Ah, the smells of the holiday season: fresh-cut evergreen trees, just-baked cookies and other goodies, bowls of tasty fruit punch.  Take a deep whiff wherever you are.  Breathe it in deep. 

But be careful about sniffing those smells, though. 

That is the apparent lesson from the Fifth Circuit Court of Appeals’ decision in Tonia Royal’s retaliation lawsuit against her employer, an apartment management company named CCC&R Tres Arboles.  The appellate court held that the trial court incorrectly gave the apartment company summary judgment, because too many material facts about the basis for Ms. Royal’s firing were in dispute.  And many of those facts relate to the behavior of other CCC&R employees, who Ms. Royal alleged sexually harassed her by sniffing her in a rather curious and uncomfortable manner.  

• Civil Litigation
• Discrimination
• Summary Judgment
• Wrongful Termination

From all of us here at Suits by Suits, we wish you and yours a very happy holiday season.  To keep you entertained over the next few weeks, we'll be featuring a number of our holiday and all-time favorite posts.

Kicking things off today, we revisit a popular series from this time last year, where we told you about the origins of Christmas as a holiday.  If you've ever been curious as to why celebrants drink spiced eggnog, decorate evergreen trees, or hang mistletoe, be sure to check out Part 1 and Part 2 of "The Origins of Christmas."  And if you want to know how that day and other social traditions turned into legal holidays, check out our post "Exactly How Many Holidays Do We Have, Anyway?"

If you feel we've missed anything, please drop us a line.  Happy holidays!

Here at the Suits by Suits World Last-Minute Gift-Buying-Wrapping-And-Shipping Center, we’re scrambling to finish preparations for our big holiday celebration, but as always, employment-related disputes are filling our time:  The eight maids-a-milking are whispering about Title VII violations, the nine ladies dancing are insisting on an ERISA-type plan for future health costs stemming from dancing-related injuries, the ten lords-a-leaping and eleven pipers piping are just getting in everyone’s way, and the twelve drummers drumming claim that putting them last on the list is our way of retaliating against them for blowing the whistle on harsh working conditions in an offshore toy factory owned by this jolly red friend of ours. 

And all of them wonder how it is that they were gifted to us without violating slavery and human trafficking laws.  Bah humbug! No, that’s too strong – it is our favorite holiday. f

In any event, here are the most interesting news items that came across our transom in the past week: 

• For those of us who write about executive employment disputes, the case of Missouri anchorman Larry Connors has been the gift that kept giving all year, raising interesting issues – now, he’s filed a discrimination suit against the TV station that fired him.
• A fired real estate executive received a holiday gift this week when the Second Circuit Court of Appeals reinstated her retaliation claim against her former employer, real estate manager Andalex.  Andalex didn’t walk away without a stocking-stuffer, though: the appellate court affirmed a trial court’s dismissal of the executive’s hostile work environment claim and her claims for gender and national origin discrimination. 
• In a drama that seems like it’s gone on as long as Masterpiece Theater but could use a little Law & Order: UK to move things along, the fallout from the BBC’s executive pay scandal continues to rock the United Kingdom. 
• Speaking of overseas developments, here’s a thoughtful article on things to consider when you send employees overseas.
• Internet-based travel company Expedia is facing an investor’s derivative lawsuit arising out of its award of stock to CEO Dara Khosrowshahi.  The investor alleges the board couldn’t give Khosrowshahi the stock as a bonus because the company hasn’t met the required targets to authorize it.   
• Add Vermont to the list of states looking at tightening their whistleblower protections.
• The Wall Street Journal has this interesting piece on how non-competes can hamper second and third act careers for talented folks.    

• The Inbox

When the dog bites

When the bee stings

When I'm feeling sad

I simply remember my favorite things

And then I don't feel so bad.

Just from looking at the lyrics, your mind will automatically add in the tune.  Rodgers & Hammerstein wrote it, Mary Martin, Julie Andrews, and even Carrie Underwood have performed it: the classic song “My Favorite Things” from The Sound of Music (which for mysterious reasons is now associated with Christmas, even though the musical isn’t about Christmas at all). 

But I bet few people know how I interpret the song.  I’m an insurance coverage lawyer – so my favorite things aren’t brown paper packages tied up with string or schnitzel or bright copper kettles.  My favorite things (or, at least, the things I use every day) include principles that – if some thought is given to them before a claim comes about, or in presenting the claim when it happens – can help executives and the companies that hire and fire them have access to the right insurance for the disputes that develop between them.  So, in that spirit, this post looks at some of those executive-employment-related insurance issues that we’ve reviewed throughout this year. They’re all things that business leaders should think on as they consider a company’s insurance strategy.  You could think of it as a cream-colored pony with an insurance treatise on its back.  But I’ll make it much more appealing than some book – more like a crisp apple streudel.  

• D&O
• Insurance

Sometimes, the things that seem most straightforward and widely understood are the very things people tend to forget – or misunderstand – the most.  These things that “go without saying” often actually need to be said. 

Take the case of Professor Andrew Ortony of Northwestern University.  Professor Ortony – who, up until recently, taught computer science, psychology and education– was recently taught (or reminded) that his retirement agreement – which was written in clear language, fairly bargained-for by both sides, and entered into without any evidence of deception – would be enforced exactly as written, meaning the professor would be considered retired on the day the contract said he would. 

