RSSAdd blog to your RSS feed

Follow Us

Twitter LinkedIn

Contributing Editors

© 2014 Zuckerman Spaeder LLP
Photo of Suits by Suits
Ellen D. Marcus
Email | 202.778.1815

Ellen D. Marcus is a partner in Zuckerman Spaeder’s Washington, DC office, who represents clients in civil litigation throughout the country. Her clients have included CEOs, CFOs, publicly-traded companies, closely-held family businesses, consumers, migrant workers, lawyers and law firms.

Showing 81 posts by Ellen D. Marcus.

The Inbox – April 18, 2014 – The Easter Bunny Edition

Easter bunny

    • A Seattle judge has denied Relator.Com operator Move Inc.’s motion to prevent Errol Samuelson from working for its rival Zillow as Chief Industry Development Officer. Move Inc. argued that Mr. Samuelson will inevitably disclose trade secrets that he allegedly took from Move Inc. in his work for Zillow and therefore should not be allowed to work there. The theory of inevitable disclosure of trade secrets is one we have examined before.
    • WaPo’s Jenna McGregor explains why Henrique de Castro’s severance pay for 15 months at Yahoo totals $58 million; it has to do with high stock prices.  We considered earlier how de Castro’s contract may have required Yahoo to pay him severance despite performance issues.
    • Forbes blogger Todd Hixon welcomes efforts in Massachusetts to abolish non-competes because, in his view, non-competes hurt innovation. The differences in state laws on non-competes and shifting attitudes towards them have been a major focus of ours here at Suits by Suits.
    • The Florida Supreme Court ruled yesterday that the Florida Civil Rights Act prohibits discrimination in the workplace for pregnancy, even though the Act does not explicitly say anything about pregnancy. The high court reasoned in a 6-1 decision that the Act’s prohibition against gender discrimination covers discrimination based on pregnancy. Peguy Delva claims in the case that real estate developer Continental Group denied her extra shifts and did not schedule her for work after she returned from maternity leave. Federal law expressly prohibits pregnancy discrimination.

Executive in the Middle – Texas Monthly and The New York Times Company Duke It Out in Court over Top Editor Jake Silverstein

Newspaper Tempers FlareYou can read about it in the Times:  the publisher of Texas Monthly sued The New York Times Companylast week over Jake Silverstein leaving his post as editor-in-chief of Texas Monthly to be editor of The New York Times Magazine.  Silverstein had a three-year contract with the Texas publisher that was supposed to run through February 2015.  The publisher claims that The New York Times Company tortiously interfered with that contract, causing Silverstein to break it.  This is a common scenario for sought-after executives when they switch companies:  the companies fight in court over them but not against them.  The executive in the middle may feel like she dodged a bullet by not being named as a defendant in the lawsuit.  In fact, it is not so simple. 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 ›

Vanterpool v. Cuccinelli: Threading the Needle to Preserve a Free Speech Claim Against a Government Employer without Admitting to Lying Earlier About Who Spoke

Needle ThreadingYesterday, we reviewed a recent decision by a federal court in Richmond in the case of Vanterpool v. Cuccinelli (yes that one), and when firing a government employee for speech or political affiliation may be okay under the First Amendment.  The answer is that it may be okay if the employee is in a policymaking position.  The court’s decision spells out why and what it means to have such a position.  The case is also a helpful reminder that staking out one position in litigation may undermine another. 

In her first complaint, Vanterpool apparently did not want to say that she posted the comment criticizing Cuccinelli on the Washington Post because she had denied doing so when she was confronted about the comment by one of Cuccinelli’s deputies, Charles E. James, Jr., who was also a defendant in the case.  James later questioned Vanterpool’s credibility and asked her to resign or be terminated.  If Vanterpool alleged in the complaint that she personally posted the comment, then that could have bolstered a defense by Cuccinelli and James that she wasn’t fired for speaking freely but for being dishonest.     Read More ›

Vanterpool v. Cuccinelli (yes that Cuccinelli) Sheds Light on Political Patronage Dismissals

Earlier this month, a federal court in Richmond dismissed the lawsuit  of a lawyer named Samantha Vanterpool who worked in the Virginia Office of Attorney General when Republican Ken Cuccinelli was Virginia’s AG and was running to be governor.  (Democrat Terry McAuliffe won last November in a race that made national headlines.)  Vanterpool claimed that she was fired on the basis of her political affiliation in violation of the First Amendment. 

