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- Five Takeaways from the Second Circuit’s Dodd-Frank Decision in Liu v. Siemens
- Part 3 - Anatomy of a Big-Time Non-Compete Dispute
- Part 2 - Anatomy of a Big-Time Non-Compete Dispute
- The Inbox - August 8, 2014
- Anatomy of a Big-Time Noncompete Dispute
- Non-Compete That’s Here Today But Gone Tomorrow – Beware The Unintended Consequences Of An “Integration Clause”
- The Inbox - August 1, 2014
- Dov Charney’s Pants And A Sexually Charged Workplace – What Is A Company Seeking To Minimize Litigation Risk To Do?
- Virginia Tech Professor Argues That University Officials Violated His Constitutional Rights When They "Demoted" Him
- The Inbox: July 18, 2014
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Showing 20 posts in Summary Judgment.
If you’re confused by this headline, you’re not alone. But you can’t be as confused as Debourah Mattatall must be after losing her lawsuit against her former employer, Transdermal Corporation.
The origin of Mattatall’s lawsuit, appropriately enough, was another lawsuit. Mattatall used to own a company called DPM Therapeutics Corporation. DPM’s minority shareholders sued her to prevent her from selling the company to Transdermal. She went ahead with the sale anyway, and signed a Stock Purchase Agreement and Employment Agreement with Transdermal. According to Mattatall, Transdermal didn’t fulfill its obligations under those deals, citing a lack of funds.
After Mattatall’s sale to Transdermal was final, Transdermal brought its own suit against the DPM minority shareholders. All parties, including Mattatall, eventually settled the two shareholder cases. Before agreeing to the settlement, Mattatall complained about the money that she was owed under the Stock Purchase Agreement and Employment Agreement. Transdermal’s counsel assured her that her claims were “wholly extraneous” and she would be “free to pursue” her claims against Transdermal.
In the written settlement, however, everyone released the claims that they “had, has or hereafter may have” against any other party. Thus, even though Transdermal hadn’t sued Mattatall, according to the language of the release, she was giving up her claims against it. The settlement also included a “merger clause,” under which all prior understandings were “merged” and “supersede[d].” Read More ›
E-mailing Work Documents to Your Personal Account Looks Fishy, Says NY Appeals Court in New Non-Compete Opinion
Non-lawyers often wonder why folks in our profession spend so much time and money poring over the documents and e-mails each side usually has to produce in litigation. Sometimes, these document reviews are the legal equivalent of looking for the proverbial needle in a haystack.
And sometimes, you find the proverbial needle – or needles. And when you do, and the success or failure of the case turns on that e-mail, or set of e-mails, then the time and money spent on the search for those things turns out to have been a wise and necessary investment.
Take the case of TBA Global, LLC v. Proscenium Events, LLC. TBA is an event planning company that “produces live event programs and marketing presentations for companies and branded products.” In the course of its work, it hired three senior employees – Santoro, Shearon, and Cavanaugh. While the exact terms of their agreements differ from each other, all three signed non-compete agreements with TBA that provided that if they ever left the company, they would not “directly or indirectly, communicate with clients or prospective clients” of the company for a period of time (one year for two of the executives, and two years for the other). Read More ›
This past holiday week, many moviegoers took in The Wolf of Wall Street, which is the latest glamorization of Wall Street misdeeds to hit the big screen. Of course, the most famous moment from a financial flick is still Gordon Gekko’s “Greed is good” speech in 1987’s Wall Street.
Greed isn’t always good, as Joseph F. “Skip” Skowron III, a former portfolio manager for Morgan Stanley, could probably tell you. Skowron’s admitted misconduct has cost him not only his freedom, but also $31,067,356.76 that he must pay back to his employer. Morgan Stanley v. Skowron, No. 12 Civ. 8016(SAS), 2013 WL 6704884 (S.D.N.Y. Dec. 19, 2013).
