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- The Inbox – December Rain Edition
- California Court SLAPPs Down Employee’s Malicious Prosecution Suit Based on Employer’s Trade Secret Case Against Him
- Upcoming Suits by Suits Whistleblower Webinar – Chance for Free Registration!
- Visions of an Improper Noncompete Provision: Texas Court Rejects LASIK Clinic’s Injunction Request Against Former Doctor
- November 2013 Monthly Roundup
- Skunks, Conquistadores, and Killer Balloons: Why Thanksgiving Is The Best Tuesday (or Possibly Thursday) of the Year
- Texas Strictly Construes Application of Mandatory Arbitration Clause Despite Superseding Agreement With No Such Clause
- Will Fiduciary Liability Insurance Cover Severance Agreement Payments If The Company Can’t Make Them?
- The Inbox, pre-Turkey Day edition
- Upcoming Suits by Suits Webinar: Whistleblower Watch
- After-Acquired Evidence
- Age Discrimination
- Arbitration and ADR
- Breach of Contract
- Civil Litigation
- Dodd-Frank Act
- Equal Pay
- Executive Compensation
- Family Medical Leave
- Fiduciary Duties
- Monthly Roundup
- Motions to Dismiss
- Noncompete Agreements
- Pregnancy Discrimination
- Preliminary Injunction
- Religious Discrimination
- Sarbanes-Oxley Act
- Severance Agreements – Change-in-Control Provisions
- Social Media
- Statutes of limitations
- Summary Judgment
- The Basics
- The Inbox
- Title VII
- Trade Secrets
- Vicarious Liability
- Wage and Hour
- Workplace Conditions (Occupational Safety and Health)
- Wrongful Termination
Blogs We Like:
The AmLaw Daily
The BLT: The Blog of LegalTimes
Connecticut Employment Law Blog
The D&O Diary
Delaware Employment Law Blog
DeNovo: A Virginia Appellate Law Blog
The Employer Handbook
Executive Pay Matters
The Federal Criminal Appeals Blog
Grand Jury Target
Screw You Guys, I’m Going Home: What You Need To Know Before You Scream “I Quit,” Get Fired, Or Decide to Sue the Bastards
Trade Secrets & Noncompete Blog
Virginia Appellate News & Analysis
WSJ Law Blog
Showing 64 posts in The Inbox.
Here at the Suits by Suits Western Hemisphere Nerve Center, we’re anxiously preparing for our Thanksgiving Day celebration. Our planned parade down Constitution Avenue celebrating all things executive-employment-related has, however, had to be cancelled in the wake of many battles with former participants. We’re still fighting an employment discrimination claim from this guy, although we keep telling him we didn’t fire him because he was green – that’s not a protected class, anyway – but because he was moving too slow on the parade route. This weird critter demands severance pay, and that’s just ridiculous. Also, Mr. Dough-guy here wants reinstatement, even though business reasons required us to give him the (buttered?) knife in the wake of the Nation’s growing carb-consciousness.
And don’t even get us started on the personal injury litigation that followed this fellow running into a light post. Bah-humbug to all of it, and pass the turkey and trimmings --
But let’s start with the cheese plate: A Wisconsin company that makes dairy processing equipment is “looking to reach a settlement” with a Minnesota company that won a $22.8 million judgment against it; the jury found that the Wisconsin company hired employees from the Minnesota one who brought with them confidential design information and other trade secrets.
In two whistleblower suits involving government entities: 1) a state employee wasn’t a protected whistleblower when she was fired after it was determined her job wasn’t in line with the federal funding that paid for it, the First Circuit Court of Appeals holds; but 2) Georgia’s whistleblower statute expressly waives the defense of sovereign immunity – so Fulton County, Georgia can’t use that defense against two whistleblowers, says the Georgia Supreme Court.
A dispute over stock redemption goes to arbitration instead of litigation, based on a non-compete: A former executive of Valerus will have to arbitrate his claim that the company forced him to liquidate his stock under a severance agreement, because a prior partnership agreement included an arbitration clause, a Texas appellate court held.
