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.
Dov Charney’s impact on American Apparel’s bottom line continues to manifest itself at every headline-making turn. Most recently, the beleaguered company released its second quarter earnings report. CNN Money reported that sales remained relatively flat, and the company reported a $16.2 million net loss during the period. Meanwhile, the company saw a $2 million increase in professional fee expenditures, owing to Mr. Charney’s suspension. According to Fashionista, the company concurrently reduced its marketing and advertising expenses by $2 million. One might wonder if this begs the question. Isn’t this the time for the company to generate all the good press it can?
A former senior counsel at Teva Pharmaceuticals USA Inc. sued the company, alleging wrongful termination as reported by Law 360. Kai Lyman, the plaintiff, asserts that Teva made the termination decision when it became aware that his wages were to be garnished for spousal and child support stemming from divorce proceedings. Although Mr. Lyman was initially told his position was being eliminated, he discovered that the company began recruiting attorneys to perform similar work once his settlement agreement expired. Mr. Lyman seeks reinstatement, back pay, and compensatory and punitive damages.
Following up on our report of Market Basket’s ousted (and beloved) CEO, Arthur T. Demoulis, it seems the collective voice of the people was heard. Mr. Demoulis, revered as a kind-hearted, generous leader, was reinstated as CEO following six weeks of feverish protest, long picket lines, and spirited employee rebellion. According to Christian Science Monitor, the long-standing feud between Mr. Demoulis and his cousin, Arthur S. Demoulis, will come to an end as Arthur T. and his sisters finalize the deal to buy out Arthur S.’s 50.5% stake for a breezy $1.5 billion.