The following are a sample of the matters our cross-disciplinary team of distribution and franchise attorneys have handled for manufacturers, distributors, franchisors and others concerning their distribution networks and franchise and licensing systems.

Franchise, License and Dealer Agreement Development and Structuring

Enforcing Franchise and Dealership Agreements and Operating Standards

Pricing, Incentive and Promotional Programs

Multi-District, Multi-Plaintiff and Class Actions

Bankruptcy and Financially Distressed Operations

Trademarks, Trade Secrets and Non-Competition Agreements

Labor & Employment and Employee Benefits

Real Estate

Data Security and Privacy

Franchise, License and Dealer Agreement Development and Structuring

  • Distribution Agreement. Represented a major pet food manufacturer in negotiating a multi-year agreement with an international trade partner for distribution of a new line of pet food products.

  • Fiduciary Duty Claims. On behalf of auto manufacturer, obtained summary judgment in Massachusetts Superior Court (affirmed by Massachusetts Appeals Court) on claims by former individual investors and dealer operators for breach of fiduciary duty, breach of contract, securities fraud, and unfair and deceptive trade practices.

  • Ownership Restrictions. In a case of first impression, obtained summary judgment for major auto manufacturer (affirmed by First Circuit), on a dealer’s claim that automaker violated Massachusetts law prohibiting manufacturer ownership of car dealerships after demonstrating that the dealer had failed to show it had sustained any actual injury as required under the statute.

  • Joint Venture Agreement. Obtained summary judgment on behalf of auto manufacturer on $50 million claim brought by one of largest South American motor vehicle manufacturers arising from offshore production joint venture.

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Enforcing Franchise and Dealership Agreements and Operating Standards

  • Dealer and Franchisee Terminations.

    • Obtained summary judgment on behalf of auto manufacturer in Federal Court in Connecticut that it had good cause to terminate dealer for failure to maintain floor plan financing and to conduct customary operations.

    • Represented national convenience store franchisor in a suit in Massachusetts Superior Court against a delinquent franchisee in matter which involved complicated issues under Massachusetts Liquor Control Act. Obtained preliminary injunction requiring the franchisee to vacate its store and turn over possession of the store and its inventory.
    • Defeated dealer’s motion for preliminary injunction in Federal Court in Maine seeking to block termination by major farm equipment manufacturer.

    • Obtained jury verdict in Federal Court in Boston on behalf of major commercial equipment supplier in action brought by terminated commercial equipment dealer; verdict upheld on appeal.

    • Successfully represented home appliance distributor in a suit brought by terminated dealer in Federal District Court in Connecticut; defeated motion for preliminary injunction following evidentiary hearing; obtained summary judgment for our client on all counts.

    • Successfully represented QSR mall restaurant franchisor in New Hampshire Superior Court in termination dispute with franchisee concerning franchise agreement obligations.

    • Successfully defended an international commercial truck OEM and defeated the dealer’s action in Federal District Court in Rhode Island to enjoin termination of the dealer agreement.

    • Successfully represented heavy duty truck franchisor in suit in Delaware Superior Court challenging post-termination compensation under Delaware law.

    • Successfully defended tire franchisor in multi-plaintiff lawsuit in California alleging breaches of franchise agreements, restraint of trade violations, interference with contractual rights, fraud in the inducement, negligent misrepresentation, violations of California's Cartwright Act, violations of unfair competition law, and other misconduct.

    • Obtained summary judgment for major OEM in Federal District Court for Eastern District of New York on all claims by dealer in wrongful termination case.

  • Defending Claims by Former Shareholders / Owners.

    • Successfully enforced release provided by Chapter 7 Trustee to obtain dismissal on behalf of major auto manufacturer of case brought in New Jersey Superior Court by former shareholders of bankrupt dealership.

    • Successfully defended suit on behalf of major auto manufacturer in Federal Court in New Jersey by former owners of dealership alleging wrongful conduct led to failure of dealership.

    • Obtained dismissal of a case on behalf of major auto manufacturer in Federal Court in Massachusetts in a suit for wrongful termination brought by the 100% shareholder of a dealership that had previously filed for bankruptcy because shareholder lacked standing to assert claims on behalf of the dealership. Dismissal affirmed on appeal to the First Circuit.

