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© 2014 Zuckerman Spaeder LLP

In Battle of Words, Former Netflix Exec Says That Company Defamed Him

Apple iPad displaying NetflixJerry Kowal doesn’t have a lot of nice things to say about his former employer, Netflix.  In a recent lawsuit filed in California Superior Court, he claims that Netflix was a “cold and hostile company,” with a “cutthroat environment.”

According to Courthouse News’s description of Kowal’s complaint, Netflix didn’t have very nice things to say about Kowal, its former content acquisition executive, either.  Kowal alleges that when he told Netflix he was leaving for Amazon, Netflix lashed out by accusing him of stealing confidential information and passing it on to Amazon.  As a result of these accusations and Amazon’s “strict liability policy,” he was fired.

Now, Kowal has sued Netflix, its CEO Reed Hastings, executive Ted Sarandos, and Amazon, alleging a number of torts including defamation, false light invasion of privacy, civil conspiracy, intentional interference with employment relationship, blacklisting and wrongful termination.  Kowal’s suit shows that an employer’s decision to accuse a departed employee of wrongdoing carries with it a significant litigation risk, especially if the employee loses his job as a result of the accusation. Read More ›

The Inbox: April 4, 2014

We here at Suits By Suits used up pretty much all of our literary creativity in drafting last week’s Inbox, a stirring tribute to the late, great director John Hughes as seen through the cast of his seminal film, The Breakfast Club.  So this week, in the words of Joe Friday, you get just the facts, ma’am – which is to say, a terse rundown of the week’s developments delivered in a gruff, no-nonsense style:

  • This Wednesday, the U.S. Occupational Safety and Health Administration (OSHA) issued an interim final rule and public requests for comments regarding the employee protection provisions of the Consumer Financial Protection Act of 2010, the portion of the Dodd-Frank Act that established the Consumer Financial Protection Bureau to protect whistleblowers who report violations of various consumer protection laws.  The interim final rule describes the process that OSHA investigators and administrative law judges will take in evaluating whistleblower complaints under this statute, and mirror regulations OSHA has implemented over the last few years with respect to other whistleblower statutes under its jurisdiction.
  • We’ve previously discussed the Illinois appellate court’s 2013 decision in Fifield v. Premier Dealer Services, which altered the landscape of noncompete law in Illinois by seemingly declaring a bright-line rule that an employee must have worked for his or her employer for two years in order for the employer to subsequently enforce a noncompete clause.  This week, attorneys writing in the National Law Review analyze a recent decision by a federal District Court judge applying Illinois law, Montel Aetnastak v. Miessen.  In that case, the Court refused to follow Fifield and apply a “bright-line” two-year test, instead holding that the appellate court holdings have been “contradictory” and that there has been no “clear direction from the Illinois Supreme Court,” thus permitting that court to enforce a noncompete clause against an employee who had worked for her employer for only 15 months.  We will be watching to see how the state courts respond; we wouldn’t be surprised to see a certified question to the Illinois Supreme Court to resolve the status of Fifield with finality.
  • While the Hobby Lobby case has garnered national attention these past few weeks, a new dispute between religious employers and employees may be brewing in Hawaii.  The Roman Catholic Church has rolled out a new Teacher Employment Agreement that permits teachers at 36 parochial schools in Hawaii to be terminated for “living immorally,” defined as “adultery, homosexual activity, same sex unions, procuring, abetting or promoting abortion, euthanasia or in vitro fertilization, and unmarried cohabitation.”  The Hawaii Civil Rights Commission will scrutinize the contract to determine if the new contract violates Hawaii’s state law protections against discrimination based on marital status and sexual orientation, particularly with respect to teachers who teach purely secular subjects.  The superintendent of Hawaii Catholic Schools has argued that even secular teachers at parochial schools are “role models whose job is also a ministry,” thus falling under a ministerial exemption.  We’ll continue to monitor this situation.
  • Relatedly, a New York appellate court upheld a $1.6 million verdict (including $1.2 million in punitive damages) against Gloria’s Tribeca, Inc. and chief owner Edward Globokar, who own and operate a chain of Mexican restaurants in New York City called “Mary Ann’s.”  The restaurants would hold weekly, mandatory “prayer meetings” in which chef Mirella Salemi was insulted, told she was “going to hell” for being gay, and, in at least once case, was instructed to fire another employee for being gay.  (Salemi refused.)  The appellate court rejected the restaurant’s First Amendment claims, holding instead that the practices violated the New York City Human Rights Law.

