Andrew P. Torrez

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P. Andrew Torrez, named one of Maryland's star lawyers by Benchmark, is the founding partner of The Law Offices of P. Andrew Torrez, LLC.‎


  • The Inbox: June 20, 2014

    | Zuckerman Spaeder Team

    This 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:

    • The big news – which we tweeted about yesterday – is that the U.S. Supreme Court issued its opinion in Lane v. Franks, a case we’ve been watching with considerable interest.  In a unanimous (9-0) decision, the Supreme Court ruled that whistleblowers are protected against retaliation by their employers when they are called to testify in court about corruption, departing from past cases in which employees were held not to have First Amendment rights to discuss matters learned at their jobs.  Writing for the unanimous Court, Justice Sotomayor held that such testimony is in fact protected by the First Amendment because “Anyone who testifies in court bears an obligation, to the court and society at large, to tell the truth.”  We’ll be analyzing this decision in depth in the coming days.
    • The Supreme Court’s decision in Lane v. Franks comes on the heels of a survey conducted by the federal Office of Personnel Management showing that nearly 20% of federal employees are afraid of retaliation if they were to disclose “a suspected violation of any law, rule or regulation” by any government agency.  (61.2% affirmed that they felt free to disclose such violations without fear of reprisal.)  The Washington Post analyzed these results in the context of the ongoing controversy regarding the department of Veterans’ Affairs; the Acting Secretary of the VA, Sloan Gibson, has promised to protect any whistleblowers from reprisal.  Nevertheless, attorney Scott D. Gerber, writing in the Huffington Post, opines that the VA’s whistleblower protection program “is broken, too.”
    • Relatedly, the Wall Street Journal opined that recent activity and statements by the Securities and Exchange Commission (SEC) may signal that the agency is prepared to take stronger measures against employers who retaliate against whistleblowers.
    • Illustrating the SEC’s get-tough policy, earlier this week, it fined a hedge fund, Paradigm Capital Management, for retaliating against a whistleblower that reported alleged “improper transactions” by the hedge fund to the SEC.

    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).
  • Second Circuit To Weigh Whether Whistleblower Protections Extend Internationally

    | Zuckerman Spaeder Team

    While we’re talking about whistleblowers, it’s worth noting that two days ago, the U.S. Court of Appeals for the Second Circuit heard oral argument on appeal from the a federal district court’s opinion in Meng-Lin Liu v. Siemens AG, 978 F.Supp.2d 325 (S.D.N.Y. 2013). This case raises the significant question as to whether the anti-retaliation provisions of the Dodd-Frank Act, 15 U.S.C. § 78u-6(h)(1)(a), apply to an employee who is terminated by a non-U.S. corporation that does business in (and is regulated by) the United States.

  • Worker Mobility in Silicon Valley: The End of the “Handshake” No-Hire

    | Zuckerman Spaeder Team

    As long-standing readers of Suits by Suits know, California is at the forefront of the “state-by-state smackdown” regarding covenants not to compete, having prohibited essentially all such clauses by statute.  (You can refresh your recollection by reviewing our discussion of California law, here.)

    Consequently, one of the arguments deployed by other states looking to restrict or ban noncompetes is that the business climate created in California encourages worker mobility, and that climate in turn is attractive to the technology sector (and in particular, to technology start-ups), who depend upon “poaching” away top talent that may be underpaid at a competitor.  You can read these arguments in more depth here (part 1), here (part 2), and most recently here (part 3).

    The common thread that runs through these arguments is that California encourages worker mobility, and that mobility, in turn, is good for Silicon Valley.  The argument has some appeal.

  • Of Red and Blue Pencils: Three Ways In Which States Can Respond to Defective Noncompete Clauses

    | Zuckerman Spaeder Team

    Even if you’re only an occasional reader of Suits by Suits, you know that we’re committed to engaging in a practical discussion of the varying ways in which an employee’s covenant not to compete might be legal in one jurisdiction but unenforceable in another.  It’s our view that both employers and employees need to know about these potential landmines where the employer operates in multiple U.S. states.

    But knowing what the substantive law in each state is regarding noncompetes is only half of the battle.  Affected parties need to know not only whether a court will determine that a particular noncompete clause is unenforceable as written, but also what that court will do after it makes such a determination.  And that’s what this post is all about.

    Broadly speaking, a court can do one of three things with a defective covenant not to compete:

  • State-by-State Smackdown News: Massachusetts to Decide Whether to Ban Noncompetes

    | Zuckerman Spaeder Team

    Momentum continues to build in Massachusetts for that state to adopt the California model and ban the enforcement of employee covenants not to compete in the state.  Last fall, we told you that Gregory Bialecki, Secretary of Housing and Economic Development under Gov. Deval Patrick (D), went on record as saying that the administration supports the “outright elimination of enforceability” of noncompetes in Massachusetts in a story broken by Scott Kirsner of the Boston Globe.

