The Inbox, May Day Edition

As a blog focused on employment issues, we’d be remiss if we didn’t at least note that the week that’s ending included May Day, which has long been known as International Workers’ Day.  Although this day’s somewhat curious history includes support from Marxists, Socialists, and the Catholic Church, it really got its start after a bloody bombing and riot in Chicago’s Haymarket Square.  

Fortunately for us at Suits-by-Suits, the employment disputes we deal with most – mainly executives and the companies that employ them – don’t lead to bloody confrontation, only (sometimes) litigation.  Though even litigation sometimes has its moments. 

Anyway, here’s what has come over that transom that has piqued our interest:  Read More ›

Rule #1: Don’t Mess With The Lawyers (Or Any Other Public-Sector Employees), Part 1

Some days when I look over the possible stories here, they’re filled with disputes between attorneys.  It almost makes me think that my fellow editors at Suits-by-Suits and me are the only attorneys that can get along.  Most of the time, at least. 

Because if you are, or have ever dealt with, Attornicus Americanus, then you know two things about our profession: 1) we don’t like to be told to be quiet when we have something important to say; and 2) even worse, though, is telling us we have to say something that we don’t want to say.  The two cases at issue in this two-part series feature lawyers working for the government who were in just those situations, and were fired.  We look at recent interesting developments in their claims for retaliation.  In passing, too, we’ll note what one of these lawyers was fired for saying, and what the other lawyer was fired for refusing to say. 

All in all, these are posts about whistleblowing and retaliation claims by public employees – and not just attorneys, either.  The public nature of the employment here is important because government employees keep some of their First Amendment rights to free speech when they go to work for the government.  The government employer, for its part, has some limited right to limit its employees’ speech in order to get its mission accomplished.  So before we turn to the two cases, a brief tour through the First Amendment rights of public employees is in order.  Read More ›

April 2013 Monthly Roundup

April showers bring May flowers, which, as the old joke goes, usually bring these. At ‎Suits by Suits, however, April brought a mix of interesting stories involving non-‎compete agreements, the mechanics of employment contracts, and all sorts of other ‎topics:‎

• Third Circuit Rejects Narrow Construction of Sarbanes-Oxley Whistleblower Claim
  Jason M. Knott | April 30, 2013
• Recent Breach of Contract Lawsuit Against Michael Keaton Illustrates Measuring Expectation Damages
  Ellen D. Marcus | April 24, 2013
• Why Didn't Rutgers Fire Basketball Coach Mike Rice for Cause?
  Ellen D. Marcus | April 23, 2013
• “You’ve Got…a  Non-Compete!”
  William A. Schreiner, Jr. | April 17, 2013
• Criminal Trial Begins in Case Against Former Executive Search Head
  Jason M. Knott | April 15, 2013
• California Continues to Go After Non-Competes
  P. Andrew Torrez | April 11, 2013
• California Strikes Down An Employee’s Agreement to Arbitrate on Substantive ‎Unconscionability Grounds (As “One-Sided”)‎
  P. Andrew Torrez | April 8, 2013
• Employment Agreement Tip of the Week No. 2: Once You Get It in Writing, Put Out Future Fires by Making Sure the Writing Is Clear
  William A. Schreiner, Jr. | April 5, 2013
• Employment Agreement Tip of the Week No. 1: Get It in Writing
  William A. Schreiner, Jr. | April 3, 2013

“You’ve got…a non-compete!”

Almost faster than a pop-up ad, AOL Inc. sued one of its former executives one day after he left the company for another pioneering Internet business – Yahoo, Inc. AOL, which also named Yahoo as a defendant, alleges that Edward Brody’s employment agreements with it prevent Yahoo from hiring him as the head of its Americas sales division. 

AOL’s pleading, filed Friday in New York State court, is not yet a full complaint laying out all of its allegations, but only a summons with notice – which under the rules governing New York’s courts can be used to begin a suit instead of a complaint, but only if it includes “a notice stating the nature of the action and the relief sought.”  The brief “notice” AOL included tells us a lot: Brody, AOL alleges, is bound by two employment agreements – one dated June 2012 and one dated November 2009.  The company – which you may recall started as an online game service for Commodore 64’s and similar early home computers – argues those agreements are enforceable against Brody (who until Thursday was the head of AOL Networks), and “prohibit Defendant Yahoo Inc. from employing and/or using his services during the notice and post-employment restricted periods” in them.   Read More ›

The Inbox, Cherry Blossom Edition

Here at SuitsbySuits Headquarters in Washington, the Nationals are blossoming and the fabled cherry trees are about to.  Here’s what’s caught our eye between Bryce Harper’s home runs and the crowds on the National Mall: 

Eric Murdock, who compiled the video showing former Rutgers’ basketball coach Mike Rice’s abusive behavior toward players, plans to sue Rutgers for wrongful termination.  According to Murdock’s lawyer, Rutgers did not renew Murdock’s contract as director of player personnel after he reported Rice’s behavior to the school last summer.

Not the best negotiating strategy: Workers at a greeting card company in France have kidnapped their boss in a dispute over pay.

Non-compete agreements aren’t just for office workers: a St. Petersburg, Florida chef has been enjoined from working in any restaurant in Pinellas County because she signed one.

And in another food-type note, the U.S. Second Circuit Court of Appeals has ruled in favor of biscuit maker Stella D’Oro and against the National Labor Relations Board, overturning the NLRB’s finding that the company’s failure to provide a copy of its financial statement to an employee union was an unfair labor practice.

Employment Agreement Tip of The Week No. 2: Once You Get It In Writing, Put Out Future Fires By Making Sure The Writing Is Clear

Time for our second tip of the week about employment agreements.  We’re looking at things many of us think we should do about employment agreements but that, oddly enough, aren’t being done – at least in the two cases we profile this week, each of which made it to a state high court.    