Oh, and just one more thing:

  • Long-standing consumer advocate (and perennial Presidential candidate) Ralph Nader has launched “Nader’s Penny Brigade,” a grassroots organization with the goal of bringing attention to what Nader calls the growing disparity between executive compensation and average worker pay.  The first item on Nader’s agenda has to do with the accounting measures used in how large corporations accrue profits in relation to bonuses paid to top executives; an issue that we’ve previously highlighted in this space.  The organization’s name stems from Nader’s plea that shareholders donate one penny for every share that they own to fund oversight.  We just thought you might like to know.

More on Non-Competes in Florida: Defining the “Legitimate Business Interest”

In researching and writing Monday’s blog post, I came across another unique wrinkle in the Florida statute that governs covenants not to compete, § 542.335 of the Florida Statutes.  I think it's worth examining that provision in more detail as part of our ongoing efforts to educate employers and employees as to the varying state-by-state nuances in different jurisdictions that can affect the ultimate questions as to whether and how that state will enforce an employee’s covenant not to compete. Read More ›

The State-By-State Smackdown - New York vs. Florida: When Two Seemingly Similar Things Are Not The Same

In our recurring “State-by-State Smackdown” series on the evolving law with respect to covenants not to compete, we’ve described the traditional balancing-test approach that is the law in the majority of jurisdictions as the Legitimate Business Interest or “LBI” test.  In understanding this shifting landscape, we’ve typically highlighted statutes and/or judicial opinions in jurisdictions that have begun to shift away (or even depart entirely) from the classical LBI analysis.

Today, we’re doing something a little different, taking our cue from a recent New York state appellate decision:  Brown & Brown, Inc. v. Johnson, 980 N.Y.S. 2d 631 (App. Div., 4th Dep’t, February 7, 2014).  Read on. Read More ›

The Inbox: Mr. Vernon “Expected A Little More From A Varsity Letterman” Edition

It’s been a busy week here at the Suits-by-SuitsGlobal Executive Employment Dispute Centre in Washington, D.C., what with interesting Supreme Court arguments being heard, the famous Cherry Blossoms about to blossom, our beloved Nationals putting final touches on their pitching rotation, and even some more snow from the winter without end. 

But none of that matters next to what’s really important about this week: which is that Monday marked thirty years (!) since the fabled “Breakfast Club” met for detention on a dreary Saturday, March 24, 1984, (at Shermer High School, Shermer, Illinois…).  In celebration of the great teen-angst classic, we’re using quotes from the film to introduce this week's collection of interesting news notes from the world of executive-level employment disputes.  So here they are, framed by the work of the movie’s writer and director, the late, great John HughesRead More ›

Political Intrigue, Sex, And Money

college system troubleWe see – and report on – plenty of whistleblower complaints here at Suits-by-Suits. We’re mostly interested in how those complaints play out legally, and what they can teach us about ways to avoid, or manage, whistleblower disputes and what leads to them.  But outside of the law, some complaints include alleged facts that just tell a compelling story in and of themselves. 

How about these allegations in Glenn Meeks’ wrongful termination complaint against Chicago State University: Financial mismanagement, a romantic relationship between top university executives, high-level posts filled with unqualified personnel, intrigue on the university’s board of trustees after Meeks complained of these things, and – a bonus, from a storytelling perspective – a suspicion of improper interference by the Governor of Illinois in the whole thing. 

And another bonus: Meeks filed his complaint in Illinois state court just two weeks after another whistleblower at the same university was awarded $2.5 million  Read More ›

The Buddhist, The Bible, And Morning Coffee

Did you hear the one about the Buddhist marketing director who refused an order to add Bible verses to the daily morning e-mail he sent to all employees – and then got fired the next day, after an otherwise successful eight-year career?

This is, of course, not an opening line to a joke, but another installment in our occasional series about the intersection of religious beliefs (of all types) and employment – also of all types.  Religion and employment issues – whether it’s an employee in the C-suite or someone further along the hierarchy – almost never mix well.  Just this week, of course, nine of our fellow lawyers who happen to sit on the Supreme Court are hearing arguments in two cases about whether a company with a religious belief about contraception is exempt from the Affordable Care Act’s requirements for employer-provided health insurance. 