    Of course, there is often a world of a difference between a politician “supporting” something and being willing to actually spend political capital to try and bring about actual legislation.  At first, Gov. Patrick’s support was limited to 2013’s H.B. 1715, which (as we explained here, over a year ago) would not have prohibited noncompetes, but would have instead created a statutory regime that prohibited such clauses that exceeded six months in length.  That bill failed to pass the legislature in 2013.

  • The Inbox: April 4, 2014

    | Zuckerman Spaeder Team

    We here at Suits By Suits used up pretty much all of our literary creativity in drafting last week’s Inbox, a stirring tribute to the late, great director John Hughes as seen through the cast of his seminal film, The Breakfast Club.  So this week, in the words of Joe Friday, you get just the facts, ma’am – which is to say, a terse rundown of the week’s developments delivered in a gruff, no-nonsense style:

    • This Wednesday, the U.S. Occupational Safety and Health Administration (OSHA) issued an interim final rule and public requests for comments regarding the employee protection provisions of the Consumer Financial Protection Act of 2010, the portion of the Dodd-Frank Act that established the Consumer Financial Protection Bureau to protect whistleblowers who report violations of various consumer protection laws.  The interim final rule describes the process that OSHA investigators and administrative law judges will take in evaluating whistleblower complaints under this statute, and mirror regulations OSHA has implemented over the last few years with respect to other whistleblower statutes under its jurisdiction.
    • We’ve previously discussed the Illinois appellate court’s 2013 decision in Fifield v. Premier Dealer Services, which altered the landscape of noncompete law in Illinois by seemingly declaring a bright-line rule that an employee must have worked for his or her employer for two years in order for the employer to subsequently enforce a noncompete clause.  This week, attorneys writing in the National Law Review analyze a recent decision by a federal District Court judge applying Illinois law, Montel Aetnastak v. Miessen.  In that case, the Court refused to follow Fifield and apply a “bright-line” two-year test, instead holding that the appellate court holdings have been “contradictory” and that there has been no “clear direction from the Illinois Supreme Court,” thus permitting that court to enforce a noncompete clause against an employee who had worked for her employer for only 15 months.  We will be watching to see how the state courts respond; we wouldn’t be surprised to see a certified question to the Illinois Supreme Court to resolve the status of Fifield with finality.
    • While the Hobby Lobby case has garnered national attention these past few weeks, a new dispute between religious employers and employees may be brewing in Hawaii.  The Roman Catholic Church has rolled out a new Teacher Employment Agreement that permits teachers at 36 parochial schools in Hawaii to be terminated for “living immorally,” defined as “adultery, homosexual activity, same sex unions, procuring, abetting or promoting abortion, euthanasia or in vitro fertilization, and unmarried cohabitation.”  The Hawaii Civil Rights Commission will scrutinize the contract to determine if the new contract violates Hawaii’s state law protections against discrimination based on marital status and sexual orientation, particularly with respect to teachers who teach purely secular subjects.  The superintendent of Hawaii Catholic Schools has argued that even secular teachers at parochial schools are “role models whose job is also a ministry,” thus falling under a ministerial exemption.  We’ll continue to monitor this situation.
    • Relatedly, a New York appellate court upheld a $1.6 million verdict (including $1.2 million in punitive damages) against Gloria’s Tribeca, Inc. and chief owner Edward Globokar, who own and operate a chain of Mexican restaurants in New York City called “Mary Ann’s.”  The restaurants would hold weekly, mandatory “prayer meetings” in which chef Mirella Salemi was insulted, told she was “going to hell” for being gay, and, in at least once case, was instructed to fire another employee for being gay.  (Salemi refused.)  The appellate court rejected the restaurant’s First Amendment claims, holding instead that the practices violated the New York City Human Rights Law.

    Oh, and just one more thing:

    • Long-standing consumer advocate (and perennial Presidential candidate) Ralph Nader has launched “Nader’s Penny Brigade,” a grassroots organization with the goal of bringing attention to what Nader calls the growing disparity between executive compensation and average worker pay.  The first item on Nader’s agenda has to do with the accounting measures used in how large corporations accrue profits in relation to bonuses paid to top executives; an issue that we’ve previously highlighted in this space.  The organization’s name stems from Nader’s plea that shareholders donate one penny for every share that they own to fund oversight.  We just thought you might like to know.
  • More on Non-Competes in Florida: Defining the “Legitimate Business Interest”

    | Zuckerman Spaeder Team

    In researching and writing Monday’s blog post, I came across another unique wrinkle in the Florida statute that governs covenants not to compete, § 542.335 of the Florida Statutes.  I think it's worth examining that provision in more detail as part of our ongoing efforts to educate employers and employees as to the varying state-by-state nuances in different jurisdictions that can affect the ultimate questions as to whether and how that state will enforce an employee’s covenant not to compete.