Our first tip was straightforward: if you have an employment agreement, or think you have one but aren’t sure – get it in writing.  

Our second tip follows the first.  Once you’ve reduced your employment agreement to writing, make sure it’s clear – or at least, as clear as possible.  Clarity will reduce the time and money you’ll spend if you get into a dispute over the agreement.  Read More ›

Employment Agreement Tip of The Week No. 1: Get It In Writing

Whether you’re an executive or a hiring manager, here’s a tip: if you think you have an employment agreement, or if you want to have an employment agreement, get the agreement in writing. 

Sounds basic, right?  Most of us know that.  But a recent decision from New York’s highest court in Gelman v. Buehler suggests that not everyone does, and illustrates the consequences of not having a written agreement.  Read More ›

March 2013 Monthly Roundup

For us here in the greater Baltimore/Washington metropolitan area, March was true to form – or at least, the Farmer’s Almanac – and came in like a lion (with city-closing snow and everything!) but has gone out like a lamb, as today is beautifully sunny with highs in the mid-60s.

As the Farmer’s Almanac tells us, that saying was rooted in the ancient belief that weather would seek a balance, and that good events would cancel out bad ones.  That sense of balance held true for your Suits by Suits editors this month as well, as Ellen Marcus documented the unique ability of shareholders to protest “golden parachutes” for companies emerging from Chapter 11 bankruptcy – as contrasted with their general inability to do much else.  Bill Schreiner explained how the average executive can protect herself from incurring certain legal expenses through directors & officers’ (“D&O”) insurance policies, while noting the limits of those D&O policies especially in high-profile cases like former Penn State coach Jerry Sandusky.  Andrew Torrez continued to document the push-and-pull in the legislative arena over whether and to what extent courts should uphold covenants not to compete contained in employment contracts, and warned Gov. Deval Patrick that the proposed new law in Massachusetts may not do what he expects it to do.  And Jason Knott warned us that only 2% of Sarbanes-Oxley whistleblowers succeed on their claims, while walking us through a comprehensive recent decision by the Second Circuit that maps out how future whistleblowers can prove the elements necessary to assert their cases.

A full list of all of our articles from March follows.  And remember, Suits by Suits is now on Twitter – and that’s no April Fools!

• Shareholders Can Have Their Say on Executive Pay, But Not Much Else
  Ellen D. Marcus | March 28, 2013
• Tom Horton's Severance is Probably in the Golden Parachute Bag if the Court Applies the Business Judgment Rule Rather than Section 503(c) of the Bankruptcy Code
  Ellen D. Marcus | March 26, 2013
• How Does that Burden of Proof Work Again? The Second Circuit’s Recent Sarbanes-Oxley Decision Explains
  Jason M. Knott | March 20, 2013
• You’ve Got (Unprivileged) Mail: Court Rules that Prosecutors Can Use E-mail Sent by Personal Attorney to Employee’s Work Account
  Jason M. Knott | March 18, 2013
• More on Covenants Not to Compete: A Proposed Massachusetts Law Gets a Big Endorsement
  P. Andrew Torrez | March 13, 2013
• The Basics: "Hacking," the Computer Fraud and Abuse Act, and You 
  P. Andrew Torrez | March 11, 2013
• Federal Court of Appeals Rejects Sarbanes-Oxley Whistleblower’s Challenge to Department of Labor Ruling
  Jason M. Knott | March 7, 2013
• Everything Has a Limit, Jerry Sandusky Edition – Part 2
  William A. Schreiner, Jr. | March 7, 2013
• Everything Has a Limit, Jerry Sandusky Edition – Part 1
  William A. Schreiner, Jr. | March 7, 2013
• Wow! A $56 Million Golden Parachute for the Heinz CEO. Well, that Depends on What You Mean by "Golden Parachute."
  Ellen D. Marcus | March 6, 2013
• Groupon CEO's Departure Memo: Watch What You Say, Even if You Say it Nicely
  William A. Schreiner, Jr. | March 4, 2013

The Inbox, Snowquester Edition

Here at the SuitsbySuits Tower in Washington, D.C., we’re closing the week of the Snowquester that Wasn’t, a snowstorm that could have given us a large thumping of snow but turned out to be…well, more disappointing than a playoff loss by you-know-who.  The chatter about the storm has, though, led to a rare mea culpa by a prominent weather blog and pretty much kicked off the Virginia governor’s race in a dispute over one candidate’s tweet about safety in the snow. 

In any event, things other than a poem-inducing non-blizzard happened this week, and here are the highlights: Read More ›

Everything Has A Limit, Jerry Sandusky Edition – Part 2‎

In Part One of this series, we gave the background to the insurance coverage dispute between Jerry Sandusky and Federal Insurance Company, which wrote D&O and employment practices liability insurance to The Second Mile, a charity Sandusky founded.  I explained how Sandusky was seeking coverage under those policies for the criminal and civil cases against him, and how, in response, Federal filed suit, arguing that it did not have to indemnify or defend him because he was not “acting in his capacity” as an executive of Second Mile when the alleged sexual abuse happened. 

Last week, the court held that Federal did not have a duty to reimburse Sandusky’s defense costs, as we’ll explain below.  But first, let me get on my insurance-lawyer soapbox and explain a couple of key terms.  Insurance in its most common form (and certainly the policies Federal wrote here) does two things: 1) indemnify someone, or some business, for judgments or settlements against them in civil cases, and 2) defend someone, or some business – or pay defense costs  in civil (and, in rare cases, criminal) matters.  Indemnity and defense are two distinct obligations that the insurer has.  Read More ›