The Inbox - May 10, 2013
This week in Suits by Suits:
- Credit Suisse Group AG sued its former Vice President of Emerging Markets, Agostina Pechi, seeking a temporary restraining order barring Ms. Pechi from soliciting Credit Suisse clients. According to the complaint, Ms. Pechi -- now employed by Credit Suisse's competitor, Goldman Sachs -- engaged in "an after-hours document raid" of confidential information from Credit Suisse which she allegedly emailed to her personal account before leaving the firm. One interesting wrinkle here is that Ms. Pechi had an arbitration clause in her employment agreement requiring arbitration of all employment-related grievances, but Credit Suisse filed suit, claiming that "a court order was needed to prevent [it] from being harmed in the interim." We've previously suggested that mandatory arbitration clauses may not always be a benefit to employers; and, if you're curious as to whether Credit Suisse's filing could be construed as a waiver of its right to arbitrate, you might want to check out our two-part series on waiver here (Part 1) and here (Part 2).
- We've previously analyzed the "say-on-pay" provisions of Dodd-Frank (and see also our this Inbox item); now we have a new wrinkle. A few days ago, Heinz's shareholders passed a nonbinding vote to deny outgoing CEO Bill Johnson a $56 million golden parachute that includes accelerated stock options. Advisors say that the vote "doesn't hold up the deal [to take Heinz private]" which we interpret to mean that Johnson will get his money.
- Residential Capital, LLC -- a bankrupt mortgage company owned by Ally Financial, Inc., which is in turn majority-owned by the U.S. Government -- has requested approval from a New York Bankruptcy judge to pay $7.8 million in severance pay to outgoing executives, with payments capped at $136,000 for two senior execs. The motion notes that the employees would have been "entitled to sums well in excess of the $136,000 cap" had they remained with the company.
- A case study in why clawbacks are hard: Anderson County, South Carolina is deciding whether to continue to pursue litigation to force its former county administrator, Joey Preston, to repay a $1.1 million severance package he received in 2008 in light of allegations of ethical violations, fraud, and breach of fiduciary duties. However, a state court found in Preston's favor on Thursday and required the county to pay Preston $700,000 in attorneys' fees. Anderson County now estimates that it has spent $3 million trying to recover the $1.1 million from Preston.
- Finally, Bloomberg BNA has posted a nice summary article analyzing the Supreme Court's April 24, 2013 decision in University of Texas Southwestern Medical Center v. Nassar, which addresses various evidentiary issues in the context of an employee's Title VII retaliation claim.