Forbes on whistleblowers: An interesting analysis of the SEC’s whistleblower report from the financial services media company here. Key line: “a lack of clarity concerning the scope of the Dodd-Frank anti-retaliation provisions raises questions as to whether the SEC will continue to see the increase in tips it has experienced to date.”
Whatever it is, there’s a whistle blowing inside: We’re not sure what a “vitrification plant” does – sounds scary or kinky, or both – but a manager at one in Washington State says that the plant’s operator is retaliating against her again, two years after she filed a whistleblower complaint.
If you are interested in more information about legal issues involving executives and their employers, on December 10, 2013, Zuckerman Spaeder LLP partners and Suits by Suits contributing editors Ellen D. Marcus and Jason M. Knott will present a webinar titled “Whistleblower Watch: Big Issues in the Latest Whistleblower Cases Under Dodd-Frank, Sarbanes-Oxley, and the Internal Revenue Code.” In the session, Ms. Marcus and Mr. Knott will discuss the basics of these whistleblower and anti-retaliation provisions and address new developments in the law, including the Sarbanes-Oxley case currently pending before the U.S. Supreme Court. To register, click here.
- Partners of the company that owns the Philadelphia Inquirer testified this week at a preliminary injunction hearing in a state court in Philly in a case that they brought against their other partners alleging that having editor Bill Marimow fired violated the company’s operating agreement. They seek a court order directing that Marimow be reinstated.
- On Wednesday, a federal appeals court (also in Philly) affirmed a trial court’s summary judgment ruling against Janis Stacy, an engineer and transgender person, in her case against her former employer LSI Corp. for gender identity discrimination. Stacy was let go by the company after transitioning from male to female. The appeals court agreed with the trial court that Stacy did not have evidence of discriminatory intent to overcome the company’s evidence that she was terminated as part of a larger reduction-in-force due to the declining economy. You can find the opinion in Stacy v. LSI Corp. here.
- Film director Lynn Ramsay reported this week that she has not been served with the lawsuit recently filed against her in New Mexico for breach of contract by the producers of Jane Got a Gun – a Western movie in the making starring Natalie Portman. Ramsay had been the original director on the project. The producers allege that she accepted a large chunk of her salary under the agreement but didn’t show for the first day of production and behaved badly on the set.
- A trial court in Atlanta ruled on Tuesday that the former Compliance Manager of BlueLinx Holdings, Inc. does not have a right to a jury trial in his case against BlueLinx for allegedly retaliating against him in violation of the Dodd-Frank Act after he blew the whistle on the company to the SEC and the PCAOB for allegedly excessive stock-based compensation for the company’s CEO. The whistleblower provisions of the Dodd-Frank Act are a frequent topic on Suits by Suits and will be examined closely in this upcoming webinar.
Although Halloween has come and gone, you can continue to celebrate Dia De Los Muertos with us here at Suits By Suits; we recommend sipping a nice anejo tequila while catching up on this week's news. (Hey, it beats legions of candy-seekers dressed as "Angry Birds," no?)
- The biggest news of the week comes from yesterday's news that the Senate Judiciary Committee approved a bill to protect antitrust whistleblowers; the full text of the proposed bill can be found here. We'll analyze the provisions of the proposed legislation in the coming days, but in the meanwhile, you might brush up by reading our past library of posts on whistleblowers.
- Scott Norris, former executive vice president for San Diego County Credit Union, has filed a wrongful termination claim against his former employer, alleging that he was retaliatorily discharged after blowing the whistle on the bank's alleged failure to correct thousands of errors in the processing of loan payments. SDCCU denied the allegations without further comment. We'll be watching, of course.
- Way back in March of this year, our colleague Bill Schreiner wrote two excellent articles (part one, part two) on the unfortunate situation involving Jerry Sandusky and Penn State. This week, we learned that Penn State has agreed to pay nearly $60 million to the 26 known victims of Sandusky's sexual abuse.
- Fallout continues in the forthcoming merger between #2-ranked office-supply company Office Depot with #3-ranked OfficeMax; this week, we learned that neither company's incumbent CEOs -- Office Depot's Neil Austrian and OfficeMax's Ravi Saligram -- intend to submit their names for consideration to helm the combined company. Instead, both will collect lucrative (and already-controversial) golden parachutes; $15 to $16 million for Austrian and $13.5 million for Saligram, according to the Orlando Sun-Sentinel.
