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Showing 50 posts in Wrongful Termination.

You’re In the Zone… Of A Massive Punitive Damages Verdict for a Pregnant Manager

On Monday, AutoZone found itself on the wrong end of a $185 million verdict in favor of a former store manager, Rosario Juarez.  Yes, you read that right.  $185 million.  This stunning verdict appears to have been the result of Juarez’s allegations of discrimination and retaliatory discharge, combined with an insider turned witness who provided extremely damaging testimony against the auto parts retailer.

In her complaint, Juarez alleged that AutoZone had a “glass ceiling” for women employees, which it kept in place through a hidden promotion process where open positions were not posted.  According to Juarez, she succeeded in cracking the glass ceiling, securing a store manager position, but when she became pregnant, she was treated differently by her district manager.  After giving birth, she complained about the unfair treatment and was soon demoted by the manager, who told her that she could not be a mother and handle her job.  Later, she was terminated as the result of a loss prevention inquiry, in which she refused to participate in a “Q&A” statement about a theft at the store.  Juarez alleged that the loss prevention department’s request for a statement was a pretext to fire her. 

We’ve spent a lot of time on this blog discussing allegations of pregnancy discrimination like these (see, for example, here, here and here).  The short of it is that a company can’t treat pregnant women, or women who have  given birth, differently than it treats other employees.  But we’ve never covered a verdict for pregnancy discrimination that looked more like a Powerball win than a litigation result. Read More ›

Fired for Taking the Fifth: Part 1 – The Private Sector Employee

Recently, in a government investigation by the civil division of a United States Attorney’s Office, an employee of a private company was deposed pursuant to a Civil Investigative Demand (CID).  The employee, on the advice of counsel, refused to answer questions on certain topics and invoked the Fifth Amendment right against compulsory self-incrimination (she “took the Fifth” in common shorthand).  Several days later, she was fired by her employer for taking the Fifth.  (The employer claimed that it wanted to show cooperation with the government’s investigation and taking the Fifth is viewed as being non-cooperative.)  When I recounted this story to my non-lawyer fiancée, he was outraged and wondered how could her employer do such a thing? Wasn’t this retaliation? Didn’t she have a clear wrongful termination claim against her employer? Good questions. While most, if not all, states (and the federal government) have enacted provisions to protect employees who blow the whistle on illegal activity from retaliatory discharge, is there any protection from discharge for an  employee of a private company who chooses to keep mum to protect herself?

The short answer is no.

In our Bill of Rights, No. 5, it is written that “[n]o person … shall be compelled in any criminal case to be a witness against himself.” Although the text limits the right to stay silent in a criminal case, it is generally accepted that a witness may assert the right in any context in which the witness fears his/her statements may later be used against him/her. Thus, as an American I have the right to refuse to answer questions or offer information which I fear could incriminate me. [A full discussion of the scope of Fifth Amendment protection is beyond the scope of this post.  To learn more about the Fifth Amendment protections against self-incrimination, I refer the reader to The Privilege of Silence, authored by my fellow Zuckerman Spaeder attorneys Steven M. Salky and Paul B. Hynes and available here.] Read More ›

This Year’s Scariest Posts on Executive Disputes

In honor of Halloween, we are looking over our shoulder at some of the most frightening news that we have brought to you this year on Suits by Suits:

  • Earlier this week, we told you the tale of a CEO who was hauled into court thousands of miles away and slapped with an employee’s wage bill.  That’s the kind of stuff executive nightmares are made of.
  • Bonfires are part of what makes Halloween special.  Unless they involve torching a laptop, destroying evidence, and getting hit with an adverse inference for spoliation at trial, which is what happened to one unhappy executive.
  • The SEC announced its presence as a boogeyman for employers who punish whistleblowers, filing its first Dodd-Frank anti-retaliation action against one company and ordering a $30 million bounty for another employee.
  •  Terror babies are scary, as anyone who’s seen Rosemary, Chucky, and Damien on screen knows.  Now, we have more terror babies to add to the mix, thanks to the bizarre saga of Rep. Louis Gohmert and fired Texas art director Christian Cutler.
  • Ever been lost in a hall of mirrors?  Just think how confused this executive was, after her employer told her that she wasn’t releasing her claims for a shareholder payment and then defeated those same claims based on … her release.
  • And perhaps the scariest story of all: the company that lost a non-compete dispute and then had to pay $200,000 of its opponent’s legal fees.  That’s like finding a razor blade in your Mounds bar.

