Editor: Please describe your background.
Dinkoff: I have been practicing law for 30 years, 17 of which I spent doing general commercial litigation, regulatory enforcement work, securities and commodities litigation - 13 years at the law firm Baer, Marks & Upham, LLP and four years as Deputy General Counsel for litigation at GAF, where I handled a wide range of complex commercial, intellectual property and products liability litigation. When I joined Merrill Lynch & Co., Inc. in 1997, I began focusing on employment law. As head of the employment law group at Merrill, I was responsible for all of Merrill Lynch's employment issues globally. We were in over 40 countries on six continents and at one time had 76,000 employees. Post 9/11 and the tech bubble burst, we took the organization down to approximately 49,000 employees over about 14 months without any litigation. Unfortunately, Merrill Lynch was one of the casualties of the financial crisis, and following the Bank of America acquisition I left the organization and came to Weil Gotshal.
Editor: Why did you select Weil Gotshal?
Dinkoff: I had worked with Weil when I was at Baer, Marks, so I have known people here for 25 years or so. I also used Weil as outside counsel when I was at GAF and at Merrill, and in every case I was impressed. What I always admired about the firm was the uniform quality of the partners and their interdisciplinary approach to problems. They were unlike most of the law firms I dealt with. There are no silos of expertise; instead there is an integrated, interdisciplinary approach to problems - appropriately so, for rarely do business problems fit themselves neatly into one particular area of discipline within the law, especially when it comes to the kinds of complex problems that require sophisticated counsel. I have always felt that Weil Gotshal was one of the very best at providing an integrated solution.
This carries over to employment matters. Weil has a very strong litigation approach to employment issues when needed. Of course, not every employment issue does involve litigation - and certainly Weil attorneys are highly skilled at counseling and avoiding litigation - but when it comes time to litigate, Weil offers highly skilled litigators who are experts in employment, not employment lawyers who can do litigation.
Editor: What insights gained from being in-house at Merrill Lynch do you feel will benefit you in serving the firm's clients?
Dinkoff: One of the frustrations I had as an in-house lawyer was that lawyers tend to look at things from their perspective. They tend to think about what is good for them and their law firm rather than what the client needs or wants. This powerful lesson plays itself out in a variety of ways. Clearly clients are concerned about costs, but outside counsel should think about this on a more sophisticated level. Clients are willing to pay a fair price for a product, so the question becomes, what is the work product worth? What is that advice or that motion for summary judgment or that case worth?
Even more importantly, what is it the client ultimately wants to achieve - how does the client define a "win"? Maybe to the client, a jury verdict six years and millions of dollars later is not the "win" it is looking for.
"Wins" also include smaller things, such as making sure that a client feels comfortable in a deposition. Depositions are not just about ensuring that the witness advances the case; the challenge also is to make the client comfortable about being in that deposition. Do they feel prepared? Do they understand the process? Do they feel that you are in control? Making that happen for senior executives can be particularly difficult.
I believe that a lawyer who knows the business is infinitely more valuable than a lawyer who does not. The last thing that the client wants to do is spend time educating its attorney about its business. Generally, a client expects you to have educated yourself about the business before you come to see them. If you do not understand the business, you cannot begin to help the client solve problems, and ultimately what clients need help solving is a business problem, which just happens to have manifested itself as a legal problem.
Finally, being in-house taught me how to talk with senior executives and business people about complex legal issues. Lawyers love to wrap themselves up in the nuances of a particular legal issue or problem. Business people would much prefer you to present the factual and legal issues clearly and concisely. No senior executive wants to read a 20-page memo; they want to know the key facts and issues necessary for them to make a business decision. They also want to feel like you are on their side, even when you are delivering bad news.
Editor: As head of Merrill Lynch's Employment Law Group please describe the areas of employment law that occupied most of your practice.
Dinkoff: First, I helped senior management find ways to accomplish their business objectives in a way that ameliorated legal and HR risks. This meant that I, along with the people who worked for me, sat at the table with senior business leaders and senior HR executives both to strategize about issues and to implement key business initiatives.
Second, I dealt with significant litigation issues. The people who worked for me handled much of the routine litigation that any corporation the size of Merrill Lynch encounters. The litigation that I handled directly included discrimination class actions and wage-and-hour class actions that challenged the exempt-from-overtime status of our financial advisors. I also handled the largest sex discrimination case ever to go to trial in London, in which we prevailed.
Editor: You were a key player in setting up diversity and anti-discrimination programs. Please describe any unique features of these programs.
Dinkoff: I believe that in order to be successful, diversity initiatives in any organization must be on a par with other critical business initiatives. At Merrill, senior executives sat down to monthly or quarterly business reviews, and various diversity issues were among the issues covered in those reviews together with other critical business matters. Diversity should be embedded in the day-to-day business of the organization.