Vanterpool is a Republican but apparently not a Cuccinelli fan.  She was fired after she allegedly posted a comment to a May 2012 Washington Post story about Bill Bolling, who was then challenging Cuccinelli for the Republican nomination.  You can still see the comment (from “bzbzsammy”), which accuses “Cuccinelli of promoting Cuccinelli” while “Bolling is helping the GOP,” and of “NEVER [being] in the AG’s office and solely us[ing] the position for self promotion.”   Read More ›

The Inbox - January 24, 2014

  • woman refusing cashIBM CEO Virginia “Ginni” Rometty said on Tuesday that she is passing up her annual bonus after the company missed its quarterly earnings expectations and its annual revenues declined in 2013.
  • Meanwhile, former Yahoo COO Henrique de Castro’s severance, with an estimated value of $60 million, is being called one of the largest golden parachutes ever for a fired executive.   See our post earlier this week explaining how employment agreements can lead to severance payments even to executives who were asked to leave for poor performance.
  • We don’t know whether de Castro got to take his personal data with him.  The Wall Street Journal reported this week that 21 percent of companies remotely wipe clean data from phones and tablets used by employees for work activities when an employee quits or is fired, even where the employee owns the device and even where the employee stored personal data on the device.
  • The U.S. Court of Appeals for the Third Circuit (see Erica Plaso v. IJKG opinion) affirmed the judgment against a consultant who sued the hospital where she had worked for a hostile working environment, claiming that she was sexually harassed on the job.  The Third Circuit agreed with the trial court that the hospital wasn’t the consultant’s employer for purposes of Title VII, and that her employer was the consulting company that contracted with the hospital to provide services.     

Conditioning Severance Payments on Releasing the Company - Another Lesson from Family Dollar Stores' Recent Firing of Its COO

Dollar in Shopping CartYou may have been left with the impression from our post on Tuesday that Family Dollar Stores is getting a raw deal because the company has to pay former COO Mike Bloom $4.8 million after letting him go for what it saw as poor performance. As we explained, this may be counterintuitive, but it’s consistent with the severance provisions of Bloom’s employment agreement. Besides complying with its contractual obligations, however, the company is getting something in return for the severance: a release from Bloom.

Bloom’s employment agreement, which is typical of executive employment agreements, provides that, upon his termination, the Company’s obligation to pay him severance is conditioned on Bloom "deliver[ing] to the Company a fully executed release agreement . . . which shall fully and irrevocably release and discharge the Company . . . from any and all claims . . . ."

This provision of Bloom’s employment agreement illustrates a best practice for companies when they are contemplating severance provisions in employment agreements at the time of hiring, or even standalone severance agreements that are negotiated at the end of employment: don’t agree to pay severance without getting a release from the executive in return. That way, while it may be painful to write that severance check, at least the company can know that it should not have any future trouble from the executive, the break is clean and the company and executive can move on to whatever’s next. For executives’ part, to the extent that they have the bargaining leverage, they should also insist that any release be mutual – that is, that, just as the executive releases the company from any claims, the company releases the executive from any claims. That way, the executive will also be able to move on without having to look back.

Why the COOs of Yahoo and Family Dollar Stores Have Been Fired for Poor Performance But Will Get Millions in Severance - Further Adventures in "With" and "Without Cause" Terminations under Executive Employment Agreements

yahooLast week, Yahoo’s Marissa Mayer fired COO Henrique de Castro, reportedly because she was not satisfied with his job performance. By some estimates, de Castro will receive severance exceeding $60 million after only 15 months on the job. Also last week, Family Dollar Stores let go COO Mike Bloom because the company was not happy with his performance, and apparently was not moved by Bloom’s Undercover Boss gambit. Bloom is set to receive $4.8 million in severance after slightly more than two years on the job.

What gives? How is it that these former executives are receiving large severance payments after they were asked to leave for poor performance on the job? The definition of "cause" in their severance agreements is what gives – a topic we explored recently here at Suits by Suits in connection with the dispute over former iGate CEO Phaneesh Murthy’s termination. In the iGate case, the company contends that it terminated Murthy for cause and thus owes him no severance. Murthy’s employment agreement provides that he does not get severance in the event of a "with cause" termination, and that "cause" includes violating company policy. The company contends that Murthy’s failure to report his romantic relationship with an employee to the Board was "cause" for his termination because it violated company policy.

In the Yahoo and Family Dollar Store cases, assuming that de Castro and Bloom were let got for poor performance, unless poor performance is "cause" under their employment agreements, they will reap the severance benefits provided for in their agreements for "without cause" terminations. Read More ›

Happy New Year from Suits by Suits

Happy 2014!  We'll be resuming our usual schedule of bringing you cutting-edge insights into legal disputes between high-level employees and their companies next week.  Meanwhiile, for those of you who found yourselves watching the holiday movie classics for the umpteenth time last week (and loving it), you may appreciate revisiting these Suits by Suits oldies-but-goodies: 

Cratchit v. Scrooge - Holiday Adventures in Employment Law

Cratchit v. Scrooge - Further Holiday Adventures in Employment Law

It's a Wonderful Life . . . Assuming George Bailey and Uncle Billy Can Get the Legal Bills Paid

It's A Wonderful Life...Or It Will Be If George And Uncle Billy Can Get Their Legal Fees Paid, Part 2