of the Firm’s Insurance Recovery institution in multiple cases throughout the Group. Cristina’s practice focuses primar- country involving mortgage insurance, sub- ily on insurance coverage matters where prime mortgage claims and mortgage fraud she represents corporate policyholders in claims. In that representation, Cristina was disputes with their insurance carriers. In trial counsel for matters venued in federal addition to handling complex litigation, court and multiple arbitrations. Cristina also counsels clients on their exist- ing insurance programs, policy renewals, More broadly, Cristina has represented cli- and prospective coverage. ents in matters involving environmental and Cristina Shea remediation claims, mortgage insurance, Partner, Reed Smith LLP Cristina represents clients in industries that data and network security (cyberliability), range from telecommunications, to finan- employment practices liability, fiduciary lia- cial institutions, pension funds trustees, bility, professional liability, securities fraud, technology companies, restaurants/food man- directors and officers (“D&O”) liability, ufacturing and oil and chemical companies. and claims under comprehensive general liability (CGL) policies. Cristina has counseled multiple pension fund trustees on issues ranging from Cristina has also represented multi- fiduciary liability claims, establishing ple clients in first-party property claims, self-insurance programs, and advising on including property damage, and business alternative coverage options. interruption claims.

Cristina has counseled a host of clients Cristina is admitted to practice in California, on their cyberliability policies, including including all state and federal courts. regional banks, public pension funds, and retail stores.

Reed Smith LLP industry sectors. Reed Smith counsels 13 of high-quality service and developing long-term the world’s 15 largest commercial and sav- client relationships. Our lawyers’ approach ings banks; 25 of the world’s 35 largest oil to service begins by understanding clients’ Reed Smith represents many of the and gas companies; and the world’s three business goals, then applying the resources world’s leading companies in complex largest pharmaceutical distribution and necessary to help achieve them. litigation and other high-stakes disputes, wholesale companies. Reed Smith’s ship- cross-border and other strategic transactions, ping practice has been designated among Based on the results of a survey of large and and crucial regulatory matters. the most preeminent in the world, and Fortune 1000 in-house counsel, the BTI its advertising law practice is regarded as Consulting Group has ranked Reed Smith With lawyers from coast to coast in the among the legal industry’s finest. among the top firms for client service United States, as well as in Europe, Asia eleven years running. Reed Smith has been and the Middle East, Reed Smith is known Reed Smith has grown in large part because identified as one of the few large law firms for its experience across a broad array of of its uncommon commitment to delivering with a strategic focus on client satisfaction.

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