In addition, it is essential to get diverse and non-diverse people to bridge the gaps between them and make them comfortable talking with each other. Open engagement leads to successful mentoring, feedback and employee development.
We also built an objective and transparent process for promotions, distribution of accounts and other opportunities, which led to our focus on a diversity pipeline. When a job opportunity arises, one of the questions to ask is, "Where are the diverse candidates who are potential candidates for this position?" If you don't currently have any, then the question becomes, "What are we doing to develop the pipeline so that the next time this kind of opening comes up we have more options?" At the end of the day we are going to pick the best person for the position, but there should be a diverse pool or something has to change to create that pool.
Editor: I understand that at a prior law firm you secured a landmark decision establishing for the first time an absolute immunity for statements made by members of the securities industry to self-regulatory organizations about terminated employees. Please explain the vast implications of this decision.
Dinkoff: The case, Beck vs. Herzfeld & Stern, was the first case to hold that an absolute immunity exists for statements made by brokerage firms on what is called the Form U-5, which every brokerage firm is required to file when it terminates the registration of an employee. If a registered person has been fired, for example, the firm is required to state on the form the reasons why the person was fired. Only a voluntary departure does not require an explanation. The reason this is so important is that this form differentiates the securities industry from every other industry in the U.S. Most companies have a policy that prohibits saying anything about somebody who was an employee of the firm beyond basic demographic information (and occasionally, with the employee's consent, compensation information) because they are afraid of being sued for defamation.
Arbitration panels were making big awards on defamation claims when they simply disagreed with the brokerage firm about whether the person should have been fired. As a result, brokerage firms were becoming reluctant to discharge people whom they should discharge from a regulatory and client-protection perspective because they were afraid of what they would be forced to put down on their Form U-5. And when they did file a U-5, they were being vague or evasive, thereby depriving regulators of the information they needed to monitor the activities of employees in the brokerage industry.
Editor: What are some of the administration's initiatives in terms of employment legislation that clients should be aware of?
Dinkoff: We have both legislation and agency issues, the latter being controlled directly and indirectly by the administration.
In terms of legislation, I think the bill that will have the greatest impact is the proposed Fair Pay Act, which has two components of great significance to employers. A lawyer might focus on the enhanced damages for violations or the creation of retaliation claims or that the proposed statute would expand gender discrimination to race and national origin discrimination, but the real issue that should worry in-house lawyers and employers is the dramatic change this bill would make in how companies think about compensation.
It does so in two ways. First, the law as it stands today talks about individuals; it basically uses as its model two people hired for the same job - a man and a woman who are being paid differently because of their sex. The proposed legislation will look beyond individuals to job segregation. Let's say women tend to be clustered in Job A, while men are clustered in Job B. If the jobs are "equivalent," paying the two groups differently would be a violation of the statute.
Second, under current law you can justify paying a man and a woman differently if you are doing so "for a reason other than sex." For example, I am hiring John and Jane for the same job, and I ask each how much he or she wants. John says $40,000, while Jane says $37,000, and I agree to both. This is OK under the current statute. However under the proposed legislation, this is unlikely to be sufficient. Instead, the employer will be required to establish that the pay differential between John and Jane (or the process that created that differential) serves a legitimate business purpose and that no alternative practice would both eliminate the differential and serve the company's legitimate business needs. Paying John and Jane what they each asked for may be difficult to justify under that test if it results in Jane being paid less.
As far as administrative and agency issues, there are a number of things employers should be concerned about. First, funding for the EEOC and the Department of Labor has been increased significantly. The 2010 budget for the EEOC increased almost 7 percent, and it has hired 155 new investigators, with plans to add another 100 in the next year. The Wage and Hour Division of the Department of Labor also secured a very significant increase in funding, and it has hired 250 new investigators - a one-third increase. The Officer of Federal Contract Compliance Programs (OFCCP) hired 213 new employees. All of these agencies are planning on significantly ramping up their enforcement activities. The EEOC is focused on bringing "systemic" cases rather than just cases addressed to discrimination against a particular individual, and the OFCCP will be focused on pay-equity issues. The Department of Labor will be focused on wage-and-hour issues, in particular, misclassification of employees. The Wage and Hour Division is hiring 90 new investigators to specifically target industries where they believe that employees are being misclassified as independent contractors.
Editor: Is there anything that you would like to add?
Dinkoff: Just that I have enjoyed both being inside at a great firm like Merrill Lynch and outside at a great firm like Weil Gotshal. This diversity of experience has enabled me to become the kind of lawyer I am today.
Published June 2, 2010.