  • Enforcing Operating and Sales Performance Standards.

    • Representing major motor vehicle manufacturer in case of first impression under New York law involving the reasonableness of the industry-wide methodology for measuring dealer sales effectiveness. After securing favorable judgment following a bench trial before the district court, the Second Circuit has certified questions concerning two statutory provisions to the New York Court of Appeals.

    • Successfully represented restaurant franchisor in a case against a franchisee that was maintaining a restaurant far below health code standards and was delinquent in his franchise payments.

    • In U.S. District Court in New Jersey obtained award of summary judgment and dismissal for major auto manufacturer of nine-count counterclaim upholding manufacturer’s right to terminate New Jersey dealer for adding a competing line make to its facilities. Also obtained $325,000 judgment against defendant dealer for post-termination trademark infringement for plaintiff. Case affirmed by Third Circuit Court of Appeals.

    • On behalf of major auto manufacturer, successfully defeated motion for preliminary injunction brought by dealer in U.S. District Court in Connecticut which sought to require approval of proposed sale and relocation contrary to manufacturer’s network plan.

    • Successfully defended major auto manufacturer in wrongful termination case in United States District Court for Southern District of New York involving alleged deficient performance under various operating standards.

    • Successfully represented truck manufacturer in N.D. Illinois against one of its Missouri dealers because of the dealer's failure to sell enough trucks. Case ultimately resolved through voluntary termination.

  • Conspiracy Claims. Represented truck manufacturer in an eight-count complaint in Minnesota State Court, alleging a variety of state statutory and common-law claims. Dealers alleged that manufacturer and a new dealer conspired and took to drive the plaintiffs out of business. After a six-week trial, a Minnesota jury returned a verdict in favor of our client.

  • Failure to Make Required Payments. Successfully represented bus manufacturer in Arkansas State Court in defense of two actions filed by one of its dealers terminated because dealer failed to pay for buses.

  • Franchisee / Dealer Misconduct. Successfully represented truck manufacturer in a lawsuit in U.S. District Court in New Jersey against one of its dealers alleging violations of the New Jersey Franchise Practices Act. Officers and managers of the dealership were under federal indictment, and later pled guilty, for bribing public officials to buy trucks from the dealership.

  • Fraud & Business Tort Claims.

    • Successfully represented franchisor of women’s clothing stores in a lawsuit filed by a franchisee in Seattle for various claims for breaches of the franchise agreement and purported misrepresentations made before the franchise agreement was signed.

    • Successfully resolved case for major auto manufacturer in U. S. District Court in New Jersey brought by former shareholders after dealership filed for bankruptcy. Former dealers alleged fraudulent inducement, RICO and other operations-based claims.

    • Obtained summary judgment for major auto manufacturer in RICO, fraud and breach of contract action in U.S. District Court for Northern District of Texas.

    • Defended leading fashion and apparel company in Federal Court in Massachusetts in action brought by affiliated manufacturers claiming fraud, breach of contract and damages of $63 million; obtained summary judgment on all counts |

    • Successfully represented retail furniture chain in a business dispute in California involving allegations of breach of contract, business torts, unfair competition and violations of state and federal pricing and anti-trust laws, which were made by the party holding the exclusive right to own and operate our client’s furniture retail outlets in California.

  • PMPA. Successfully handled an appeal for a petroleum products franchisor which resulted in the reversal of a trial court preliminary injunction and upheld the franchisor’s termination of a franchise, as well as a second appeal in the same case that reversed a jury verdict and held that the terminated franchisee’s state law claims were preempted by federal law.

  • Enforcing Arbitration Agreements. Obtained reversal by the Second Circuit Court of Appeals of Federal District Court’s denial of motion to compel arbitration of a dispute arising under an investment relationship between an auto manufacturer and an individual operator.

  • Personal Jurisdiction of Foreign Parent. Obtained favorable appellate decision from Wisconsin Supreme Court affirming that Japanese auto manufacturer was not subject to personal jurisdiction based on forum contacts of U.S.-based subsidiary.

  • Dealership and Add Point and Relocation Protests.

    • Successfully defended major auto manufacturer in consolidated protests before New Jersey Office of Administrative Law by three neighboring dealers to proposed relocation of competing dealer.

