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Showing 62 posts in Wrongful Termination.

The Clock is Ticking: Supreme Court Rules on Statute of Limitations for Constructive Discharge

Last week, the U.S. Supreme Court issued a plaintiff-friendly decision resolving disagreements over the question of when a constructive discharge claim accrues. The lower courts didn’t agree on when the clock should start ticking on claims by employees that they were forced to quit, creating uncertainty for plaintiffs who faced the possibility that their claims would be barred by the statute of limitations if they didn’t sue soon enough. 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 Inbox – Liar, Liar, Pants on Fire

As the United States gears up for next year’s presidential election, it’s always fun to check in with PolitiFact’s Truth-O-Meter on the days following debates or periods of political grandstanding to see who is really telling the truth and whose pants are on fire.

Since we’re all human – yes, politicians are, too – some of us admittedly engage in the occasional white lie or embellishment in the work place. While we don’t have PolitiFact to fact-check our boardroom meetings, one employee recently alleged that his CEO tried to snuff out lies using a portable lie detecting machine. Read More ›

The Inbox – Some Like It Not

Facebook is as public a forum as they come, yet it’s ironic how intimate some posts can be, as if the user is thinking out loud for everyone to hear.

Posts can be funny, political, or just plain weird, while others allow us to commiserate, empathize, or laugh out loud as we take that ultimate step of “liking” them. Sometimes liking another person’s thoughts can carry a high cost, especially if those thoughts disparage one’s employer.

Triple Play Sports Bar and Grille, the disparaged party in this example, took issue with the Facebook activity of two of its employees. Employee Vincent Spinella, a cook, “liked” this statement of a former employee:

“Maybe someone should do the owners of Triple Play a favor and buy it from them. They can't even do the tax paperwork correctly!!! Now I OWE money...Wtf!!!!”

Bartender Jillian Sanzone added the comment, “I owe too. Such an asshole.”

Triple Play’s management noticed the online behavior and discharged Spinella and Sanzone for violating company policy relating to prohibited internet activity. Read More ›

The Inbox – No Fall Guys Allowed

The Justice Department issued a memo to United States attorneys nationwide that might have Wall Street executives shifting nervously in their seats. The memo signifies a new focus as it instructs both civil and criminal prosecutors to pursue individuals, not just their companies, when conducting white collar investigations. According to The New York Times, the memo is a “tacit acknowledgement” that very few executives who played a role in the housing crisis, the financial meltdown, and other corporate scandals have been punished by the Justice Department in recent years. Typically when a company is suspected of wrongdoing, the company settles with the government after supplying the authorities with the results of its own internal investigation. This paradigm has led to corporations paying record penalties, while individuals usually escape criminal prosecution. Deputy U.S. Attorney General Sally Q. Yates authored the memo and articulated the Justice Department’s new resolve. “Corporations can only commit crimes through flesh-and-blood people. It’s only fair that the people who are responsible for committing those crimes be held accountable.” To achieve this end, U.S. attorneys are directed to focus on individuals from the beginning, and will refuse “cooperation credit” to the company if they refuse to provide names and evidence against culpable employees. And don’t think about naming a fall guy to take the blame. Ms. Yates said the Justice Department wants big names in senior positions. “We’re not going to be accepting a company’s cooperation when they just offer up the vice president in charge of going to jail.” We’ll have more on the Yates Memo and its potential implications in weeks to come. Read More ›

Court Disposes of Former CEO’s Claims Against Purchaser of His Company’s Trash Carts

Normally, in litigation between executives and employees, the executive will bring suit after he or she is fired, alleging wrongdoing by the former employer. This makes sense: the employer, after all, is the one who took the adverse action against the exec. And it’s the one that caused the damage, assuming that the executive can prove his or her claims.

The case of Stephen Stradtman, former CEO of Otto Industries North America, Inc., was not a normal case. For one thing, Stradtman wasn’t fired – he quit. And Stradtman didn’t sue Otto – he sued two other companies (Republic Services, Inc. and Republic Services of Virginia, LLC) and one of their employees. Read More ›

Sixth Circuit Upholds Financial Planner’s Sarbanes-Oxley Win

Section 1514A of the Sarbanes-Oxley Act shields a whistleblower from retaliation if he reports “conduct [that he] reasonably believes” violates certain laws, including Securities and Exchange Commission regulations.  Last month, the Sixth Circuit held that the question of a whistleblower’s “reasonable belief” is a “simple factual question requiring no subset of findings that the employee had a justifiable belief as to each of the legally-defined elements of the suspected fraud.”  Rhinehimer v. U.S. Bancorp Investments, Inc., No. 13-6641 (6th Cir. May 28, 2015).  Based on this principle, the court affirmed a $250,000 verdict in favor of the plaintiff, Michael Rhinehimer.

