Tour De Fraud - When Finally Settling Your Dispute May Not Be Finally Settling Your Dispute

Since Lance Armstrong confessed to Oprah last week that he used performance enhancing drugs, speculation about the legal consequences came faster than Dave Stoller drafting the 18-wheeler in Breaking Away.  Some of the speculation is about SCA Promotions’ demand that Armstrong return the $7.5 million that it paid him to settle a lawsuit.  Armstrong brought the lawsuit after SCA (an insurer of a sponsor) refused to pay him bonuses for his Tour de France victories, citing doping allegations.  Armstrong’s lawyer has said that SCA is out of luck:  “When SCA decided to settle the case, it settled the entire matter forever. No backs. No re-dos. No do-overs. SCA knowingly and independently waived any right to make further claims to any of the money it paid.” Read More ›

When Suits By Suits Go Political, Part II: Jim Greer vs. the Republican Party of Florida

Stop us if you’ve heard this before, but we’re still not a political blog.

Nevertheless, when the former Chairman of the Republican Party of Florida, Jim Greer, sues the Republican Party, Florida State Senate President Mike Haridopolous and Florida State Sen. John Thrasher for unpaid severance pay and $5 million in damages following his 2010 resignation – and the Republican Party replies with allegations that Greer engaged in fraud and money laundering, funneling $300,000 from the Republican Party to his own pockets, well, we can’t resist.

Twice, in fact.  Back in September we advised you that Greer was filing suit, and that his lawyer was confident of victory.  (“They’re [the Republican Party] dead. … Jim Greer will win the criminal case and Jim Greer will win the civil case.”)

Two days ago, the Republican Party struck back, moving to dismiss the portion of the lawsuit that includes the individual defendants, Sens. Haridopolous and Thrasher.  But the Court rejected that argument, permitting Greer's lawsuit to go forward against both the Republican Party and the state senators, apparently on the theory that the individual legislators were acting as individuals and not on behalf of the Republican Party when they allegedly offered Greer $124,000 to resign back in 2010.

(Greer calls the offer a “severance payment”; media sources have not been so generous in their characterization.)

Although most of us don’t face the same sort of political issues that Jim Greer and the Republican Party of Florida do, many employers do face similar risks when they contemplate firing a prominent, high-level employee.  For those employers, the “nightmare scenario” is that the employee will run down his or her former employer in the press, or possibly air dirty laundry that the employer would rather not have out in the open. 

If you’re thinking that Jim Greer used that exact same strategy, you would be right.  In his deposition – leaked to the press, of course – Greer called Republican Party officials “whack-a-do, right-wing crazies” not-so-secretly plotting to suppress minority votes in Florida.  (The full transcript of Greer’s deposition can be found here.)

Often times, employers chafe at the idea of paying a high-level employee to go away; after all, they’ve already decided this person isn’t worth keeping.  How can they possibly be worth paying?  The practical reality is that sometimes the benefits of an amicable settlement – including a general release of all claims and non-disparagement and non-disclosure agreements – can leave the employer better off than simply rolling the dice.

We’re betting that the Republican Party of Florida wishes it had just paid Greer back in 2010.

Postscript:  A grand jury indicted Greer on multiple fraud counts in 2010 and his criminal trial is scheduled for February, 2013.

The Inbox

The pre-Labor Day highlights of Suits by Suits:

• A producer of Martin Scorcese’s next film, The Wolf of Wall Street, filed a lawsuit against the production company for reducing her role.  The New York Post reports that Alexandra Milchan alleges that she was owed $700,000 in fixed payments and the right to produce the film.  The article includes a photo of Leo DiCaprio wearing … you guessed it … a suit.

General Release = Major Issue

For a high-level executive leaving a company under less-than-ideal conditions, it’s as common as handing in keys to security and shutting down the computer for the last time.  In exchange for a severance payment, the executive is asked to sign the typical general release: “I hereby release my employer from any claims, liabilities, demands, or causes of action . . .”

Unsurprisingly, once an employee signs a general release, if he later sues, he is likely to face a quick motion to dismiss.   Read More ›