ManpowerGroup 2008 Annual Report Download - page 39

37Manpower Annual Report 2008 Management’s Discussion & Analysis
LEGAL REGULATIONS
The employment services industry is closely regulated in all of the major markets in which we operate except the U.S. and
Canada. Many countries impose licensing or registration requirements and substantive restrictions on employment services,
either on the provider of recruitment services or the ultimate client company, or minimum benefits to be paid to the temporary
employee either during or following the temporary assignment. Regulations also may restrict the length of assignments, the
type of work permitted or the occasions on which contingent workers may be used. Changes in applicable laws or regulations
have occurred in the past and are expected in the future to affect the extent to which employment services firms may operate.
These changes could impose additional costs, taxes, record keeping or reporting requirements; restrict the tasks to which
contingent workers may be assigned; limit the duration of or otherwise impose restrictions on the nature of the relationship
(with us or the client); or otherwise adversely affect the industry. All of our other service lines are currently not regulated.
In many markets, the existence or absence of collective bargaining agreements with labor organizations has a significant
impact on our operations and the ability of clients to utilize our services. In some markets, labor agreements are structured on
a national or industry-wide (rather than a company-by-company) basis. Changes in these collective bargaining agreements
have occurred in the past, are expected to occur in the future, and may have a material impact on the operations of
employment services firms, including us.
In November 2004, French authorities commenced an investigation at our French headquarters. According to the search
warrant, the investigation stems from a complaint submitted during 2003 to the European Commission and subsequently
transferred to France’s Direction Generale de la Concurrence, de la Consommation et de la Repression des Fraudes
(“DGCCRF”), a body of the French Finance Minister that investigates frauds and competition violations. This investigation has
led the DGCCRF to transmit the results of its inquiry to the French Competition Council. In November 2007, we received a
Statement of Objections from the Competition Council alleging illegal information sharing between us and certain of our
competitors. We responded to this Statement of Objections in February 2008, defending our position.
In June 2008, we received a Report from the Competition Council, which was prepared by the case handler for the Competition
Council and opened the second phase of the procedure before the Competition Council. The Report rejected all of the
defense arguments we made in our initial response and maintained the objections as set forth in the Statement of Objections.
It also provided the Competition Council with the elements for the calculation of fines, including the case handler’s estimation
of our portion of the alleged damage to the economy.
We responded to the June 2008 Report in August 2008, providing further arguments and information in defense of our
position and providing our own estimation of the alleged damage to the economy. A hearing on the matter before the
Competition Council was held in October 2008.
After considering the input that has been provided, the Competition Council rendered its decision in the matter in February
2009 and levied a fine of €42.0 million ($53.8 million) based on the council’s determination of the damage to the economy
attributable to the alleged misconduct, with adjustment for aggravating or mitigating factors. We will be required to pay this
fine in early 2009, but are currently planning to appeal the Competition Council’s decision. We had previously recorded a
reserve sufficient to cover the fine.
RECENTLY ISSUED ACCOUNTING STANDARDS
In December 2008, the FASB issued FASB Staff Position No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement
Benefit Plan Assets” (“FSP FAS132(R)-1”). FSP FAS132(R)-1 requires additional disclosures about plan assets of a defined
benefit pension or other postretirement plan. FSP FAS132(R)-1 will be effective for us in 2009.
In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”). SFAS
141(R) changes the requirements for an acquirer’s recognition and measurement of the assets acquired and the liabilities
assumed in a business combination. SFAS 141(R) is effective for us in 2009. The impact of SFAS 141(R) is dependent on the
level of future acquisitions.
In April 2008, the FASB issued FASB Staff Position No. FAS 142-3, “Determination of the Useful Life of Intangible Assets”
(“FSP FAS 142-3”). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized intangible asset under SFAS 142, “Goodwill and Other
Intangible Assets.” FSP FAS 142-3 is effective for us in 2009 and must be applied prospectively. We do not expect the
adoption of this statement to have a material impact on our consolidated financial statements.