According to the Court’s opinion, Rhinehimer was a financial planner for U.S. Bancorp who helped his elderly customer, Norbert Purcell, set up a trust and a brokerage account.  In November 2009, Rhinehimer went on disability leave, and asked a colleague not to conduct any transactions with Purcell.  The colleague didn’t follow the instructions, and instead put Purcell into investments that Rhinehimer believed were unsuitable.  (Unsuitability fraud under the securities laws occurs when a broker knows or reasonably believes certain securities to be unsuitable to a client’s needs, but recommends them anyway.)    Rhinehimer complained about the trades, but his superiors warned him that he should “stay out of the matter” and stop criticizing the colleague.  After Rhinehimer hired a lawyer, he was placed on a performance improvement plan and fired after he failed to meet it. Read More ›

The Inbox – Trends in the C-Suite

Doug Parker, the Chairman and CEO of American Airlines, has just joined a small cadre of executives who earn no salaries. Before anyone starts a GoFundMe page for Mr. Parker, consider that his 2015 compensation consists of 207,672 restricted stock units, the value of which will depend upon the airline’s performance. According to the Wall Street Journal, the stock units could amount to compensation in the range of $10.7 million if calculated using the current stock price of $51.40. By comparison, Mr. Parker earned $12.3 million in 2014, 40% of which was cash in the form of a $700,000 base salary and annual cash incentives. Mark Reilly, head of Verisight, Inc., a firm of executive compensation consultants, told the Journal that this type of compensation structure is more often found in companies facing financial hardship, and the lack of salary is offset by more generous stock awards. In the case of an executive in an established, mature industry, the message seems to be that Mr. Parker believes in the stock and that he is willing to tie his compensation to its performance.  Given US Airways’ performance since its merger with American in 2013, this wouldn’t seem like an incredible risk on his part. The combined company “has soared to record profit and its stock has climbed 42% in the past year.” Read More ›

L’Oreal Lawyer Claims Company Fired Him When He Wouldn’t Pursue Problematic Patents

After firing its head patent attorney, Steven Trzaska, L’Oreal is now under fire from Trzaska in New Jersey federal court.  On April 16, 2015, Trzaska sued L’Oreal, claiming that his firing violated New Jersey’s Conscientious Employee Protection Act (“CEPA”).

In his complaint (available at Law360), Trzaska alleges that L’Oreal had a quota for its New Jersey office of 40 filed patent applications in 2014.  But, Trzaska contends, an outside consultant had previously found that many of L’Oreal’s patent applications were purely cosmetic, saying that “the vast majority of its inventions were of low or poor quality.”  Trzaska alleges that his superiors pressured him to file applications to meet the quota.  However, he told them that “neither he nor the patent attorneys who reported to him were willing to file patent applications that the attorneys believed were not patentable.”  Soon after, L’Oreal terminated him, saying that it was hiring a new “head of patents of the Americas.”  Trzaska claims that this explanation was pretext and that the company in fact fired him because he refused to file applications that were not patentable.

How do Trzaska’s claims line up with CEPA?  Read More ›

Former Venture Capital Partner Gets Her Day (Actually, Month) in Court

Silicon Valley is buzzing about the trial in Ellen Pao v. Kleiner Perkins Caufield and Byers LLP, which got underway on Tuesday.  According to USA Today, a UC-Berkeley professor says that you “can’t be within a stone’s throw of the Valley without hearing” about the case.

The cast of characters (described here by the San Francisco Business Times) includes a number of heavy hitters, including Pao herself.  Pao, a graduate of Princeton, Harvard Law, and Harvard Business School, is now the CEO of Reddit.  Kleiner Perkins is a well-known venture capital firm in Menlo Park, a city that has been described as the “center of the venture capital universe.”

Pao’s allegations are explosive.  She contends that she had a brief affair with a married junior partner who continued to harass her after she broke off their relationship.  Her claims about the firm go deeper than just this harassment; she contends that the firm had an overarching culture of discrimination against women, culminating in her dismissal in October 2012.  Read More ›