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Showing 12 posts from January 2013.

Sometimes, It Pays To Be A Bad Sport: California Court Finds That Employee Who Deceived Her Employer About Having Signed An Arbitration Agreement Cannot Be Compelled To Arbitrate

TreadmillsWe have written previously about litigants’ attempts to compel arbitration under a theory of “equitable estoppel.”  For example, last July we discussed the move by Silicon Valley venture capital firm Kleiner Perkins to force its former partner, Ellen Pao, to arbitrate their sexual harassment dispute on the theory that, despite the absence of an agreement to arbitrate between the parties, it would be inequitable to allow Pao to avoid arbitration.  Although the trial court rejected this argument, Kleiner Perkins appealed and is awaiting a decision.

Since then, the issue of equitable estoppel has cropped up again in the California courts.  Just last week, in a decision that may have ramifications for Pao and Kleiner Perkins, the California Supreme Court declined to review (subscription required) a decision by a California appeals court affirming the denial of The Sports Club Company’s motion to compel arbitration against its former employee, Susan Gorlach. Read More ›

The Inbox - January 25, 2013

Horses on the Farm

As the snow accumulates, so does the Suits by Suits news:

  • Andrew Wilson of the Louisville Courier-Journal brings us the fascinating story of family strife at the American Life and Accident Insurance Company of Kentucky.  Wilson reports that Nancy “Nana” Lampton, the chair and CEO of the company, has been sued by her brothers for corporate waste.  They claim that Lampton is using the company for her own personal financial gain, including buying horse farms, commissioning a symphony, building a green roof, and other perks.  Lucille Bluth is still not impressed.
Read More ›

State vs. State Smackdown: How Other Courts Are Responding To California’s Unique Law ‎Prohibiting Covenants Not To Compete

In last week’s Inbox, we briefly discussed the dispute between rival insurers Aon and Alliant Insurance Services, Inc.; that lawsuit centers around Aon’s allegations that Alliant raided Aon’s top executives in violation of those employees' covenants not to compete contained within their employment agreements with Aon.  That dispute is currently being fought via two parallel lawsuits brought in two different states, New York and California.

Ordinarily, the plaintiff is “master of his or her complaint,” meaning that even if a lawsuit could be brought in multiple jurisdictions, courts will typically defer to the forum chosen by the plaintiff.  When parties have claims against each other but prefer different states, this doctrine often results in a so-called “race to the courthouse” in which the first party to file “wins” his or her chosen forum.  The “first filed” complaint – the “winner,” if you will, then typically moves to either stay or dismiss the second-filed parallel jurisdiction in the “loser’s” state, and the “loser’s” court almost always complies.  This may not be high-minded justice, but it is routine.

Or so we thought. Read More ›

In Hallmark Ruling, Court Affirms Jury Verdict Against Greeting Card Exec

Hallmark RulingDocument discovery in litigation is a way for parties to learn about the actual facts underlying a dispute.  Sometimes, however, parties intentionally destroy documents in advance of litigation (which is called “spoliation”).  Spoliation can have very serious consequences, including a court-imposed “adverse inference” instruction.  When a court gives such an instruction, it tells the jury that it may assume that documents deleted in advance of discovery would have been bad for the party who deleted them. 

This happened to Janet Murley, a former vice president of marketing for the Hallmark Group.  As a result, she is now hundreds of thousands of dollars poorer. Read More ›

The Inbox - January 18, 2013

This week in suits by suits, with a tip of the hat to some of our fellow bloggers:

Montana Supreme Court Sends Employee On Arbitration Expedition

Lewis And Clark ExpeditionThis week, our search for intriguing precedent has taken us all the way to the County of Lewis and Clark, Montana, and the case of Shannon Marsden. 

Marsden, an employee of Blue Cross Blue Shield Montana (“BCBSMT”), had an employment agreement with a clause that required arbitration of any dispute arising under it.  The agreement was for a two-year term, but provided that Marsden could be fired if the president of the company “believed that it would be in the best interest of BCBSMT.”

After BCBSMT terminated Marsden’s employment, she brought a claim under Montana’s Wrongful Discharge from Employment Act (“WDEA”), alleging that she was fired because she reported illegal rebates of insurance commissions. 