…And All He Got Was a Fashionable T-Shirt: American Apparel Terminates Its CEO

Green t-shirtLast week, American Apparel announced that its board had decided to terminate Dov Charney, the company’s founder, CEO, and Chairman, “for cause.”  (We’ve discussed the meaning of terminations “for cause” in prior posts here and here.)  The board also immediately suspended Charney from his positions with the company.  Although the board didn’t initially disclose the reasons for its action, Charney is not new to controversy; in recent years, he has faced allegations of sexual harassment and assault.

The reasons for Charney’s termination have now become public, and they aren’t pretty.  In its termination letter, available here, the board accuses Charney of putting the company at significant litigation risk.  It complains that he sexually harassed employees and allowed another employee to post false information online about a former employee, which led to a substantial lawsuit.  The board also says that Charney misused corporate assets for “personal, non-business reasons,” including making severance payments to protect himself from personal liability.  According to the board, Charney’s behavior has harmed the company’s “business reputation,” scaring away potential financing sources. Read More ›

Lawyers like their clients – really, they do. But they can’t vouch for them.

Guarantee StampLet me explain what that means: “vouching” is, for us members of the bar, both a technical term and a no-no.  When it’s done at the trial of an executive employment dispute, it can unfairly prejudice the jury – and, ultimately, the “vouched-for” side can have its victory overturned by an appellate court.   We’ll see how this happened in the case of one Mindy Gilster. 

But first, more on “vouching.”  In law, it means essentially what non-lawyers think it means: to give a personal assurance of the credibility or truth of something.  All of us use this in our daily lives: “I know you’ll love that restaurant;” “trust me, you’re making the right decision;” and so on.  Lawyers, though, can’t “vouch” for their clients or for a witnesses’ credibility.  Not only is it considered a bad practice, but the Rules of Professional Conduct in most states forbid us from “assert[ing] personal knowledge of facts in issue…or stat[ing] a personal opinion as to the justness of a cause, the credibility of a witness, [or] the culpability of a civil litigant…”  Put another way, lawyers need to build arguments from the facts that are actually entered into evidence, and not on what they personally think the facts should be. Vouching comes up most often in criminal cases – but, as in the case of our subject today, it can surface in civil litigation over employment disputes. Read More ›

In Battle of Words, Former Netflix Exec Says That Company Defamed Him

Apple iPad displaying NetflixJerry Kowal doesn’t have a lot of nice things to say about his former employer, Netflix.  In a recent lawsuit filed in California Superior Court, he claims that Netflix was a “cold and hostile company,” with a “cutthroat environment.”

According to Courthouse News’s description of Kowal’s complaint, Netflix didn’t have very nice things to say about Kowal, its former content acquisition executive, either.  Kowal alleges that when he told Netflix he was leaving for Amazon, Netflix lashed out by accusing him of stealing confidential information and passing it on to Amazon.  As a result of these accusations and Amazon’s “strict liability policy,” he was fired.

Now, Kowal has sued Netflix, its CEO Reed Hastings, executive Ted Sarandos, and Amazon, alleging a number of torts including defamation, false light invasion of privacy, civil conspiracy, intentional interference with employment relationship, blacklisting and wrongful termination.  Kowal’s suit shows that an employer’s decision to accuse a departed employee of wrongdoing carries with it a significant litigation risk, especially if the employee loses his job as a result of the accusation. Read More ›

Political Intrigue, Sex, And Money

college system troubleWe see – and report on – plenty of whistleblower complaints here at Suits-by-Suits. We’re mostly interested in how those complaints play out legally, and what they can teach us about ways to avoid, or manage, whistleblower disputes and what leads to them.  But outside of the law, some complaints include alleged facts that just tell a compelling story in and of themselves. 

