TECHNOLOGY, OUTSOURCING, AND COMMERCIAL TRANSACTIONS
NEWS FOR LAWYERS AND SOURCING PROFESSIONALS

Robots are once again changing the workforce landscape, but this time they aren’t limited to the mechanical variety found on an automobile assembly line. The new buzzword in outsourcing is “software robots,” which are software products that are increasingly used to perform a variety of repetitive tasks traditionally executed by humans. These next-generation robots automate business processes, and they are fast, accurate, and highly scalable at a known cost.

A recent article by Information Services Group (ISG) partner Harvey Gluckman highlights the following trends in the global sourcing market over the last two years:

  • Higher volumes of smaller deals with shorter contract terms
  • An increased occurrence of "best of breed" multisourcing
  • A shift away from the request for proposal process toward the more flexible, collaborative "request for solution" approach
  • The emergence of new managed service markets

These topics will be explored further at the upcoming ISG Americas Sourcing Industry Conference held September 29–30 in Dallas, Texas.

California legislators recently signed Senate Bill 962 into law, which requires manufacturers to install kill-switches on smartphones sold in California that are made on or after July 1, 2015. A kill-switch allows a smartphone owner to remotely disable the device via a wireless command, which renders the device inoperable to unauthorized users. This new law was passed on August 25 to deter smartphone theft in California.

Although manufacturers must include the kill-switch on smartphones, consumers will have the option to disable it as long as the consumer is informed that the function is designed to protect him or her from unauthorized use of the phone.

In signing Delaware House Bill 295 into law on July 1, Delaware became the latest in a series of states to address the safe destruction of documents that contain consumers’ personal identifying information. Under the law, a commercial entity—i.e., a corporation, business trust, estate, trust, partnership, limited partnership, limited liability partnership, limited liability company, association, organization, joint venture, or other legal entity, whether or not for profit—must take reasonable steps to destroy or arrange for the destruction of personal identifying information in its custody and control that the commercial entity will no longer retain. This consumer information must be shredded, erased, or otherwise destroyed or modified so that the information is entirely unreadable or indecipherable.

As part of its simplification initiative, the Financial Accounting Standards Board (FASB) issued a proposed Accounting Standards Update on August 20 that addresses accounting principles related to cloud computing arrangements. The proposed update is intended to provide customers in such arrangements with guidance about the financial reporting of fees paid for cloud computing services.

A growing trend in the fitness industry is the use of wearable electronic devices to track personal health and training information, such as sleeping patterns, heart rate, running speed, calories burned, current location, and distance and route traveled. These wearable devices are aimed at consumers who want to live healthier lifestyles by letting them track their daily activities to help monitor their fitness progress. Although perhaps helpful for such purposes, using these devices may come at the expense of one’s privacy.

New Jersey’s Opportunity to Compete Act (OTCA), which restricts an employer's ability to make hiring decisions on the basis of an applicant's criminal background, was signed into law on August 11. A recent LawFlash by Morgan Lewis's Labor and Employment Practice provides an overview of the OTCA—the latest in a wave of "ban the box" legislation that is sweeping the United States—and its implications for employers.

It is not unusual, as part of any outsourcing or services relationship, for a customer and service provider to agree to some form of background checks for service provider personnel assigned to the customer's account. With the increasing trend toward "ban the box" legislation, both customers and service providers should consider the effect of such laws and the ability to require criminal background checks in certain states.

Outsourcing stakeholders should check out Deloitte's 2014 Global Outsourcing and Insourcing Survey. The survey results highlight what the future may hold for companies across several business functions and provide “insight into client executives' plans and perceptions related to the outsourcing industry.”

The U.S. Department of State (DOS) recently released its September 2014 Visa Bulletin, which sets out per-country priority date cutoffs that regulate the flow of adjustment of status and consular immigrant visa applications. The global movement in the employment-based categories of the bulletin is highlighted in a recent Immigration Alert by Morgan Lewis's Immigration practice.

As the Alert discusses, priority date cutoffs are assessed on a monthly basis by the DOS, based on anticipated demand. Customers of service providers that use foreign personnel working in the United States under work visas should consider movement in priority date cutoffs when projecting staffing requirements and obtain assurances from their service providers that they have enough eligible personnel to meet such projected staffing requirements.

The Payment Card Industry (PCI) Security Standards Council recently published new guidance supporting PCI Data Security Standard 3.0 (PCI DSS 3.0). This guidance was released to help merchants reduce the risk of compromising payment card data when engaging third parties as service providers (e.g., call centers and e-commerce payment providers). The guidance provides a series of payment security best practices to use when engaging service providers and is designed to help merchants and their service providers better understand their respective roles and responsibilities in securing and protecting payment card data.