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- Virginia Tech Professor Argues That University Officials Violated His Constitutional Rights When They "Demoted" Him
- The Inbox: July 18, 2014
- Two Federal Agencies Battle In Federal Court Over Whistleblower Treatment
- By Terminating Its CEO, American Apparel Unexpectedly Unravels Lending Agreement
- The Inbox - Independence Day Edition
- What’s Worse Than Losing A Non-Compete Dispute? Paying $200K For The Fun Of Losing
- The Inbox – World Cup Edition
- SEC’s First Anti-Retaliation Action Under Dodd-Frank Act Carries Warning for Employers
- …And All He Got Was a Fashionable T-Shirt: American Apparel Terminates Its CEO
- The Inbox: June 20, 2014
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Showing 47 posts in Wrongful Termination.
Last 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 ›
Let 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 ›
Jerry 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 ›
We 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?
Regular 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 ›
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 ›
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.
Twice as Nice for Employers: Federal Courts of Appeals Affirm Sarbanes-Oxley, Kansas Whistleblower Dismissals
For those of us who follow whistleblower law, Wednesday was a big day – and a good one for employers. In two separate federal appellate decisions, courts affirmed the dismissal of whistleblower actions based on very different issues. For potential whistleblowers and employers alike, the decisions demonstrate yet again the importance of the particular requirements and scope of the law that a whistleblower relies on to support his claim.
The first decision, Villanueva v. Department of Labor, No. 12-60122 (5th Cir. Feb. 12, 2014), comes to us from the Fifth Circuit. It involves William Villanueva, a Colombian national who worked for a Colombian affiliate of Core Labs, a Netherlands company whose stock is publicly traded in the U.S. Villanueva claimed that he blew the whistle on a transfer-pricing scheme by his employer to reduce its Colombian tax burden, and that his employer passed him over for a pay raise and fired him in retaliation for his whistleblowing. 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 ›
On Tuesday, the Supreme Court heard oral argument in Lawson v. FMR LLC. As we explained in this post, Lawson presents the question of whether Sarbanes-Oxley’s whistleblower anti-retaliation provision (Section 806 of Sarbanes-Oxley, codified at 18 U.S.C. § 1514A) shields employees of privately-held contractors of public companies such as the plaintiffs, who are employees of investment advisers for Fidelity mutual funds. We editors of Suits by Suits don’t often get the chance to report live on the cases we cover, but an argument at One First Street was too tempting to pass up, even on a blustery Washington day. Here are five major takeaways that we drew from the argument (with the caveat that reading the tea leaves from an oral argument is always a difficult proposition):
1. The Court is uncomfortable with the scope of potential Sarbanes-Oxley claims that would result from the Fidelity employees’ interpretation of the statute.
A number of Justices pressed Eric Schnapper, who argued for the Fidelity employees, and Nicole Saharsky, arguing for the United States in support of the employees, as to how the Court could limit the reach of the statute if it holds that Sarbanes-Oxley allows employees of private companies to bring whistleblower retaliation claims. Justice Breyer posed a hypothetical involving an employee of a privately-held gardening company who reports on mail fraud by his employer, is fired, and then brings a whistleblower anti-retaliation claim, arguing that he is covered by Sarbanes-Oxley because his company has gardening contracts with public companies. Schnapper argued that the statute as written would cover the gardener, but the Justices were less convinced that Congress intended this kind of reach for Sarbanes-Oxley. Justice Breyer even commented that the fear of expanding the statute to cover “any fraud by any gardener, any cook, anybody that had one employee in the entire United States” was the “strongest argument” against the Fidelity employees’ position. Read More ›