How about these allegations in Glenn Meeks’ wrongful termination complaint against Chicago State University: Financial mismanagement, a romantic relationship between top university executives, high-level posts filled with unqualified personnel, intrigue on the university’s board of trustees after Meeks complained of these things, and – a bonus, from a storytelling perspective – a suspicion of improper interference by the Governor of Illinois in the whole thing. 

And another bonus: Meeks filed his complaint in Illinois state court just two weeks after another whistleblower at the same university was awarded $2.5 million  Read More ›

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 ›

Whistleblower or wrongfully terminated employee? California Supreme Court says: ‎whistleblower

There’s often a fine line between being a bona fide whistleblower and being just an angry plaintiff suing for wrongful termination.  The plaintiff’s allegations of whistleblowing conduct can often be very similar to the conduct that gave rise to him or her being fired – setting up something of a Rorschach blot test for the court that is trying to figure out what’s really going on. 

That’s the position doctor Mark Fahlen found himself in.  Doctor Fahlen was fired by his employer, a group of doctors working at a hospital in California.  The doctor said he was fired, in part, because he complained – as a whistleblower – about nurses in the hospital failing to provide adequate care for his patients because they failed to follow his instructions.  The group of doctors fired Fahlen after the hospital revoked his privileges (apparently a necessary part of being a member of the group) because it said Fahlen had angry fights with those same nurses – and, therefore, he was fired because he wasn’t a suitable employee.  So, essentially the same factual allegations could be whistleblowing or a basis for termination.   Read More ›

The Inbox - Valentine's Day Edition

Love is in the air as couples celebrate Valentine’s Day with chocolates, flowers and romantic dinners.  But there’s no love lost between some employers and their executives, as this week’s Inbox shows:

  • BLR.com reports on a fascinating case involving Bruce Kirby, former CEO of Frontier Medex.  In a lawsuit in Maryland federal district court, Kirby alleged that he was the beneficiary of a change-in-control severance plan and that Frontier kept him on for over a year solely for the purpose of defeating his severance benefits, even though it told him it was going to terminate him before that.  The court ruled that he was not contractually entitled to severance, but could pursue a claim that Frontier interfered with his benefits, violating ERISA.
  • Retired Ohio Bureau of Workers’ Compensation attorney Joe Sommer is asking the Ohio Supreme Court to review a decision that limited the application of whistleblower protections in that state.  He believes that the Franklin County Court of Appeals overly limited whistleblower claims when it ruled that an employee had to report criminal conduct in order to be protected from retaliation.
  • According to Benefits Pro, the EEOC “slammed” CVS over its severance deals in a lawsuit against the company in Illinois federal court.  The lawsuit alleges that CVS required employees to sign severance agreements with five pages of small print, some of which bargained away the employees’ rights to communicate to agencies about practices that violated the law.  CVS says that nothing in those agreements barred employees from going to the EEOC with complaints.
  • Hook ‘em, Mack!  Former Texas football coach Mack Brown, who resigned after this season, did get some love from his employer, as the San Francisco Chronicle reports that he will receive $2.75 million that he was owed under his contract in event of termination.  He will also get a cushy $500k job this year as special assistant to the president for athletics.
  • John O’Brien of Legal News Line reports that a California appellate court will allow a whistleblower’s claim of retaliation under the False Claims Act to be heard in state court.  Dr. Scott Driscoll, a radiologist, claims that he was fired for complaining that his employer was committing Medicare fraud.  When the employer sued him in state court, Driscoll counterclaimed for FCA violations.  The California court decided that it had jurisdiction to hear the claim, rejecting the employer’s argument that federal courts have exclusive jurisdiction over FCA retaliation claims.