Happy Wednesday, Inside Track readers. In this edition of the briefing, we're examining a companywide memo from Snap's GC, who is none too pleased that employees are leaking internal information. Plus, we've asked around about the international impacts of a major privacy case before the Supreme Court. And if you've ever wondered what to consider when it comes to Brexit, we've got an answer for you.

As always, if you have questions or tips, you can email me at [email protected] or find me on Twitter at @jenkayw.

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What's happening –

SNAP GC, LEAKS AND JAIL. Efforts by in-house counsel to prevent leaks often include employee handbooks, contracts and training. But Snap's GC, Michael O'Sullivan, seemingly took it up a notch recently when he sent a memo to employees, telling them that if they leak info, the consequences include job loss and that the company will “pursue any and all legal remedies.”

And there's more. The Jan. 8 memo, which was first leaked by financial news network Cheddar, also notes that the government can put leakers in jail. Snap has yet to return my emails, but I wanted to know: Is this standard practice when it comes to deterring potential leakers? Or is this a new…approach?

➤ An obligation to protect. “Companies need to take measures, often serious ones, to protect their confidential information,” said Jason Winmill, managing partner at consulting firm Argopoint, who has no direct knowledge of Snap or the memo itself. “In my experience, this involves training, monitoring, and sometimes targeted interventions by the legal department,” he said.

➤ And on this memo. “General counsels are sophisticated users of language,” Winmill said. “Written [communications] that use the words 'you' and 'jail' are uncommon in my experience, and are most likely intended to send a pointed, serious message.”

Tough boss. “We need to remember the world of technology start-ups can sometimes be 'rough and tumble,'” Winmill noted. “Even beloved brands, like Apple, went through periods where senior leaders, like Steve Jobs, used direct, harsh, and pointed communication when managing employees. The merits of this management approach are the subject of much debate…”

MICROSOFT'S SCOTUS CASE, INTERNATIONAL EDITION. The Supreme Court is set to look at whether a search warrant requires Microsoft to hand over emails stored in Ireland to U.S. law enforcement. Many briefs have been submitted in anticipation. For in-house attorneys in global companies, what's at stake? Here's what I found out…

➤ How might the case change the way global companies think about storing data?

According to Kevin Angle, privacy & cybersecurity counsel at Ropes & Gray, a ruling in the government's favor could mean conflicting legal demands. “Article 48 of the GDPR, for example, generally prohibits recognition of a foreign judgment requiring a data transfer to a third country unless it is through international agreements like MLATs,” he said, adding that while some exceptions may apply, they're ambiguous and it's difficult for companies responding to Stored Communications Act warrants to know how to respond.

➤ What happens if…

With a Microsoft win, companies may store more data outside the U.S., “emboldened by the notion that doing so may shield the information behind more protective, non-US privacy laws and out of the reach of U.S. legal process,” said Bret Cohen, partner at Hogan Lovells. Foreign jurisdictions could view the ruling as a guarantee that the U.S. courts will respect non-U.S. privacy laws, he added.

On the other hand, Cohen said, if the decision comes down against Microsoft, “we likely would go back to the status quo before the Second Circuit decided in Microsoft's favor,” Cohen said. “Since the Second Circuit opinion, there has been a charm offensive by U.S. tech companies, which use the case to argue that they U.S. law will respect foreign privacy laws. That will end.”

“I think there's a bit of a myth, almost, that every company is going to see some great windfall [from the tax reform]. It's actually going to affect many different companies and industries in different ways. The more one has an intangible and intellectual property-based business, the less of a windfall, let's say, there is going to be.”

- Microsoft chief legal officer Brad Smith speaking to CNN on the recent tax reform.

FLORIDA ATTORNEY AGREES TO DISBARMENT. James Patrick Stanton, a former in-house attorney for a Florida company, MaintenX, recently agreed to disbarment behind allegations that he was secretly videotaping female employees in company restrooms. My colleague Stephanie Forshee spoke last week with Stanton, who said he's been “denying the allegations since they began.” Here's what we know.

➤ In 2010, Stanton, who was listed in court docs as MaintenX's attorney and CFO, had his laptop repaired. The employee repairing the computer allegedly found the videos.

➤ Stanton faced criminal charges, which were dropped due to the statute of limitations. A civil case filed by one woman who appeared in the videos was settled.

➤ For now, Stanton's agreement to disbarment awaits approval from the Florida Supreme Court. He is still listed as an attorney in good standing with no disciplinary history and is practicing law in Florida. Along with denying the allegations against him, Stanton told Stephanie that he is ready to “move on.”

