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Showing 92 posts in The Inbox.

The Inbox - September 12, 2014

The court of public opinion giveth, and taketh away.  You may recall that we reported on the reinstatement of Arthur T. Demoulis as Market Basket’s CEO, following weeks of customer and employee advocacy for the chief.  Public opinion, in the case of Desmond Hague, cut the other way in unrelenting fashion.  Mr. Hague, president and chief executive of Centerplate, a catering company servicing sports and entertainment venues, was captured on video kicking and abusing an otherwise docile Doberman Pinscher puppy.  The Washington Post reports that when the footage made its way to the SPCA of British Columbia, it quickly went viral and users of social media demanded his resignation.  Initially, Centerplate dismissed the incident as a personal matter.  As media attention increased, Centerplate announced that Mr. Hague would undergo counseling and community service.  The masses remained unimpressed, and as the pressure mounted, Mr. Hague was ultimately removed from his position.  Given the power of social media, it appears that the court of public opinion has rendered its verdict.

The National Law Review, citing the recent lawsuit filed by TrialGraphix Inc. against its competitor FTI Consulting, Inc. in the New York Supreme Court, offered helpful tips to employers on both sides of the battle over poached employees.  In this case, four high-ranking employees conspicuously left TrialGraphix for FTI Consulting.  As in similar suits filed by Booz Allen and Arthur J Gallagher Co. (which we discussed here), claims of corporate poaching usually involve claims of trade secret theft and interference with client business relationships.  The article highlights the importance of clearly-worded, reasonably-framed restrictive covenant agreements, safeguarding data upon the employee’s departure, and requiring employees to formally acknowledge the return of all company proprietary information and devices.  Similarly, employers seeking to hire these employees should review any non-compete agreements to ensure compliance while also requiring the employee to refrain from using the previous employer’s confidential information or trade secrets.  Non-disparagement agreements can also go a long way to prevent ill will between the old and the new employers. Read More ›

The Inbox - August 29, 2014

It’s only a matter of time before the traffic swells return to D.C. after a blissful summer of light, breezy roadway locomotion.  As the holiday weekend begins to take hold, ushering in the anticipated congestion, here are a few highlights from around the web to ease you into the long weekend. 

Departing employees leaving for the greener pastures of a rival in their industry might see red when the former employer suspects foul play and takes action.  Such was possibly the case when Arthur J. Gallagher Co. sued three of its former insurance executives in New York federal court as well as Howden Insurance Services Inc., the rival that inherited the trio.  According to Law 360, AJG claims that the executives conspired to stagger their departure dates, steal proprietary information, and lure clients away to Howden.  AJG attributes the projected $700 million loss in revenue in 2014 to business redirected to Howden upon their departures.  AJG first seeks to enjoin Howden from soliciting or working with 13 of AJG current and former clients, and to bar the use of trade secrets allegedly taken from them.

Booz Allen Hamilton Inc., a Virginia-based consulting firm known for its lucrative government contracts business, sued former employees last year in a New Jersey district court for conspiring to steal proprietary information from the company.  According to Washington Business Journal,  Booz Allen recently amended its complaint to name Deloitte and some of its senior executives in the suit, claiming that they obtained proprietary information about salaries, roles, and security clearances of key employees for the purpose of luring them, their intellectual capital, and the potential business stream to Deloitte.  The Booz Allen team was devoted to the Instructional Development and Immersive Learning (IDIL) capability which invested in and developed 3-D modeling, animations, and interactive simulations.  Read More ›

The Inbox - August 8, 2014

A recent decision from the Third Circuit proved a boon to employers facing the dangers of class arbitration in costly wage/hour disputes.  In its decision, the Third Circuit determined that courts, rather than arbitrators, should decide whether class arbitration exists in the absence of specific language in the arbitration agreement.  Employers generally oppose class arbitration because of arbitrators’ tendency to allow them, and the low prospects of overturning an unfavorable arbitration decision.  The longer-term consequences of the decision also bode well for employers who seek to insert class waivers in their arbitration agreements.  Law 360 interviewed Steven Suflas, a Ballard Spahr partner, who opined that employers can now take solace in the fact that a court will likely enforce class waivers found in arbitration agreements. 

