ManpowerGroup 2009 Annual Report Download - page 40

38 Manpower 2009 Annual Report Management’s Discussion & Analysis
IMPACT OF ECONOMIC CONDITIONS
One of the principal attractions of using employment services providers is to maintain a fl exible supply of labor to meet
changing economic conditions. Therefore, the industry has been, and remains sensitive to, economic cycles. To help minimize
the effects of these economic cycles, we offer clients a continuum of services to meet their needs throughout the employment
and business cycle. We believe that the breadth of our operations and the diversity of our service mix cushion us against the
impact of an adverse economic cycle in any single country or industry. However, adverse economic conditions in any of
our largest markets, or in several markets simultaneously, would have a material impact on our consolidated fi nancial results.
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 benefi ts 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 fi rms 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 signifi cant
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 fi rms, including us.
In November 2004, French authorities commenced an investigation at our French headquarters. According to the search
warrant, the investigation stemmed 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 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 fi nes, 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 was provided, the Competition Council rendered its decision in the matter in February 2009
and levied a fi ne of €42.0 million ($55.9 million) based on the Competition Council’s determination of the damage to the
economy attributable to the alleged misconduct, with adjustment for aggravating or mitigating factors. We had accrued for
this as of December 31, 2008, paid this fi ne in April 2009 and appealed the Competition Council’s decision. In January 2010,
we received notifi cation that our appeal was denied. We are currently assessing whether to take any further action.
RECENTLY ISSUED ACCOUNTING STANDARDS
In December 2007, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on retirement
benefi ts. The new guidance requires additional disclosures about plan assets of a defi ned benefi t pension or other
postretirement plan. We adopted the guidance as of December 31, 2009. See Note 9 to the Consolidated Financial
Statements for the disclosure.
In December 2007, the FASB issued new accounting guidance on business combinations. The new guidance changes the
requirements for an acquirer’s recognition and measurement of the assets acquired and the liabilities assumed in a business
combination. We adopted the guidance effective January 1, 2009. There was no material impact of this adoption on our
Consolidated Financial Statements.
Management’s Discussion & Analysis
of fi nancial condition and results of operations