Jason M. Knott

Many of the cases we talk about here on Suits by Suits are breach of contract cases brought by executives against their former employers.  Sometimes, however, the employer turns the tables, bringing an action against a former executive for breaching its confidences.  When that happens, the executive can find himself owing the company a lot of money, rather than the other way around.

Such was the fate of a former lawyer for Toyota named Dimitrios Biller, the subject of the Ninth Circuit’s recent opinion in Biller v. Toyota Motor Corp., 668 F.3d 655 (9th Cir. 2012).  

• Arbitration
• Breach of Contract
• Confidentiality
• Trade Secrets
• Whistleblowers

We previously covered former Yahoo! CEO Scott Thompson, who may have cost himself $10 million by inflating his credentials in a resume.   Resume problems are not a one-off in the world of Suits by Suits.

One way in which untruths on resumes can come to light is through a defense called the after-acquired evidence doctrine, which employers can assert in response to wrongful termination or discrimination claims.  

• After-Acquired Evidence
• Discrimination

The latest gold medalists in the race for our attention: 

• Not that Chick-fil-A needed more publicity, but Laura Hautala of the Los Angeles Times brought us the fascinating story of Adam Smith, chief financial officer of a Tuscon medical equipment manufacturer named Vante.  Smith went to the drive-thru of his local Chick-fil-A, told the employees that they worked for a hateful company, and then posted the confrontation on YouTube.  Shortly thereafter, Vante fired him.  In a press statement, Vante did not identify Smith’s ordering of free water as the straw that broke the camel’s back.

• Discrimination
• The Inbox
• Wrongful Termination

On Monday, we talked about how plaintiffs can prove pregnancy discrimination by direct evidence – the proverbial “smoking gun.”  Now, it’s time to tackle how a plaintiff can prove pregnancy discrimination under the McDonnell-Douglas test, through making a prima facie case of discrimination and then rebutting the employer’s assertion that it acted for legitimate, nonpretextual reasons.  Once again, the star of our hypothetical scenario is Marissa Mayer, the newsworthy new Yahoo! CEO.

• Discrimination
• Pregnancy Discrimination

Marissa Mayer is big news these days.  She’s the new Yahoo! CEO, at only 37 years old.  She’s also expecting her first child, and made waves when she told Fortune Magazine that her maternity leave would be a “few weeks long” and she’d “work through it.” 

All of the hullaballoo over Mayer’s career and personal life made the Suits by Suits team curious.  What if Mayer suffered repercussions at Yahoo! due to her pregnancy or upcoming childbirth?  How would she be able to prove that Yahoo! discriminated against her?

• Discrimination
• Pregnancy Discrimination

Tariq Hassan, the former Chief Procurement Officer for JP Morgan Chase (JPMC), is taking the bank to court.  In a suit filed June 15, he claims that JPMC fired him for investigating a “kickback scheme” involving the bank’s vendor management office and IT department.  Then, Hassan says, JPMC’s Chief Executive Officer, Jamie Dimon, and others at JPMC badmouthed him to Citigroup Global Markets when that company was considering hiring him, and Citigroup retaliated further against him for his whistleblowing by not hiring him.

• Whistleblowers
• Wrongful Termination

A rare news recap that has nothing to do with health care reform:

• Live Nation Entertainment has finally found harmony with its former chairman Michael Cohl, settling a dispute over a claim that Cohl owed it money under his severance agreement.  When Cohl left Live Nation in 2008, he agreed to pay $9.85 million over two years to buy parts of the business and get out from under parts of a broad noncompete provision.  Live Nation sued him in 2010, saying he still owed $5.4 million.  Marketwatch.
• An employee who insisted on getting paid under a severance agreement because he was competing with his former employer (apparently the severance agreement did provide for such payments) was socked with $40,000 in fees for his efforts after the trial court granted summary judgment for the employer, which argued that he was not competing with it.  Odd.  JD Supra.
• Daniel Foreman, an investment fund executive, filed suit against Cardinal Growth Corp., claiming that it misrepresented the value of funds when it asked him to help it find companies to invest in.  He seeks $82,000 in unpaid fees, as well as other payments.  AltAssets.
• The former chief executive of Extended Stay hotels was socked with a $100 million judgment in that company’s bankruptcy, based on a series of personal guarantees.  But he’s not taking the judgment lying down.  He’s sued Extended Stay’s bankruptcy lawyers, alleging that their malpractice and breach of fiduciary duty caused the judgment against him.  Thomson Reuters.

• Bankruptcy
• The Inbox

Today’s decision of interest, U.S. Electrical Services, Inc. v. Schmidt (D. Mass. June 19, 2012), involves everyone’s favorite strip-mall stop: the Dollar Tree. James Schmidt and Peter Colon wanted to sell lighting and fixtures to the Dollar Tree (presumably for more than $1.00). Their former employer, U.S. Electrical Services (USESI), wanted to stop them, because it wanted to bid on the same Dollar Tree lighting account and it didn’t want Schmidt and Colon using its confidential pricing information to make their bid. 

At the time USESI sued, the account was up for bid in only a few days. So USESI didn’t just file a complaint and seek damages. Instead, it asked for a preliminary injunction barring Schmidt, Colon, and their new employer, Munro, from competing for the business.

• Confidentiality
• Preliminary Injunction
• Trade Secrets

For a high-level executive leaving a company under less-than-ideal conditions, it’s as common as handing in keys to security and shutting down the computer for the last time.  In exchange for a severance payment, the executive is asked to sign the typical general release: “I hereby release my employer from any claims, liabilities, demands, or causes of action . . .”

Unsurprisingly, once an employee signs a general release, if he later sues, he is likely to face a quick motion to dismiss.  

• Motions to Dismiss
• Releases
• Severance Agreements

The latest developments in suits by suits:

• When Brian Wittenstein left his job as talent coordinator at Total Nonstop Action (TNA) Wrestling for TNA’s competitor, World Wrestling Entertainment (WWE), he apparently took a lot of TNA confidential information with him.  Now TNA is brawling with WWE and Wittenstein in court.   TNA’s lawsuit acknowledges that WWE told TNA that Wittenstein had given it the confidential information and fired him.  But TNA alleges that WWE conspired with Wittenstein to get the documents, delayed for three weeks before it told TNA about the disclosures, and is now using the secret details of Nature Boy Ric Flair’s contract to solicit him to join WWE.  PWInsider.com.

• Breach of Contract
• Confidentiality
• Summary Judgment
• The Inbox