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Showing 6 posts from November 2014.

Disgruntled Employee’s Alleged Parting Shot Leads to Federal Indictment

Computer VirusIt's no secret on this blog that when   employment relationships go sour,   criminal charges can be one potential     result.  Now we have another example, by way of the recent indictment of Arturas Samoilovas.  

According to the indictment, filed in Ohio federal district court, Samoilovas worked as a contract employee for Eaton Corporation as a financial analyst.  In April 2014, he applied for several full-time positions, but was told that he didn’t get the jobs.  Unhappy about the rejections, Samoilovas “accessed the Eaton Corporation’s computer system,” inserting “certain malicious computer codes … into six … financial spreadsheets.”  If executed, these codes would have resulted in deleted files.  In other words, they were malwareRead More ›

You’re In the Zone… Of A Massive Punitive Damages Verdict for a Pregnant Manager

On Monday, AutoZone found itself on the wrong end of a $185 million verdict in favor of a former store manager, Rosario Juarez.  Yes, you read that right.  $185 million.  This stunning verdict appears to have been the result of Juarez’s allegations of discrimination and retaliatory discharge, combined with an insider turned witness who provided extremely damaging testimony against the auto parts retailer.

In her complaint, Juarez alleged that AutoZone had a “glass ceiling” for women employees, which it kept in place through a hidden promotion process where open positions were not posted.  According to Juarez, she succeeded in cracking the glass ceiling, securing a store manager position, but when she became pregnant, she was treated differently by her district manager.  After giving birth, she complained about the unfair treatment and was soon demoted by the manager, who told her that she could not be a mother and handle her job.  Later, she was terminated as the result of a loss prevention inquiry, in which she refused to participate in a “Q&A” statement about a theft at the store.  Juarez alleged that the loss prevention department’s request for a statement was a pretext to fire her. 

We’ve spent a lot of time on this blog discussing allegations of pregnancy discrimination like these (see, for example, here, here and here).  The short of it is that a company can’t treat pregnant women, or women who have  given birth, differently than it treats other employees.  But we’ve never covered a verdict for pregnancy discrimination that looked more like a Powerball win than a litigation result. Read More ›

The Inbox - Love Me Tinder

If you find yourself in the digital dating scene (or the market for highly-valued start-ups for that matter), you are probably familiar with Tinder, the dating app that allows users to identify potential dates with an easy swipe of a finger on a smartphone.  Last July, Whitney Wolfe, Tinder’s former VP of marketing, sued the company, alleging that she was sexually harassed by Tinder’s fellow co-founders, CMO Justin Mateen and CEO Sean Rad. The suit primarily focused on the ugly breakup between Mateen and Wolfe, and Mateen ultimately resigned in September, after Wolfe’s suit revealed his “private messages to [her] containing inappropriate content.”  Now, the aftershocks of Wolfe’s suit have spread to impact Rad’s employment as well.  As discussed in this lengthy Forbes piece, the company’s majority owner, IAC (InterActivCorp), decided to oust Rad as CEO early this month, in part due to his involvement in the Wolfe-Mateen brouhaha.   IAC says it still wants Rad to stay involved and focus on Tinder’s business, so for now, it’s not undoing the “match” between Rad and the company he founded.

Consumers of taxi and black car services have witnessed a sea change in options over the past few years. Thanks to internet-based car-summoning applications, customers are empowered with a range of efficient, cost-conscious alternatives to standing on the corner, arms waving, eyeing every yellow vehicle that approaches.  Now, Lyft, one of the leading entrants into this new market, is squabbling in court with an employee who left it to join the other market leader, Uber.  According to Courthouse News Service, Lyft recently sued its former COO, Travis VanderZanden, alleging that he breached his employment contract when he left the company to become Uber’s new VP of international growth.  Lyft says that VanderZanden stole 98,000 pages of confidential financial projections and forecasts, business strategies, marketing plans, and international growth documents. It also accuses VanderZanden of soliciting Lyft’s employees to join Uber, including Lyft’s former VP of operations. Meanwhile, just this week, Uber is rumored to be in talks with investors to raise significant capital toward international expansion. It seems obvious that Uber is focusing on growing its international market share, and perhaps time will tell if Lyft can prove a misappropriation of its own confidential international strategy. Read More ›