- Presumably in light of the ongoing controversy over such packages, SunPower's CEO, Thomas H. Werner, has requested that the company amend his Employment Agreement to reduce his severance benefit package in the event of termination. Under the terms of the amended agreement, Werner would receive two years' base salary (reduced from three), two times his annual bonus (reduced from three) and two years' worth of subsidized health care benefits (also reduced from three). Might this be the wave of the future as executives try to tamp down on potential outrage over golden parachutes? Only time will tell.
We’re getting over the withdrawal symptoms we suffered on Tuesday, which was National Snark-Free Day – something we learned from this article in the venerable Washington Post. Yes, many thanks, Washington Post, for filling your pages with only the most important information.
In the meantime, several items of interest came over our transom – some with their own built-in snark; others waiting, Ikea-furniture-like, to be brought to life with your snark – but all noteworthy in our area of expertise:
- To hell with this unpaid labor – it’s just too expensive, says Devil Wearing Prada: Magazine publisher Conde Nast – famous for being sued by its interns last year for labor law violations and for a fictional profile that purports to reflect life at one of its leading publications, among other things – has announced it is discontinuing its internship program.
- End your career in 140 characters or less: We’ve written “B4” about social media and the problems they can create for employers and employees but – sigh – some people just haven’t read our cautions yet. Including, apparently, this now-former National Security Council staffer who was tweeting snarky tweets from his workplace just across an alley from the White House that really annoyed his colleagues – often the subject of the anonymous barbs – to no end. Fun fact: Jofi Joseph was fired after he tweeted false information planted as part of an internal “sting” operation to smoke him out.
- Insert your own snarky comment for this one: Pop star Lady Gaga has settled a suit brought by her former personal assistant, seeking overtime for being on call 24/7.
- Night Of The Living…er, well, whatever: Just in time for Halloween, the Wall Street Journal has this piece on the “security horror” caused by departing employees. Maybe that’s a strong way to put it – this or this, frankly, is much more horrifying to us, but we admit it’s a subjective call. In any event, we’ve written about these issues before, but the WSJ piece is an informative (if hyperbolic) read.
- Also, Law360 has republished this great article about the perils of marriage between executives of competing businesses and whether or not firing one (or both) spouses is prohibited discrimination, written by our good friend and colleague John Connolly (and which first appeared at your favorite blog).
- James Whitney, the former CEO of Illinois-based Tallgrass Beef Company has sued the company and its owner Bill Curtis for unpaid wages. Whitney claims that he was not paid his regular wages starting in 2011 and was never paid his final compensation, and seeks to hold Curtis personally liable. The Illinois Wage Payment and Collection Act is not unusual in providing that an officer of a corporation can be found personally liable to an employee for violating the Act if the officer knowingly permitted the corporation to violate the Act.
- Dan Allen and the defense contractor CACI, where Allen had been CEO, agreed to modify Allen’s separation agreement to reduce his lump-sum cash severance from $1.6 million to $1 million, and, in return, his non-compete agreement has been made less restrictive. The company’s SEC filing describing the modification can be found here.
- Amicus (or friend of the court) briefs are pouring into the Supreme Court in the case of Lawson v. FMR, which is set for oral argument in November (see our own Jason Knott’s most recent post on the case) and raises the question of whether the Sarbanes-Oxley Act protects employees of privately-held contractors and subcontractors of public companies from retaliation when they blow the whistle on suspected fraud. The WSJ reports that business groups and a group of former SEC officials (including former SEC Chairman Christopher Cox) are lining up on the side of the court finding that the employees are not protected, while the National Whistleblowers Center and other pro-whistleblower groups are lining up on the other side.
- We found interesting this commentary in Corporate Counsel earlier this week about reasons that companies with employees who blog at work should be mindful when considering whether to fire those employees for their blogging – including laws in some states that make it illegal to fire an employee for expressing political views, and federal and state laws protecting whistleblowers (including “whistlebloggers”) from retaliation for raising concerns about unlawful conduct in the workplace.
