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Showing 92 posts in Breach of Contract.

Top Issues in Executive Disputes to Watch in 2016

We’ve counted down our top posts from 2015, from American Apparel to Dr. Robert Schuller. Now, we look at the issues in executive disputes that are likely to draw the most attention in 2016. Read More ›

Suits by Suits’ 2015 Greatest Hits

The turn of the calendar is always a good time to reflect on what has come before and preview what lies ahead. In this post, we count down our most popular posts of 2015 about executive disputes. Later, we’ll look at what to expect in 2016. Read More ›

The Trojan War: After Alcohol-Related Firing, Coach Steve Sarkisian Sues USC

When the 2015 college football season started, Steve Sarkisian was a rising star in the coaching firmament. He had led the University of Washington Huskies and his current team, the University of Southern California Trojans, to winning records and bowl games.

In late August, however, reports surfaced that Sarkisian had behaved inappropriately at a booster event, the Salute to Troy. And by mid-October, USC had terminated Sarkisian “for cause,” with athletic director Pat Haden explaining that Sarkisian’s use of alcohol had impaired his performance of his job.

This week, Sarkisian struck back, filing a 14-count complaint against USC in Los Angeles Superior Court. Read More ›

“Getting It in Writing” Is Not the End: Executives Should Check Agreements Carefully and Follow Up

It’s an obvious best practice to put the terms of an employment agreement in writing. Equally obvious is the notion that the writing should be complete, whether in a single document or with reference to other items, such as employee manuals or company-wide incentive plans.

However, it’s not always obvious which documents make up an employment agreement.

Consider the recent decision issued by the United States District Court for the District of California in the case of Lenk v. Monolithic Power Systems, Inc. Read More ›

Third Circuit Derails “Executive Fast Track” Case

A contract between an executive and an employer does not always have to be in writing.

Sometimes, employees can enforce oral promises. Agreements can also be implied based on the parties’ conduct, even when no one made a promise, either in writing or orally.

But contracts that aren’t in writing can be much harder to enforce, as the Third Circuit’s recent decision in Steudtner v. Duane Reade, Inc. shows. Read More ›

Boilerplate Terms in Employment Agreements May Trap the Unwary

In many respects, employees with employment agreements seem to have made it to the corporate “Promised Land.”

Through skill and hard work, these employees have distinguished themselves enough to merit individualized attention to the various types of compensation they will receive. However, these agreements may also contain land mines that spring into action when the relationship between the employee and the employer sours. Read More ›

Court Rejects American Apparel Founder’s Bid for Advancement and Indemnification

When a company sues an executive, one question is who will pay the legal bills. As we covered earlier this year, that’s been an issue in Dov Charney’s ongoing legal battle with his former employer, American Apparel. Specifically, after American Apparel sued Charney for violating their standstill agreement by getting involved in shareholder suits and commenting to the press, Charney sued American Apparel in Delaware for indemnification and advancement. He claimed that the suit was brought “by reason of the fact” that he had been CEO, and thus fell within the indemnification provisions in various corporate documents. Read More ›

Non-Solicitation Clauses: They’re Up to You, New York

National employers sometimes include choice-of-law provisions in their employment agreements, selecting one particular state’s law even for employees who don’t work in that state.  For example, a company based in Massachusetts might ask its California employees to sign agreements selecting Massachusetts law.  Applying one state’s law to all of the employer’s relationships can make outcomes more predictable, especially when the employer knows that law well.

But not always, as the New York Court of Appeals held earlier this month in Brown & Brown, Inc. v. Johnson.  In Brown & Brown, the Court of Appeals refused to apply an employment agreement’s selection of Florida law, holding that New York law should determine whether a customer non-solicitation provision in that same agreement was enforceable.  Read More ›

In Reversal of Fortune, Court of Appeals Finds Ambiguity in Executive’s General Release

Last May, we covered a decision by a Michigan federal court that torpedoed Debourah Mattatall’s claims against her former employee, Transdermal Corporation.  Now, thanks to a recent decision by the U.S. Court of Appeals for the Sixth Circuit, Mattatall’s claims have been brought back to life.

To briefly recap the facts, Mattatall used to own a company called DPM Therapeutics Corporation.  She sold it to Transdermal and entered into a Stock Purchase Agreement and Employment Agreement with that company.  According to Mattatall, Transdermal didn’t comply with its obligations, and she sued it in federal court.  But the court quickly granted summary judgment, finding that Mattatall gave up her claims in a settlement agreement that resolved other litigation against her.

In that litigation, DPM’s minority shareholders challenged the sale to Transdermal, and Transdermal countersued those shareholders.  The parties to the litigation, including Mattatall, resolved the dispute and entered into a settlement agreement and a general release.  The release stated that “Transdermal, DPM, [another controlling owner], and Mattatall and each [minority shareholder] … release[d], waive[d] and forever discharge[d] each other” from any claims arising before the agreement was signed.  In Mattatall’s subsequent lawsuit against her employer, Transdermal, the district court ruled that this language released all claims that any party to the agreement had against any other party – even though Transdermal and Mattatall were on the same side in the shareholder litigation, and Transdermal reassured Mattatall that she wasn’t releasing her unrelated claims against it before she signed.  Because her claims against Transdermal fell within the “unambiguous” and “broadly worded” terms of the release, this evidence was irrelevant, and Mattatall was out of court. Read More ›

Former LSU Assistant Coach Sues School to Avoid $400,000 Buyout

LSU is used to battling with its Southeastern Conference (SEC) foes on the gridiron.  Now, it’s fighting in court with a former assistant who jumped ship to conference rival Texas A&M. 

John Chavis, LSU’s ballyhooed former defensive coordinator, left LSU for A&M at the beginning of this year, sparking headlines about “winning big” at his new home in College Station.  But storm clouds were brewing – LSU’s athletic director, Joe Alleva, said that he expected Chavis to comply with a $400,000 contractual buyout. 

On February 27, Chavis sued LSU in Texas state court, seeking to avoid the buyout.  He named A&M as a defendant as well, but only as an “indispensable party,” reported Jerry Hinnen of cbssports.com.  The Associated Press reported that A&M agreed to pay the buyout for Chavis if he was found to owe it.

LSU, seeking a home field against Chavis, quickly filed a separate case against him in Baton Rouge, claiming that it is entitled to receive the buyout money.

 Chavis’s contract reportedly said that if Chavis left in the first 11 months of his contract, before January 31, 2015, he would have to pay the buyout.   The sequence of events appears to be that Chavis gave a required 30-day notice on January 5 that he was resigning and terminating his contract.  Chavis says that he left LSU by February 4 – after the January 31 end to the buyout period – and didn’t join the Aggie payroll until February 13.  Read More ›