Speaking of upholding class waivers in arbitration agreements, the California Supreme Court’s recent Iskanian decision did just that.  However, the court did carve out a general exception to the rule, stating that employers may not bar arbitration of claims brought under the Private Attorneys General Act (PAGA) as a matter of California public policy.  As if on cue, plaintiffs in a federal putative wage class action against CarMax Auto Superstores California LLC filed new state claims under PAGA, claiming they could not be arbitrated despite being ordered to arbitrate other claims on July 2.  As reported by Law 360, CarMax argues that plaintiffs are seeking to avoid the arbitration order with the state PAGA claims while plaintiffs maintain that the suits are substantially different.  Read More ›

The Inbox - August 1, 2014

Just when government whistleblowers hoped retaliation was on the decline following the passage of the Whistleblower Protection Enhancement Act, there appears to be a 2.0 version out, and it’s coming with a vengeance.  The latest wave in retaliation comes in the form of criminal investigations lodged by government agencies against truth-telling employees.  Rather than risk detection with a baseless termination or demotion, these employers have increasingly begun to wage criminal investigations, said Tom Devine, legal director for the Government Accountability Project in an interview with Government Executive.  Devine stated that such actions are a scary, dangerous trend, and that forcing someone out of a government position through criminal investigations could forever damage the employee’s prospects for future employment.

NYG Capital LLC made two headlines this week when a former intern accused its CEO, Benjamin Wey, of sexual harassment and wrongful termination, among other things.  The plaintiff, Hanna Bouveng, a Swedish native, was working in the US on a J-1 visa when the alleged actions took place.  Upon her termination, Bouveng alleges that Wey continued to stalk, harass and malign her reputation.  Meanwhile, as also reported by Law 360, a former graphic design artist was terminated shortly after cooperating with attorneys investigating Bouveng’s charges against Wey.  Yonatan Weiss lent credence to Bouveng’s accusations and claims he was fired for being truthful during interviews on the subject. Read More ›

The Inbox: July 18, 2014

We’re in the midst of summer and the news outlets are replete with anti-compete and whistleblower developments.  But before we get to those, let’s turn our attention to China:

If the dog days of summer here in the U.S. aren’t sweltering enough, imagine what they must feel like in the bustling, smog-laden cities of China. The Wall Street Journal reports that Coca- Cola Co. offers “environmental hardship pay” to some employees as a condition for relocating to some of China’s cities. Ed Hannibal of the HR consulting firm, Mercer LLC, indicates that it is not uncommon for multinational companies to offer the extra pay to incentivize workers to relocate to polluted cities. It helps to offset severe living conditions and ensure the company’s continued presence on the ground. 

These days it seems employers face an uphill battle to see non-compete agreements prevail in court.  Recently, a Louisiana state court carefully examined the terms of a non-compete in Gulf Industries, Inc. v. Boylan (La. App. 1 Cir. June 6, 2014).  The National Law Review reports that the employer in this case inserted a two year non-compete provision into a one-year employment contract. According to the Court, even though Boylan’s employment extended two years past the date specified in the employment contract, the non-compete provision kicked in when the one year employment term was satisfied. The employer sought to extend the non-compete, arguing that it did not take effect until Boylan resigned. The Court disagreed and held that the non-compete had run during Boylan’s continued employment with the company. Little did he realize at the time, but Boylan was quite the multi-tasker. Read More ›

The Inbox - Independence Day Edition

Happy 4th of July! While many Americans enjoy a festive day of parades, barbecues and fireworks, let’s see if this week’s highlights spark your interest:

  • The American Apparel/Dov Charney feud seems set to implode as the parties fire missiles and missives at one another. According to Fortune, Mr. Charney requested a special shareholder meeting in an attempt to increase the number of sympathetic directors on the board while also reporting in a regulatory filing that he is working with investment firm Standard General to amass a controlling interest. Meanwhile, American Apparel responded by adopting a poison pill which would cap a shareholder or group of shareholders interest at 15 percent.
  • Bloomberg reported that the former employees of Goldman Sachs, who have alleged gender bias in their suit against it, ignited a class certification request on Tuesday. In support of their motion, the plaintiffs argued that female vice presidents and associates were systematically paid and promoted less than their male counterparts in the investment banking, management and securities divisions since September 10, 2002.   
Read More ›

The Inbox – World Cup Edition

On Thursday, even though the United States lost to Germany, they moved on from the Group of Death to take on Belgium in the World Cup round of 16. In honor of US Soccer’s achievement, we are glad to present this footy-themed edition of the Inbox.