In honor of both our Tampa- and Baltimore-based colleagues (including yours truly), this week's Suits by Suits Inbox is rooting for the Tampa Bay Rays to defeat the Boston Red Sox in the American League Division Series; game 1 starts tonight. Alternatively, if you're not into baseball, perhaps you'd prefer a tasty beverage? Here's a link to 31 days of Disney-themed craft cocktails, one for each day of October. With that in mind -- or perhaps in hand, depending on when you read this -- on with our weekly recap: Read More ›
Here at the Suits by Suits Global Operations Center, we’re a bit bummed that our beloved Washington Nationals Baseball Club has now exhausted any chance it ever had of making the playoffs, as have the almost-local Baltimore Orioles. All is not lost, however, because now we can turn our undivided focus to our Washington football team – the one with the name that is something of a point of dispute. The football season here will be exciting, even if it is off to a rough start.
Glum as our sporting life may be, it’s a worthwhile distraction from the possibility of a government shutdown, although perhaps not as fun as our other new Washington fad: debating the merits of green eggs and ham.
In any event, news of disputes between employers and executives – and news in related areas – continues to come in over our electronic transom. Here are the highlights:
- Here’s a story related to the Affordable Care Act that you may not have expected: a whistleblower suit arising out of the District of Columbia’s work to establish one of the exchanges called for by the new law. This week, a federal judge in D.C. allowed Jennifer Campbell’s suit against the District to proceed. Campbell, who seeks $5 million, alleges she was fired after she spoke out publicly about problems with a contract to set up the insurance exchange.
- We’ve written about former TV anchorman Larry Connors’ suit against his employer and the non-compete clauses at the heart of it. But non-competes are apparently common in the radio business too: this interesting article looks at a few different ones being used in the Atlanta market.
- Not sure how well this translates (sorry), but language education company Rosetta Stone is trying to dismiss a Florida lawsuit brought against it by competitor Open English. Open English alleges two employees violated non-compete clauses and stole trade secrets when they joined Rosetta Stone. Shortly after Open English sued Rosetta Stone in Florida, Rosetta Stone filed its own case against Open English in California; Rosetta Stone argues that the Florida case should be thrown out to allow the California case to go forward. The parties disagree over whether Florida or California law would apply to the dispute, as well – what’s Californian for “conflict of laws?”
- Esteemed colleague P. Andrew Torrez wrote last year about this suit against Abercrombie & Fitch, alleging the clothing retailer violated Title VII by discriminating against employees who wore hijabs; now, the case is apparently settled for just over $70,000 – details here and here.
- A former U.S. Tennis Association umpire and referee has sued the Association’s Pacific Northwest Section for allegedly retaliating against her for complaining about men being selected over women to officiate at higher-ranked matches.
- Motorola Solutions, Inc. (which makes police radios and other public-safety equipment) has sued one of its former senior executives in Illinois state court to stop him from heading up the public-safety business at Harris Corp. Motorola claims that the former executive has violated his non-compete by taking the new job and that he could use Motorola’s trade secrets (such as pricing strategies) in the new job.
- The Virginia Supreme Court (see Schuiling v. Harris) has ruled that an employment dispute between the owner of a car dealership and his housekeeper will have to be arbitrated even though their 2007 agreement to arbitrate specified that the arbitration would be administered by an organization that no longer exists. The VSC said that the provision that specified the organization could be severed while leaving the rest of the agreement to arbitrate intact and that, under Virginia law, that means that the trial court can appoint an arbitrator.
- The SEC is seeking comment on proposed rules (see them here) that would require public companies to disclose comparisons between the total compensation of their chief executive officers and the median compensation of all of their other employees. The rules would not apply to companies with less than $1 billion in annual revenue or less than $75 million in securities held by the public.
- Finally, as we tweeted yesterday, the Fourth Circuit Court of Appeals has held that a deputy sheriff in Hampton, Virginia had a First Amendment right to “like” his boss’s political opponent on Facebook without being fired for it.
This week in Suits by Suits:
- Merrill Lynch reportedly reached a $160 million settlement in a class action discrimination lawsuit brought by former employees alleging that the brokerage firm systematically steered its African-American financial advisors away from the highest-earning clients and portfolios, resulting in systematic disparate application of the firm’s facially neutral “pay-for-production” compensation schedule.