    • Obtained summary judgment in Massachusetts Superior Court in favor of major auto manufacturer on dealer’s challenge to proposed relocation under state motor vehicle franchise encroachment statute. Case affirmed by Massachusetts Appeals Court.

    • Successfully defended auto manufacturers’ proposed relocation of a competing dealer before the NJ Office of Administrative Law. ALJ’s decision affirmed by New Jersey appellate court.

    • On behalf of auto manufacturer, successfully defended numerous protests before the Connecticut Department of Motor Vehicles challenging the proposed establishment and relocation of competing dealerships.

    • In multi-day Massachusetts Federal Court trial, successfully defended major auto manufacturer in protest by dealer of establishment of dealership in an adjacent marketplace.

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Pricing, Incentive and Promotional Programs

  • Price Discrimination Claims. Won a key victory for medium and heavy-duty truck manufacturers in a case of first impression under Massachusetts law, in which the Massachusetts Superior Court Business Litigation Session concluded that the industry-wide practice of offering competitive pricing assistance — sometimes called “concessions” — does not constitute price discrimination under the Massachusetts motor vehicle franchise statute, Mass. Gen. Laws Chapter 93B.

  • Customer Satisfaction Programs. Obtained summary judgment on behalf of major auto manufacturer in Federal Court in New Hampshire in a suit brought by a former dealer for wrongful termination, challenging the manufacturer’s use of customer satisfaction scores to award incentive payments. The First Circuit affirmed.

  • Robinson-Patman Act. Represented a major auto manufacturer in a successful appeal to the Second Circuit in which summary judgment was affirmed as to plaintiff auto dealer’s claims for wrongful termination and violation of the Robinson-Patman Act.

  • Vertical Price Fixing. Prevailed in New York state court on motion to dismiss vertical price fixing charges brought by New York Attorney General against major mattress manufacturer; upheld by New York Appellate Division on appeal.

  • Antitrust Litigation. Successfully represented major hotel chain in action in Federal Court in Illinois asserting claims for antitrust violations, unfair competition and breach of contract arising out of an alleged termination of the plaintiff’s franchise agreement.

  • Warranty Reimbursement Programs.

    • Represented major auto manufacturer in declaratory judgment action in Federal Court in Maine regarding its warranty reimbursement policies and procedures.

    • Obtained affirmance by the Second Circuit of summary judgment on behalf of major auto manufacturer in a test case in which the dealer sought to recover additional statutory reimbursement under New York law in connection with warranty reimbursement claims accepted at the manufacturer’s standard rates over the previous decade.

    • Represented major auto manufacturer in a test case before the Second Circuit concerning the obligations of manufacturers under New York law to reimburse dealers for parts installed in connection with warranty repairs.

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Multi-District, Multi-Plaintiff and Class Actions

  • Consumer Class Actions Products.

    • Represented motor vehicle manufacturer in defense of putative nationwide class action filed in New Jersey federal court regarding alleging systemic steering defect in client’s marquee electric vehicle. After filing motion to dismiss, we negotiated a very favorable settlement on an individual basis.

    • Representing motor vehicle manufacturer in defense of putative nationwide class action regarding alleging systemic steering defect in client’s marquee electric vehicle.
    • For major auto manufacturer, obtained dismissal in Massachusetts Superior Court of statewide consumer protection class action alleging a defect in antifreeze.

  • National Price Fixing. On behalf of major bedding manufacturer, prevailed in Federal District Court on motion to dismiss antitrust claims (vertical and horizontal price fixing) by putative nationwide consumer class based on failure to define a plausible relevant product market or establish harm to interbrand competition. Successfully argued appeal to 11th Circuit.

  • Franchise Mass Action Pre-Sale Misrepresentation. Represented retail clients and multiple individual defendants in case involving 29 franchisees and individuals asserting various claims arising out of alleged breaches of parties’ franchise agreements, and representations allegedly made to persuade the franchisees to enter into the agreements.

  • Discrimination Claims. On behalf of a restaurant/entertainment employer, successfully resolved an EEOC-initiated, reverse sex discrimination hiring and promotion case through partial summary judgment. Case originally cast as a nationwide case with an enormous threatened exposure while summary judgment limited claims to a single location.