Question of the week –

You know the drill: Each week, we're going to top practitioners to answer your questions. If you have a pressing question, send it my way.

This week's question:

Brexit, yeah – I read the papers back in June 2016 – what has happened since and what do I need to know or do now about it?

Refresher.

The UK and the EU have in the meantime agreed [to] some principles on how to go about the separation. [But] a lot of that was just political posturing. We still do not know what rights and obligations UK and EU companies will have in March 2019, when the UK leaves the EU.

So what do we do now?

Frustratingly little. We know that it is likely that the UK will accept current arrangements and provide the EU with similar levels of scrutiny and oversight as they have now for at least two years, until 2021, but it is not 100% sure.

The safest thing to do is to prepare for the possibility that as of March 2019 the UK will be a “third country,” i.e. outside the EU “club.” This may seriously affect your company if, for instance, you have your EMEA HQ in the UK, or if your European operations have an important UK component. If that is the case, then you do need to assess your risk. Gather at least the following functions: finance (and tax), legal (commercial and corporate), regulatory, human resources, and communications. Then look at these aspects of your business:

➤ Organisational setup. If you have operations in both the EU and the UK, consider how they may be impacted. Most organisations in the EU have a matrix model. This presupposes, to a certain extent, the ability to transfer employees from one EU country to another – this may not be so easy.

➤ Finance. You should review your financial covenants, material adverse change clauses, credit rating triggers and other break, termination, or ratchet clauses in its loan agreements, leases, banking arrangements, and other contracts. References to the EU are more common than you think.

➤ Contracts. Some agreements may contain territorial definitions (e.g., the European Union), which may have to be amended. This might include, for example, intellectual property licences, distribution and franchise agreements or insurance policies, as well as non-compete clauses. Choice of law clauses and dispute resolution mechanisms may need to be reviewed.

➤ Regulation. Your organisation may be heavily dependent on sector-specific regulation. Healthcare, telecommunications, and financial services are just some examples.

➤ Relationship with the European Union. Even if you think you don't have one…. Some company of your group may be benefiting from EU grants or other EU funding or aid, such as in the form of support to research activities, regional support to less developed areas that in turn means reduced local taxes to one of your offices etc.

- Alessandro Galtieri, VP of corporate law at Colt Technology Services Group. (Edited for clarity and length.)

Don't miss –

January 29 – February 1. Last reminder for ALM's Legalweek event in New York City, where panelists will look how tech is impacting the legal industry. Speakers include counsel from JPMorgan Chase, Goldman Sachs, Wells Fargo and Bristol-Myers Squibb.

Tuesday, February 6. What should firms do to address the threat of a breach? And how can in-house counsel navigate involvement from the government after a cyber incident? At an upcoming Association of Corporate Counsel Foundation event, in-house attorneys from Verizon, Sprint and Volkswagen Group of America, to name a few, will answer these questions and others around cybersecurity. More info on the Washington, D.C. event here.

Tuesday, February 13. An upcoming webinar from the American Bar Association will look at regulatory compliance issues in China, as well as explore some best practices for responding to government investigations. More here.

On the move –

Where's the gold watch? Adobe general counsel Michael Dillon is retiring this year, the company announced Monday. Dillon, who has been with the company since 2012, will leave once his replacement has been found. As fellow in-house reporter Stephanie pointed out, Dillon was recently among a number of in-house attorneys who penned a letter to President Donald Trump, urging him to preserve the Deferred Action for Childhood Arrivals program.

Hints about Amazon. Amazon is looking for an in-house attorney experienced in dealing with the Health Insurance Portability and Accountability Act. Last year, during a discussion with the Seattle-based company's general counsel, David Zapolsky, I came to discover just how massive the legal department is, with more than 800 staffers as of last summer, including over 400 attorneys. So is it surprising that Amazon is adding to its legal ranks? Not at all. But as my colleague Kristen Rasmussen noted, this recent listing may signal the giant's plans to move into the health care space.

Reaching the top. After close to two decades in various in-house roles, David Shofihas been named chief legal officer of technology company Univercells. Shofi joined the company, which is based in Belgium, this month, according to his LinkedIn profile. Previous roles include: VP of IP strategy solutions and chief IP counsel for CPA Global, chief IP counsel for international semiconductor and life sciences company ATMI and IP counsel for IBM.

Facebook amps up focus on cybersecurity. Nathaniel Gleicher has been hired as Facebook's first head of cybersecurity policy. Gleicher previously served as cybersecurity policy director in the White House and senior counsel for the DOJ's computer crime and intellectual property section. The news, first reported by CyberScoop, signals the social media giant's focus on fighting disinformation and cyberattacks.