  • The New York Post continues to report on the controversy surrounding last week’s decision to terminate American Apparel CEO Dov Charney. In this piece, one of our editors achieved his goal of being quoted in that paper, although neither he nor Charney got a clever rhyming front-page headline.
  • A New Jersey judge issued a red card to a shareholder lawsuit against Johnson & Johnson, tossing the case out on summary judgment. MassDevice.com reported that the judge decided that J&J acted in good faith when it decided not to claw back $40 million that had been paid to its former CEO, William Weldon.
Read More ›

The Inbox: June 20, 2014

Whiste against a blue suit tieThis has been a noteworthy week here at Suits by Suits for developments in the law concerning whistleblowers; in addition to our in-depth articles we published this week, we also saw the following developments:

Of course, not everything that happened this week involved whistleblowers; here are a few other Suits by Suits that may be of interest:

  • The U.S. Supreme Court granted certiorari in a case that will determine whether mortgage loan officers are “employed in a bona fide executive, administrative, or professional capacity” and thus exempt from mandatory overtime pay requirements.
  • Finally, the Washington Post documented the fallout over years’ worth of complants about American Apparel’s CEO Dov Charney (as well as photographer Terry Richardson) for multiple alleged instances of sexual misconduct.  Despite founding the company, the American Apparel board of directors ultimately suspended Charney for a 30-day cure period as required by contract before he can be terminated.  Charney’s bizarre conduct is alleged to include wandering through American Apparel offices in his underpants, masturbating in front of a (female) reporter, among other behvaiors that led one plaintiff to describe his leadership as a “reign of sexual terror.”  The Post also called out Richardson’s “aesthetic of hipster softcore pornography” (which it then documents by reproducing a half-dozen advertising shots of young-looking models).

The Inbox - Friday the 13th of June Edition, 2014

  • Netflix is challenging the lawsuit filed against it by its former content acquisitions executive Jerry Kowal, whom Netflix fired before he could resign to work for Amazon last summer.  Kowal's claims against Netflix - which we examined earlier - include defamation.  Netflix now claims that Kowal took its confidential documents - downloading them while on vacation weeks before he left for Amazon.  
  • A 48-year-old former director of Disney's story department has sued Disney in Los Angeles Superior Court for age discrimination, claiming that Disney fired him after 26 years and replaced him with a woman in her late 20s or early 30s.  
  • Twitter's COO Ali Rowghani resigned this week, although he will continue as an employee of the company.  Reportedly, he had little to do after CEO Dick Costolo took on more responsibilities at the struggling company.  Rowghani and Costolo exchanged friendly tweets about his resignation, so we would be surprised to see a suit by suit emerge.
  • SunTrust Bank is paying $300,000 to settle a charge by the EEOC that one of its branch managers in Sarasota sexually harassed three women who reported to him by, for example, allegedly repeatedly trapping one of them at the teller's desk using his body and telling another that she should wear a bathing suit to work.

The Inbox: Sunny Summer Skies Edition

Picture of sunny skySummer humidity has arrived here in the mid-Atlantic, but the skies are blue and the thermometer isn’t creeping above 90 as of yet.  Here are some tidbits of executive-employer news to print and read in the shade when it’s time to cool off: 

  • Not that the White House needed more controversy right now, but the Office of Special Counsel is investigating 37 whistleblower claims arising from 19 different Veterans Administration facilities, reports Jack Moore of Federal News Radio.  The range of misconduct that the whistleblowers allegedly disclosed includes “improper scheduling practices, the misuse of agency funds and inappropriately restraining patients.”
  • Chris Cassidy of the Boston Herald writes that the Massachusetts House Speaker, Robert DeLeo, and the state’s governor, Deval Patrick, are clashing over noncompete agreements.  Patrick has been pushing to ban the prohibitions, while DeLeo and his allies argue that they should remain because employees have shown a willingness to live with them.
  • “I’m Number One!”  In the CEO world, the top-ranked executive in terms of compensation is Charif Souki of Cheniere Energy Inc., who raked in $142 million last year.  Now, Souki’s compensation has sparked a disgruntled shareholder lawsuit, according to Zain Shauk, Caleb Melby and Laura Marcinek of Bloomberg.  The lawsuit has led Cheniere to push off its annual meeting by three months.  Shareholder advisory firms are telling the company’s stockholders that they should not vote to approve further expansion of its executive compensation.
  • Darren Heitner, writing for Forbes, brought us the story of a football agent’s lawsuit against Octagon, his former employer.   Doug Hendrickson, who now works for Relativity Sports, alleges that the noncompete provision in his employment agreement with Octagon is an illegal restraint of trade under California law.  Hendrickson has represented Marshawn Lynch in the past; no word as to whether his lawyers are familiar with Beast Mode.