  • Hawaii Tip Statute Class Action. After remand, successfully represented major hotel chain in Federal Court in Hawaii in class action alleging improper retention of tips in violation of the Hawaii Tip Statute and the Unfair Competition Statute in 2009.

  • Minority Dealer Development Programs. Represented major auto manufacturer in a putative class action brought in Federal Court in New Jersey by several former participants in client’s minority dealer development program alleging civil rights violations and various other federal and state statutory and common law claims.

  • Sherman Act Class Action. Obtained victory for major bedding manufacturer in national antitrust class action in Federal Court in Georgia alleging violations of the Sherman Act

  • Membership Policies. Obtained partial summary judgment in Federal Court in Rhode Island for national membership warehouse retail store in a case challenging the retailer’s membership renewal policy, leading to favorable resolution of remaining claims with a negotiated class of current and former members.

  • Regional Counsel GM Post-Bankruptcy Arbitration. Served as regional counsel for General Motors in multiple dealer arbitrations brought pursuant to a special federal statute passed following GM’s bankruptcy which allowed the terminated dealers to seek reinstatement.

  • Encroachment and Territory Related Claims.

    • Successfully represented restaurant franchisor in a breach of contract case in Federal Court in Illinois brought by one of the client’s highest grossing franchisees in the suburban Chicago area complaining that other franchises being awarded in its territory.

    • Successfully defended heavy truck manufacturer in a jury trial in Minnesota State Court against myriad of claims associated with removal of a part of the dealers’ territory.

    • Obtained directed verdict on behalf of a major auto manufacturer in a Federal Court jury trial in Massachusetts in a suit brought by a dealer alleging unlawful encroachment on its market area.

  • Dealer Network Restructuring. Obtained dismissal, summary judgment, and an award of damages and attorneys’ fees on behalf of a major auto manufacturer and its real estate subsidiary against a group of affiliated dealerships in connection with three consolidated matters in Federal Court in New York arising from a complicated business transaction designed to implement various market representation initiatives.

  • Dealer Network Agreements. Assist major auto manufacturer implement its market development and dealer network strategies by developing various network related agreements, including market specific framework agreements and holding company and major investor related agreements.

  • Right of First Refusal.

    • On behalf of auto manufacturer, obtained a ruling from a state Supreme Court that an automaker’s exercise of its right of first refusal under its dealer agreement did not violate state motor vehicle franchise laws.

    • For major auto manufacturer, helped design and implement right of first refusal policies and procedures, including relevant transaction documents.

    • Successfully represented major auto manufacturer in Federal Court in upstate New York against challenge by dealer to automakers’ exercise of ROFR through use of poison pill provision.

    • Successfully defended major auto manufacturer in New York State Court against dealer’s challenge to automakers’ exercise of ROFR based on alleged untimeliness of exercise.

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 Bankruptcy and Financially Distressed Operations

  • Successfully represented bedding franchisee in bankruptcy proceeding by franchisor in Bankruptcy Court in Eastern District of New York upholding rights of franchisee for compensation if franchise agreement rejected.

  • On behalf of auto manufacturer, successfully opposed proposed sale of dealership in Ch. 11 bankruptcy in Bankruptcy Court in New Jersey based on, among other things, the dealer’s post-petition violation of its dealer agreement obligations and proposed sale terms which did not comply with the manufacturer’s contractual and statutory rights.

  • On behalf of auto manufacturer, successfully enforced in a dealer’s bankruptcy proceeding in the Bankruptcy Court for Eastern District of New York the terms of the auto manufacturer’s pre-petition Wind-Down Agreement.

  • On behalf of motorcycle manufacturer, successfully opposed the proposed plan of reorganization in the Bankruptcy Court for the Easter District of New York.

  • Successfully represented auto manufacturer and real estate affiliate in dealer’s Chapter 11 bankruptcy blocking proposed sale of the dealership assets in violation of the terms of various pre-bankruptcy settlements and restructuring agreements.

  • Successfully represented auto manufacturer in Chapter 11 bankruptcy in New Jersey blocking proposed sale of dealership, in part, because of dealer’s failure to conduct customary post-petition operations.