  • The State-By-State Smackdown - New York vs. Florida: When Two Seemingly Similar Things Are Not The Same

    | Zuckerman Spaeder Team

    In our recurring “State-by-State Smackdown” series on the evolving law with respect to covenants not to compete, we’ve described the traditional balancing-test approach that is the law in the majority of jurisdictions as the Legitimate Business Interest or “LBI” test.  In understanding this shifting landscape, we’ve typically highlighted statutes and/or judicial opinions in jurisdictions that have begun to shift away (or even depart entirely) from the classical LBI analysis.

    Today, we’re doing something a little different, taking our cue from a recent New York state appellate decision:  Brown & Brown, Inc. v. Johnson, 980 N.Y.S. 2d 631 (App. Div., 4th Dep’t, February 7, 2014).  Read on.

  • The Inbox: March 7, 2014

    | Zuckerman Spaeder Team

    The biggest news of the week in Suits by Suits is the Supreme Court’s decision in Lawson v. FMR LLC, which was handed down on Tuesday.  Our Jason Knott weighed in with two excellent, in-depth pieces examining both the majority opinion as well as the concurring and dissenting opinions (including the very unusual dissenting lineup of Sotomayor, Kennedy, and Alito).  We think this is a groundbreaking decision for whistleblowers and employers that will continue to affect the legal landscape for years.  Other analysts have weighed in on Lawson, including the ABA and The Wall Street Journal (subscription required).

    Of course, that’s not all that happened in the news this week:

    • We’re monitoring a recently-filed lawsuit by AK Steel Corp., alleging that its former employee, Thomas Miskovich, violated his noncompete contract and tortiously interfered with AK Steel’s business when he jumped ship for Novelis Corp.  Norvelis has responded that it is in the aluminum business – not the steel business – and thus is not a “competitor” of AK Steel.  A federal district court in Ohio rejected AK Steel’s request for a TRO but will hear arguments for a preliminary injunction in two weeks; we’ll be sure to keep you posted.
    • Writing for Forbes, Steve Parrish has some practical advice for employers in crafting executive compensation packages that reduce tax burdens on employees, including the issuance of restricted stock that employees forfeit if they leave the company as a kind of “golden handcuff.”
    • But wait!  Before you rush out and draft lucrative new compensation packages, keep in mind that such packages remain a touchy subject among shareholders.  We’ve talked about the “say-on-pay” provisions of the Dodd-Frank Act on multiple occasions; this week, we saw something similar happen across the Atlantic.  After shareholders rejected a more lucrative compensation package, Julius Baer – a private bank based in Switzerland – reduced CEO Boris Collardi’s pay by nearly 11% in 2013.  And Rolls-Royce announced a plan to claw back any executive bonuses paid out to employees who subsequently come under investigation (“in the case of serious non-compliance with the Rolls-Royce code of conduct, reputational damage or gross misconduct”).
    • On balance, though, such reductions in executive compensation remain the exception, rather than the norm.  So while eyebrows were raised, we weren’t surprised to learn that GlaxoSmithKline PLC increased CEO Andrew Witty’s 2013 compensation by 63% despite ongoing investigations by the Chinese government into alleged kickbacks and fraud that have led to the arrest of four Glaxo executives in China.
    • And Witty isn’t the only executive to bring home the bacon; Wells Fargo’s CEO John Stumpf – already the highest-paid bank CEO in the U.S. – was awarded $1 million in restricted stock as part of his 2013 compensation, and, just days after RadioShack announced that it may close as many as 1,100 retail stores in light of its second straight annual loss, the company announced raises and bonuses for top executives, including a half-million-dollar retention bonus for CEO Joseph Magnacca.
    • Relatedly:  Excellus BlueCross Blue Shield – the largest not-for-profit insurer in New York – revealed earlier this week that it had paid outgoing CEO David Klein a $12.9 million retirement bonus and former CFO Emil Duda $10.95 million in retirement pay, which it says were “industry norms at the time the agreements were made.”  Key to the packages were noncompete clauses that were said to have kept the officers from working for Excellus’s competitors.
    • Putting it all together:  MoneyNews’s Dan Weil, analyzing a study performed for The Wall Street Journal, suggests that for purposes of awarding compensation bonuses, many companies are using non-standard methods of computing their earnings – particularly by excluding certain expenses that would otherwise affect the company’s bottom line under generally accepted accounting principles – in ways that reward executives for the upside but fail to calculate downside risks.  And Antony Jenkins, CEO of international financial giant Barclays PLC, suggests that executive bonuses are necessary to retain key staff; after Barclays cut compensation in 2012, nearly 700 high-level U.S. employees left, presumably for richer pastures.  Barclays reversed course and awarded increased bonuses in 2013 to avoid a “death spiral” of further departures.

As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.