Far away from the hallowed marble home of the Supreme Court (which, by the way, we think is in a fine building -- unlike former Justice Harlan Fiske Stone) and down in the Eastern District of Texas, a new suit raises an interesting question of prohibited religious discrimination under Title VII: namely, can a fired Buddhist employee win damages from a company that, he says, fired him after eight years because he refused to put Bible quotations in the daily e-mail his employer had him write and send to all of the company’s 500 employees?  Read More ›

The Inbox - Vernal Equinox Edition

  • Spring FlowersAs part of its proposed acquisition by Comcast, Time Warner Cable will pay Chairman and CEO Robert Marcus (sadly, no relation), $79.8 million – including $20 million in cash – presumably because he is not expected to be in the C-suite at the new company.  We looked closely at a similar golden parachute for American Airlines’ CEO Tom Horton in its merger agreement with US Airways.
  • By contrast, Wells Fargo’s CEO John Stumpf isn’t going anywhere.  He earned $19.3 million in salary and bonus last year – down 15% down from 2012, when Stumpf was the highest paid CEO of a large U.S. bank.
  • A unit of Canon USA Inc. has sued  one of its competitors in the copier business – Ray Morgan Co. Inc. – in California federal court, claiming that Ray Morgan lured at least five account executives away from Canon and paid them incentives to convert Canon customers to Ray Morgan customers using Canon’s trade secrets.
  • The Pennsylvania Game Commission has decided that it will not be paying its former Executive Director Carl Roe $220,000 in severance – despite the Commission’s initial agreement to pay Roe that amount after he threatened to sue.  The Commission’s change of heart came after the state’s governor and several legislators sent a letter urging the Commission not to pay Roe severance.  The governor’s legal counsel determined that Roe didn’t have valid legal claims against the Commission.
  • The WSJ reported on a hearing last week organized by the EEOC on whether the use of social media by employees, job seekers and employers raises new issues for employment discrimination laws.  Among other things, participants discussed whether an employee posting negative remarks about another employee on Facebook could be grounds for a hostile work environment claim against the employer.

Lousiana College Did Not Renew Its Executive Vice President's Contract After He Accused His Boss of Misdirecting Funds to Tanzania - Is That Wrongful Termination?

SerengetiRegular readers of Suits by Suits know that employees – including executive-level employees with lucrative employment contracts and low-level employees who are at-will and have no contract – may claim wrongful termination against their former employers if the employees were fired in violation of “public policy.”  Recently, the former Executive Vice President of Louisiana College, Timothy Johnson – who had an employment contract with the College – filed a lawsuit alleging that the College retaliated against him after he raised concerns that the College’s President misdirected the contributions of a large donor to a project in Tanzania. A link to Johnson’s complaint is in this recent report about the lawsuit.  A photo taken in the Serengeti National Park in Tanzania is above. Read More ›

The Inbox - Blarney Edition

Businessman Putting Money into PocketTop ‘o the mornin’ to ya!  In honor of St. Patrick’s Day, we considered writing today’s inbox entirely in Irish-speak.  We could have told you to sit down and wet the tea, or sip on a pint of Gat, while we spun tales of how an executive’s suit put the heart crossways in his employer.  But because we didn’t want anyone feeling the fear tomorrow, we decided to stick with our tried-and-true approach of (somewhat) plain American English.

  • Bonuses on Wall Street are flowing like Guinness, says The Age.  New York’s state comptroller says that firms paid their highest bonuses since 2007, with an average of $164,530.  However, for those looking to get a piece of that pot of gold, the news wasn’t all good: jobs in finance declined.
  • Glenn Kessler of the Washington Post’s Fact Checker put together this interesting piece on Edward Snowden’s claim that federal law did not protect him from whistleblower retaliation.  Kessler concluded by awarding Snowden only one Pinocchio for “some shading of the facts.”  Snowden has many Pinocchios to go if he wants to reach the levels achieved by many illustrious citizens of Washington, D.C.
  • Andrew Burrell of The Australian reports that BHP Billiton’s decision to pay large bonuses has boomeranged on the executives of the resources giant, with shareholders voicing their disapproval (subscription required).  Yes, we included this news solely to use the pun.  No, we do not have a subscription to The Australian.
  • TheTownTalk.com brings us news of a Louisiana College VP’s lawsuit against his employer in state court.  The vice president, Tim Johnson, claims that the Baptist school and its president retaliated against him for blowing the whistle on the president’s diversion of funds.  An outside law firm has already advised the college that the president “misrepresented material information to the Board of Trustees on countless occasions,” but a committee appointed by the board rejected that conclusion.
  • A New York trial judge questioned a hedge fund’s efforts to have a former analyst jailed for stealing trade secrets, reported Stewart Bishop of Law360 (subscription required, and yes, we do have one).  Justice Jeffrey Oing told lawyers for Two Sigma Investments LLC that it might be “going over the top” by pursuing jail time for Kang Gao, who is accused of illegally accessing and copying Two Sigma’s confidential information.