However, Marsden’s claim came with a catch. Read More ›

Does an Executive Have a Duty to Pull Punches In Personal Litigation Against the Company?

When a dispute between executive and company reaches the point of litigation, usually the executive’s title begins with “former.”  But not always.  Sometimes litigation proceeds while the executive remains an officer or director of the company.  How does the executive’s fiduciary duty to the company affect her litigation strategy and conduct? Read More ›

Not To Preach, But Religion In The Workplace Continues To Cause Disputes

Ah, religion. 

Whatever good it may – or may not – do for humankind is a subject for theological, philosophical, or old-fashioned barroom debate, not for this blog.  Nor do we opine on the multiple varieties of religious faith.   

We do, however, have to come across religion quite often when we’re writing about disputes between employers and employees.  Religion in the workplace makes things hotter than last year itself.  That heat, of course, leads to disputes that often find their way into courtrooms. 

When we write about religion, we’re really writing about the tension the exercise of religious beliefs or practices can cause in hiring and in the workplace.  Two recent cases showcase this tension and how religious belief in one case, and the lack of it in another, led to disputes.  Taken together, and setting the merits of the individual cases aside, the cases suggest conduct that employees and employers may want to avoid if they want to avoid these sorts of problems.  Read More ›

The Inbox

Here in Washington, we’re getting ready for the Presidential Inauguration next weekend.  But the news doesn’t stop: 

  • One Question Too Far:  An assistant VP at a bank in Texas alleges he was fired because he is gay.  Marty Edwards says in his lawsuit that he was passed over for promotion for several years, and when he questioned this he was told he didn’t fit the bank’s “image;” when he then asked specifically if his sexual orientation was a factor, he asserts, the bank asked for his resignation. 
  • Another Showcase Showdown: the saga surrounding pregnancy and models who work on TV game show The Price Is Right continues.  We’ve covered the allegations that the show’s producers illegally terminated the models here.  Now, fired model Shane Stirling is appealing a trial court’s dismissal of her suit, contending the judge got it wrong by holding she needed to be pregnant at the time she was fired in order to bring a case alleging pregnancy discrimination.  Stirling was fired soon after she returned to work from maternity leave; the producers say she was let go as part of a general reduction of the number of models on the show. 
  • From the “Is He Fired or Not” department: The former CEO of ShopSavvy has filed an interesting complaint in Texas state court, alleging that: 1) the company’s board improperly terminated him without cause; then 2) started negotiating with him to work in a different job; then 3) denied it had ever fired him; and finally 4) sent him a letter telling him he was fired.  This will be a neat one to watch, but it points out that it’s generally a good idea to be clear when communicating employment decisions and negotiating with executives.
  • What Brown Can’t Do For You:  UPS did not need to provide a pregnant employee with reasonable accommodations to enable her to keep her job, the federal 4th Circuit Court of Appeals has held, writing: “One may characterize the UPS policy as insufficiently charitable, but a lack of charity does not amount to discriminatory animus directed at a protected class of employees.”
  • Trying Again: Colleague Andrew Torrez wrote here about former Bloomberg executive Anthony Martinez’ suit against his employer, in which he alleged his termination violated the Americans with Disabilities Act.  The trial court held that Martinez’s claim was covered by the forum selection clause in his employment contract with Bloomberg, which required all disputes to be litigated in England – and Martinez’s claim couldn’t be brought there.  Now, Martinez has filed an appeal from that decision with the federal 2d Circuit.  We’ll keep our eyes on this one, because it raises interesting issues about the scope of these often-overlooked – but frequently important – clauses that mandate where an executive and an employer have to litigate any disputes between them. 
  • How About A Knuckle Sandwich: While it’s not the typical employment dispute we focus on, we couldn’t let the week close without mentioning this dispute between a Subway employee and a customer, who almost came to blows when the customer asked for ketchup on his cheesesteak sandwich.  Fascinating fact learned in our research – and we promise we never thought about this issue before -- but it appears Subway stores usually don’t even carry ketchup.  In any event, the employee has been fired by Subway.