The big judgment arises from Skowron’s August 2011 plea agreement with the government, in which he admitted that he participated in a three-year insider trading conspiracy. As news reports described, Skowron used insider tips from a French doctor to avoid losses in hedge funds he managed, and then lied to the SEC about the tips. The judge in Skowron’s criminal case sentenced him to five years in jail, and ordered him to pay restitution to Morgan Stanley of 20% of his compensation over the time of the conspiracy.
Morgan Stanley then sued him to recoup the rest. In that lawsuit, it moved for summary judgment based on New York’s “faithless servant” doctrine. Under that doctrine, if an employer can show that an employee was disloyal – either because he engaged in “conduct and unfaithfulness” that “permeate[d] [his] service in its most material and substantial part, or because he breached “a duty of loyalty or good faith” – it can recover all of the compensation that the employee was paid during the period of disloyalty. Phansalkar v. Andersen Weinroth & Co., 344 F. 3d 184 (2d Cir. 2003). Read More ›
Ah, the smells of the holiday season: fresh-cut evergreen trees, just-baked cookies and other goodies, bowls of tasty fruit punch. Take a deep whiff wherever you are. Breathe it in deep.
But be careful about sniffing those smells, though.
That is the apparent lesson from the Fifth Circuit Court of Appeals’ decision in Tonia Royal’s retaliation lawsuit against her employer, an apartment management company named CCC&R Tres Arboles. The appellate court held that the trial court incorrectly gave the apartment company summary judgment, because too many material facts about the basis for Ms. Royal’s firing were in dispute. And many of those facts relate to the behavior of other CCC&R employees, who Ms. Royal alleged sexually harassed her by sniffing her in a rather curious and uncomfortable manner. Read More ›
Weather gurus are predicting snow, sleet, and rain for our area over the weekend. Although my kids are hoping for the white fluffy stuff, this amateur prognosticator is predicting a downpour. In keeping with this theme, the week’s biggest employment news is Robinson Cano’s $240 million deal with the Seattle Mariners (who are well accustomed to rainy skies). But our sights here at Suits by Suits are on matters a little less lucrative:
- You still have a chance to win free admission to our Dec. 10 webinar, “Whistleblower Watch: Big Issues in the Latest Whistleblower Cases Under Dodd-Frank, Sarbanes-Oxley, and the Internal Revenue Code.” For more details on this prize, click here.
- The First Circuit affirmed a summary judgment ruling in favor of Strine Printing Company against a former sales representative who claimed that his firing resulted in an “oleaginous mass of perceived wrongs.” The decision addresses a number of employment-related claims, including unjust enrichment, breach of an implied or express employment contract, and misrepresentation.
- We’ve previously covered the exploits of Larry Conners. Despite his year-long non-compete agreement, the St. Louis newsman is headed back to TV – as a pitchman. He’ll be a spokesman for John Beal Roofing.
- Jeff Green of Bloomberg Businessweek brought us the latest trend in executive hiring – the “golden hello.” These are multi-million dollar signing bonuses designed to entice new candidates to join the team. Among them: the $45 million that Zynga paid to entice an industry vet, Don Mattrick. Some are skeptical of the arrangements, noting that they don’t correlate with successful performance.
- A Louisiana appellate court has affirmed the dismissal of a lawsuit by former professors at Louisiana College, writes Charles Huckabee of the Chronicle of Higher Education. The professors claimed that they should have been able to use certain books in teaching classes on religion and values, which were prohibited by the college’s administration. The court refused to intervene on the ground that it was a religious dispute not proper for court involvement.
- Dominic Patton of Deadline Hollywood covered Jeff Kwatinetz’s suit against Prospect Park. The producer and talent manager wants a Los Angeles Superior Court judge to decide whether a noncompete provision in his agreement with Prospect Park can permissibly bar him from competing for five years.
Here's a tip that applies when you're negotiating any contract, although in this case we learn it from a negotiation over a severance contract: it's a rather bad idea to make a material change - like, perhaps, increasing the severance payment from 14 weeks of pay to 104 weeks - and then have the other side sign it, without telling them you inserted that change in their draft.