Fired for Taking the Fifth: Part 1 – The Private Sector Employee

Recently, in a government investigation by the civil division of a United States Attorney’s Office, an employee of a private company was deposed pursuant to a Civil Investigative Demand (CID).  The employee, on the advice of counsel, refused to answer questions on certain topics and invoked the Fifth Amendment right against compulsory self-incrimination (she “took the Fifth” in common shorthand).  Several days later, she was fired by her employer for taking the Fifth.  (The employer claimed that it wanted to show cooperation with the government’s investigation and taking the Fifth is viewed as being non-cooperative.)  When I recounted this story to my non-lawyer fiancée, he was outraged and wondered how could her employer do such a thing? Wasn’t this retaliation? Didn’t she have a clear wrongful termination claim against her employer? Good questions. While most, if not all, states (and the federal government) have enacted provisions to protect employees who blow the whistle on illegal activity from retaliatory discharge, is there any protection from discharge for an  employee of a private company who chooses to keep mum to protect herself?

The short answer is no.

In our Bill of Rights, No. 5, it is written that “[n]o person … shall be compelled in any criminal case to be a witness against himself.” Although the text limits the right to stay silent in a criminal case, it is generally accepted that a witness may assert the right in any context in which the witness fears his/her statements may later be used against him/her. Thus, as an American I have the right to refuse to answer questions or offer information which I fear could incriminate me. [A full discussion of the scope of Fifth Amendment protection is beyond the scope of this post.  To learn more about the Fifth Amendment protections against self-incrimination, I refer the reader to The Privilege of Silence, authored by my fellow Zuckerman Spaeder attorneys Steven M. Salky and Paul B. Hynes and available here.] Read More ›

Can A Whistleblower Break the “Law” to Blow the Whistle?

A whistleblower generally shouldn’t break the law in order to prove his claims.  Indeed, the Whistleblowers Protection Blog says that this is a “basic rule,” and cautions that an employee who breaks the law while whistleblowing in order to get evidence will suffer from attacks on his credibility and may even be referred for criminal prosecution.  However, the parameters of this rule aren’t always so easy to follow, as the Supreme Court heard last week in the case of Department of Homeland Security v. MacLean

The MacLean case arose from a warning and text message.  In July 2003, the Transportation Security Administration (TSA) warned MacLean, a former air marshal, and his colleagues about a potential plot to hijack U.S. airliners.  Soon after, however, the TSA sent the marshals an unencrypted text message, canceling all missions on overnight flights from Las Vegas.  MacLean was concerned about this reduction in security, and eventually told MSNBC about it.  The TSA then issued an order stating that the text message was sensitive security information (SSI).  When it found out that MacLean was the one who disclosed the message to MSNBC, it fired him. 

MacLean didn’t take this while reclining; he challenged his dismissal before the Merit Systems Protection Board.  But he lost.  The Board decided that TSA didn’t violate the federal Whistleblower Protection Act by firing MacLean for his disclosure, because MacLean’s disclosure violated a TSA regulation that prohibited employees from publicly disclosing SSI.        Read More ›

Complaint Provides Further Details About Former CFO’s Defamation Suit Against Walgreen

When we first examined Wade Miquelon’s suit against his former employer, Walgreen, we didn’t have access to his complaint.  Now we do.  The complaint sheds more light on Miquelon’s allegations, helping to explain why they are causing a spiral of problems for the drug company.

As you may recall from our last article on the case, Miquelon alleges that Walgreen defamed him (in layman’s terms, lied) when it told the Wall Street Journal and investors that he had botched the earnings forecast for the 2014 fiscal year, and that his finance unit was “weak” with “lax controls.”  According to Miquelon’s complaint, Walgreen executives made these negative statements for an entirely different reason: they had an “unchecked desire” to push Walgreen’s merger with Alliance Boots to completion.  Miquelon alleges that an activist investor had threatened him for being “too conservative,” and that rather than standing up for him, the company’s CEO and its largest shareholder decided to disparage him in order to “deflect investor disappointment” and push through the merger.

Miquelon’s complaint is also somewhat of a public relations document, because it praises his work and goes into his interactions with the CEO and shareholder in great detail.  It even says that Miquelon was next in line to be CEO (although the complaint also says he turned down that chance, instead deciding to move on).  As to the allegedly botched earnings forecast, the complaint says that Miquelon recognized the problem well in advance of the call in which the company announced it was withdrawing its earnings goal.  It also says that he was pressured at the same time by the company’s CEO to raise his estimate of earnings per share that would result from the Alliance Boots merger.  The most explosive allegation on this front is that the CEO told him that he had “no choice” but to approve a $6.00 earnings per share estimate, rather than a lower one that would hurt the merger. Read More ›