  • Represented major captive motor vehicle finance company in suit by dealer in Massachusetts State Court alleging improper enforcement by lender of floor plan terms. Successfully enforced termination of floor plan and related financing based on dealer’s default.

  • Successfully represented various auto manufacturers in numerous bankruptcy proceedings in Massachusetts, New Hampshire, Maine, New York and New Jersey in connection with proposed sales of dealerships, including upholding automaker’s contractual right of first refusal and defending automaker’s set off and recoupment rights.

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Trademarks, Trade Secrets and Non-Competition Agreements

  • Trademark Protection and Enforcement. Represent celebrity chef and several of his companies and restaurants in a wide spectrum of U.S. and international trademark matters. Our client and his companies operate more than 20 fine dining restaurants and more than 80 casual operations.

  • Trademark Litigation.

    • Defeated trademark infringement, tort and contract claims in Federal Court in Massachusetts brought against leading, public software company by local developer; summary judgment obtained on all counts.

    • Represented owner of the registered mark for shoes and clothing in opposition to registration of similar mark for shoes and clothing. Secured dismissal of counterclaim for cancellation prior to trial and obtained judgment on the merits in client following trial in reported decision.

    • Obtained order-freezing assets of counterfeiter from United States District Court for the Eastern District of New York followed by summary judgment of willful counterfeiting and a $2,400,000 judgment.

  • Software Audit Rights. On behalf of software development client, obtained preliminary injunction barring unlicensed use of sophisticated product development software worldwide and enforcing software designer’s audit rights, leading to successful resolution of all claims.

  • Post-Termination Enforcement. Obtained injunctions against the continued use of franchisor trademarks following the termination of dealer agreements with franchisees, including orders to reimburse attorneys’ fees associated with obtaining compliance. Successfully enjoined former franchisee from using marks and franchise system after termination.

  • Effectively Managing the Trademark Process. Assist large manufacturer of iconic footwear brands manage their global trademark portfolio of more than 6,000 trademarks. Using various SeyfarthLean® techniques we were able to reduce cycle time and costs in the trademark process. While the size of the overall portfolio increased by 14%, legal fees were reduced by 15% and, year-over-year improvement in prosecution productivity has averaged approximately 23%.

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Labor & Employment and Employee Benefits

  • Auto Franchise Discrimination Claim. Obtained a defense verdict, which the Third Circuit affirmed, for auto manufacturer in a three-week jury trial in a case involving alleged racial discrimination in connection with the decision to reject the proposed purchase of two automobile dealerships.

  • Auto Franchise Reverse Discrimination Claim. Defended auto manufacturer in a case brought in Federal Court in Pennsylvania by a disappointed would be purchaser of a large dealership alleging reverse discrimination after the manufacturer exercised its right of first refusal to award the point to a minority candidate to further its diversity goals.

  • FLSA Class Action. On behalf of a national restaurant chain, defeated class certification in FLSA overtime and minimum wage case involving more than 65,000 putative class members (current and former service and production employees).

  • Hotel Union Collective Bargaining. Represented the major unionized hotels in Washington D.C. in collective bargaining negotiations covering 6,000 union employees located in the Washington D.C. metro area. As Chief Negotiators, we helped client reach a new seven-year agreement where, historically, such contracts are only for three-year terms.

  • ACA Advice for Hotel Chain. After the adoption of the Affordable Care Act, Seyfarth has worked with the hospitality industry and hospitality associations to help hospitality companies understand, prepare for, and comply with the ACA including, for example, partnering with the world’s largest hotel chain and its franchisees, and a drive-in restaurant franchise, to provide ACA consulting, interpretation and strategic planning services.

  • Health & Welfare Programs. Represented an international chain of full service hotels and resorts on health and welfare design and compliance matters. For a significant period of time, we functioned as in-house counsel and assisted the hotel in a redesign and documentation of its health and welfare programs. Later expanded representation into the qualified and nonqualified retirement plan areas in order to consolidate the employee benefits work with a single outside counsel.

  • Amicus Brief in Supreme Court Individual Mandate Constitutional Challenge. Prepared and filed an amicus brief on behalf of a national restaurant association in a Supreme Court case hearing the individual mandate challenge, and provided webinars to the association members regarding oral arguments and the Supreme Court’s decision.