That tip comes from the Sixth Circuit's decision last week in St. Louis Produce Market v. Hughes. Two other helpful tips come from this case. One, for executives seeking to claim under a severance agreement, is to return any of the company's property if it's a condition precedent to obtaining your severance benefit. The other, for those people and their lawyers, is to not willfully disobey the court's discovery orders if you're litigating over the severance agreement. Read More ›
When Yu-Hsing Tu worked at pharmaceutical company UCB Manufacturing, he signed a strict confidentiality agreement. In the agreement, Tu promised that he would never disclose any of UCB's “secret or confidential information,” including a laundry list of items such as “designs, formulas, processes, . . . techniques, know how, improvements, [and] inventions.” Tu's work was important to UCB: he helped formulate its cough syrup products, including Delsym, and had significant knowledge of its “Pennkinetic system” for controlled release of cough medication in liquid form.
In 2001, Tu left UCB and started working for his friend Ketan Mehta at Tris Pharma. Soon after, Tu and Tris Pharma began formulating generic versions of UCB’s cough syrups. Six years later, Tris's competitive products were on the market, and UCB lost a lot of market share.
UCB immediately went to court and sued Tu and Tris for misappropriation of trade secrets, breach of contract, and unfair competition. It asked for a preliminary injunction -- a court order early in the lawsuit that would require Tris to stop using its trade secrets until the merits were finally decided. After a five-day hearing focused on the misappropriation claim, the trial judge denied the injunction, maintaining the status quo for Tris.
Shortly after that win, Tu and Tris took the offensive in the litigation, moving for summary judgment. At that point, UCB made a decision that would end up costing it later on: it voluntarily gave up its claim for misappropriation of trade secrets. The trial court then granted Tu and Tris’s motion for summary judgment on the other claims, relying on its finding during the preliminary injunction phase that Tu and Mehta were credible when they testified that they didn’t misuse UCB’s confidential info. UCB appealed. Read More ›
The “Borgata Babes” Case: Is An Employer’s Weight Requirement For Casino Waitresses Gender Discrimination Or A “Reasonable Appearance Standard?” Part 1
They’re beautiful. They’re charming. And they’re bringing drinks.
She moves toward you like a movie star, her smile melting the ice in your bourbon and water. His ice blue eyes set the olive in your friend’s martini spinning. You forget your name. She kindly remembers it for you. You become the most important person in the room. And relax in the knowledge that there are no calories in eye candy.
- Excerpt from a brochure recruiting candidates to work as “Borgata Babes,” serving drinks in the Borgata casino in Atlantic City, New Jersey.
Here at Suitsbysuits, we write posts that usually focus on rather serious disputes between executives and employers: the impact of arbitration and non-compete clauses, for example; or protections for whistleblowers. Occasionally we’ll write on more general features of employment that can impact the executive-employer relationship, such as religious discrimination or discrimination based on gender or pregnancy.
Those are all, shall we say, weighty matters. Today’s post is about a weighty matter in another sense: a lawsuit between a group of women who worked at the Borgata casino in Atlantic City, New Jersey, as cocktail servers, and alleged that the casino discriminated against them because of their gender and weight. Read More ›
As we’ve covered before on Suits by Suits, summary judgment can be a powerful weapon for a party to a civil lawsuit. By granting summary judgment, a court can resolve a claim before trial, meaning that it’s never heard by a jury. The standard for granting summary judgment, found in Rule 56 of the Federal Rules of Civil Procedure, is well-known to civil litigators: it is appropriate when there are no genuine issues of material fact and the case can be decided as a matter of law.
In a recent case from the District of Minnesota, Farmers Ins. Exchange v. West, the Farmers Insurance Group used summary judgment effectively on both offense and defense. First, it won a ruling that its former district manager, Theodore West, breached his appointment agreement and that Farmers suffered damages as a result. Then, on defense, it knocked out West’s counterclaims for breach of contract and discrimination.
So what happened in West’s case, and why did Farmers prevail? Read More ›
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 ›