- We’ve previously told you about Massachusetts House Bill No. 1715, which, if enacted, would establish that noncompete clauses of six months or less are presumptively reasonable, while essentially prohibiting the enforcement of such clauses over six months in length unless certain narrow statutory exceptions apply. Discussion of the proposed bill -- which already has the endorsement of Gov. Deval Patrick – heads to a hearing before the state’s Joint Committee on Labor and Workforce Development next Tuesday, Sept. 10. We will of course keep you apprised of any developments.
- The state legislature in Pennsylvania is considering a bill, S.B. 300, that would add “sexual orientation, gender identity or expression” to the Pennsylvania Human Relations Act (P.L. 414, No. 51), which currently prohibits discrimination by employers on the basis of race, color, religious creed, ancestry, age or national origin.
- Continuing the public debate over say-on-pay: this week, the liberal think-tank Institute for Policy Studies released a study showing that nearly 40% of the country’s highest-paid CEOs “eventually ended up being fired, paying fraud-related fines or settlements, or accepting government bailout money,” suggesting that companies aren’t receiving much bang for the buck.
- Over at Bloomberg’s Labor and Employment Blog, Patrick Dorrian has a nice summary article up which surveys the landscape of increased religious discrimination cases brought before the EEOC; go check it out.
- Finally, we’re not sure if HR.BLR.com’s legal editor, Holly Jones, is reading our “State-by-State Smackdown” series or not – but she’s written a handy checklist for employers looking to draft an enforceable noncompete clause that incorporates many of the stories we’ve been covering here.
Even in the pre-Labor Day lull, things still happen here at the Suits by Suits Global Operations Center in our Nation’s Capital. This week, we welcomed a new panda cub at the National Zoo, and celebrated the 50th anniversary of the famous March on Washington for Civil Rights, which remembered Martin Luther King Jr.’s historic “I Have A Dream” speech.
Things happened elsewhere in the broader world of disputes between executives, other employees and employers, too, including:
- The news anchor is still mad-as-h-e-double-hockey-sticks, and he’s not going to take it anymore: We’ve covered the public and somewhat bitter dispute between TV newsman Larry Connors and his former employer KMOV-TV in St. Louis; now, Connors has sued the station for defamation.
- J. Edgar Hoover, please call your office: An FBI special agent alleges the bureau retaliated against him after he reported that two colleagues had “allegedly engaged in sexual misconduct in addition to a ‘clear pattern of fraud, waste and abuse over a period of years.’”
- And another involving the FBI: Media giant Thomson Reuters is stridently rejecting a former employee’s argument that he was fired after he leaked information about alleged insider trading violations to the FBI. The company’s motion to dismiss the suit also says the former employee doesn’t qualify as a whistleblower under Dodd-Frank. Interesting fact about our modern trading exchanges: the case involves the disclosure of some economic data Thomson Reuters compiles to certain customers two seconds before others get it.
- Maybe he tried to steal that nasty Mucinex guy: A cough syrup manufacturer lost its bid to reinstate claims for breach of contract and unfair competition against a former employee when a New Jersey appellate court affirmed the lower court’s dismissal of them. The court ruled that the confidentiality provision in the manufacturer’s employment agreement was too broad to be enforceable under New York’s law, which applied to the dispute: “In sum, the confidentiality provision is unenforceable under New York law because it is overly restrictive in time and scope, does not further a legitimate business interest, is contrary to established public policy, and is unduly burdensome” to the employee. No word on any other side effects.
- Smashing a printer with a baseball bat may no longer be the real problem departing employees pose: “Half of all departing employees retain confidential company files following their termination,” concludes a study by Symantec reported here.
- “No severance pay but still crazy rich”: That’s the headline on this CNNMoney article about retiring Microsoft executive Steve Ballmer, and it says it all. The article explains that Microsoft doesn’t have retirement or severance for its executives, but Ballmer won’t be complaining too loudly: as the 22nd richest person in America, his Microsoft shares alone are worth over $11 billion.