  • IRS Audit of Hotel Chain. Represented an international hotel chain in defending an IRS audit that spanned several years and volumes of document production. The audit concluded on favorable terms to the hotel: no finding of qualification errors in the 401(k) plan and a single technical error in the Retirement Plan.

  • EEOC Sex Discrimination Claim. Represented major restaurant chain as lead defense counsel in one of the largest sex discrimination lawsuits brought by the EEOC.

  • EEOC Racial Discrimination. Defending an EEOC pattern or practice lawsuit involving the restaurant industry in the U.S. District Court in Maryland. The case involves allegations of racial discrimination on behalf of applicants and employees as well as discouraging advertising practices for African-American applicants seeking job opportunities.

  • Labor Matters for Global Hotel Franchise. In addition to representing global hotel franchisor in employment litigation, also represented the hotel in more than 200 labor matters, including multiemployer union negotiations that included lock outs, strikes, and various NLRB matters.

  • Nationwide ADA Title III Lawsuits. Defended major hotel chain in a nationwide ADA Title III lawsuit by the Equal Rights Center and others. The plaintiffs sought injunctive and other relief at the more than 2,700 hotels in the system. Through a complex and successful motion to dismiss, secured the dismissal of all but four hotels from the case. Then worked with the owners of the remaining hotels (two managed and two franchised) to obtain a very favorable settlement through mediation.

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Real Estate

  • Medical Services Properties. Representing the country’s largest national welfare fund in the gaming and hospitality industry to establish an on-site medical home for delivery of medical services to the plan’s most seriously chronically ill participants as part of a cost saving initiative for the plan. The project involves coordination of multiple legal disciplines, including issues under: ERISA, LMRA, healthcare law, and commercial law (lease issues involving the space for housing the clinic).

  • International Franchise & Area Development Agreements. Represented a national restaurant company in connection with franchise and area development agreements with partners in Australia, Japan, Mexico and the Middle East.

  • Structuring Hotel Joint Venture. Represented a public pension fund in its joint venture with a hotel management company for the construction and operation of hotels for a major hotel franchisor. Among other matters, we negotiated a contribution agreement, partnership agreement, ground lease, and tri-party agreement, and counseled the client with respect to UBTI structural issues.

  • Food & Beverage Industry M&A. Represented major producer of food and beverage products in connection with numerous acquisition and divestiture transactions, including purchase of bagel businesses and subsequent sale thereof, purchase of a food service coffee business and subsequent sale thereof, sale of food service biscuit and hotcake business to private investor group, purchase of substantially all of the assets of a producer of instant soups and related products, purchase of all of the stock of companies engaged in pasta businesses in Brazil, and sale of the stock of manufacturer of premium chocolate to an entity controlled by a private equity fund.

  • QSR National Rebuild Project. Representing a national quick service restaurant company in the negotiation, ground leasing, acquisition, and/or scrape and rebuild of 88 project sites across approximately 37 states in the continental United States, including 17 in new markets in the upper Midwest and New England.

  • Manage Real Estate Leases for National Retail Chain. Managing in excess of 200 retail and franchisee leases for a national convenience store chain throughout the eastern United States. Utilizing SeyfarthLean® process improvement methodology, we created a process map depicting each step in a lease transaction to create consistency, standardization, quality control, efficiency significantly reducing the time from site selection to store opening.

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Data Security and Privacy

  • Security Breach Response for Hotel Franchisee. Served as lead counsel for major hotel franchisee in response to a security breach involving its POS systems that affected over 3,000 individuals throughout the country. Supervised the review of forensic experts analyzing the root causes, negotiated with privacy counsel for the franchisors, made determinations concerning notifications to be sent as well as prepared, edited and/or negotiated the terms of the notifications to consumers and regulators and managed responses to the media and regulators.

  • Counseling World’s Largest Fast food Restaurant Company re: Employment and Social Medial Sites. Counseling a Fortune 500 fast food restaurant company (36,000 restaurants in more than 110 countries) on privacy and data security issues relating to the company’s development and implementation of international employment and social networking websites. This includes their international HRIS and compensation system, as well as an internal corporate Facebook-like site. In addition, we have revamped the client’s background screening policies, procedures and processes.

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