Top Issues in Executive Disputes to Watch in 2016
- The Impact of the Yates Memo
In September 2015, the Department of Justice shook the white collar world by releasing the now-famous Yates Memo. The memo, authored by Deputy Attorney General Sally Yates, places a new emphasis on identifying individual accountability for corporate wrongdoing. When companies investigate wrongdoing, the memo says, they must provide “all relevant facts” related to the individuals involved in corporate misconduct to obtain cooperation credit. And corporate settlements with the government won’t protect the individuals (with rare exceptions).
In 2016, we’ll start to see how the Yates Memo has reverberated throughout the Department of Justice and corporate America. Will the DOJ bring more individual white collar prosecutions? Will companies be less likely to cooperate with the government, given the increased prospect of individual prosecutions even if the company successfully settles? Will more individuals receive (or demand) legal assistance from their own counsel before giving interviews in corporate investigations? These are just a few of the unanswered questions to watch this year.
- The Supreme Court Tackles Employment Questions
The highest court in the land doesn’t address many employment cases, but when it does, its opinions get a lot of attention. In Green v. Brennan, the Court will decide whether the 45-day statute of limitations on “constructive discharge” employment discrimination claims begins to run when the employee resigns, or when the “last discriminatory act” occurs. The decision could bar employees from bringing these claims when they quit more than 45 days after their employer’s last alleged hostile act. And in Heffernan v. City of Paterson, the Court will rule on whether the First Amendment precludes the government from terminating a public employee when his supervisor perceives that the employee supports a political candidate.
- Prominent Disputes Take Center Stage
In fired coach Steve Sarkisian’s case against USC for discriminating against him based on his alcoholism – which we analyzed here – USC has fired back. It calls his suit "full of half truths" and "outright falsehoods,” and says he never even told it he was an alcoholic. Sarkisian’s suit will almost certainly continue to generate headlines. Dov Charney continues to battle American Apparel; he testified yesterday in the company’s bankruptcy in an effort to wrest back control of the company he founded. Just this month, a Viacom shareholder sued CBS and Viacom executives, alleging that they had breached their duties by paying 92-year-old Sumner Redstone too much money.
- Continuing the Attack on Noncompete Agreements
Employees keep fighting against noncompete and non-solicitation provisions that limit their ability to create or win new business when they leave their employers. For example, a South Dakota jury recently found that a Buick salesman was fraudulently induced to sign a non-compete that barred him from starting his own dealership within 200 miles. And companies keep bringing suit to enforce these contracts: a Florida bank just sued a former exec and his new bank for breaching his deal.