Seems straightforward.  But because he decided he didn’t want to retire on that day, Professor Ortony tried to get out of the contract, and the Fifth Circuit Court of Appeals held last week – unsurprisingly – that he couldn’t.  So, the first straightforward lesson from Professor Ortony’s case is this: if you make an employment agreement with your employer (or, if you’re an employer, and you make an employment agreement with an executive), make sure the agreement is something you want – or at least something you’re willing to live up to.  

• Age Discrimination
• Breach of Contract
• Severance Agreements

The federal courts are drawing a clear battle line over the disclosures that an employee must make before bringing a whistleblower retaliation claim under the Dodd-Frank Act of 2010.  Leading the charge on the one side is the Fifth Circuit, which held in Asadi v. GE Energy (LLC) that a fired employee can’t bring a Dodd-Frank retaliation claim unless he reported corporate misconduct to the SEC prior to his firing.  On the other side, the SEC and judges in New York, Connecticut, and Tennessee are massing in support of allowing a plaintiff to bring a retaliation claim even if he only disclosed the misconduct internally prior to firing. 

Two months ago, Judge Richard Stearns of the U.S. District Court for the District of Massachusetts joined the SEC’s side of the battle.  He ruled that Richard Ellington could pursue a Dodd-Frank retaliation claim against his former employer, New England Investment & Retirement Group, Inc. (NEINV), and his boss, Giacoumakis, even though Ellington only reported concerns about wrongdoing to NEINV’s compliance officer prior to his termination, and did not go to the SEC until after he was fired. Ellington v. Giacoumakis, No. 13-11791-RGS (D. Mass. Oct. 16, 2013). 

• Dodd-Frank Act
• Whistleblowers

• A federal court is allowing to go forward a claim against Continental Airlines brought under New Jersey law by a gay flight attendant for discrimination on the basis of sexual orientation.  The flight attendant claims that the airlines forced him to cut his mohawk and created a hostile work environment.
• In other news from the not-always-so-friendly-skies, following the airlines merger on Monday, the new American Airlines Group disclosed in an SEC filing that – if certain post-merger milestones are met – CEO Doug Parker will receive a retention bonus that includes shares worth about $15 million.  The new airline also described the latest version of a severance package for Tom Horton, the former CEO of the pre-merger airline, whose earlier version of severance package was considered and then rejected by a bankruptcy court – a saga that we followed closely here at Suits by Suits.
• In other New Jersey news, the disability discrimination claim of a dealer who once worked at Trump Plaza Hotel & Casino in Atlantic City has been dismissed after a court found that the dealer was barred from claiming in the case that she was qualified to work, which was at odds with her sworn statement to the Social Security Administration that she could not use her right hand that she made when she sought (and eventually received) disability benefits.
• In news having nothing to do with airlines or New Jersey, the dean of engineering of Sacramento State recently was put on leave by the school after he was accused in a federal lawsuit brought by a career counselor at the school of creating a hostile work environment – allegedly as retaliation for her investigating claims of sexual harassment by an engineering professor.

• Bankruptcy
• The Inbox

In May, iGate sacked its CEO Phaneesh Murthy, claiming that the Board decided to do so after its outside legal counsel found that Mr. Murthy’s failure to report his relationship with a subordinate employee violated iGate’s policy.  Outside counsel made that finding as part of their investigation of the relationship and the employee’s claim of sexual harassment.  (For spicier accounts of the office affair check out the news stories from the time – like this one.)  Last week, Mr. Murthy sued iGate in California state court claiming that his termination was not with cause and that he is therefore entitled under his employment agreement and company stock plans to compensation and benefits that the company has refused to pay.

• Breach of Contract
• Executive Compensation
• Termination With or Without Cause

Weather gurus are predicting snow, sleet, and rain for our area over the weekend.  Although my kids are hoping for the white fluffy stuff, this amateur prognosticator is predicting a downpour.  In keeping with this theme, the week’s biggest employment news is Robinson Cano’s $240 million deal with the Seattle Mariners (who are well accustomed to rainy skies).  But our sights here at Suits by Suits are on matters a little less lucrative:

• You still have a chance to win free admission to our Dec. 10 webinar, “Whistleblower Watch: Big Issues in the Latest Whistleblower Cases Under Dodd-Frank, Sarbanes-Oxley, and the Internal Revenue Code.”  For more details on this prize, click here.
• The First Circuit affirmed a summary judgment ruling in favor of Strine Printing Company against a former sales representative who claimed that his firing resulted in an “oleaginous mass of perceived wrongs.”  The decision addresses a number of employment-related claims, including unjust enrichment, breach of an implied or express employment contract, and misrepresentation.
• We’ve previously covered the exploits of Larry Conners.  Despite his year-long non-compete agreement, the St. Louis newsman is headed back to TV – as a pitchman.  He’ll be a spokesman for John Beal Roofing.
• Jeff Green of Bloomberg Businessweek brought us the latest trend in executive hiring – the “golden hello.”  These are multi-million dollar signing bonuses designed to entice new candidates to join the team.  Among them: the $45 million that Zynga paid to entice an industry vet, Don Mattrick.  Some are skeptical of the arrangements, noting that they don’t correlate with successful performance.
• A Louisiana appellate court has affirmed the dismissal of a lawsuit by former professors at Louisiana College, writes Charles Huckabee of the Chronicle of Higher Education.  The professors claimed that they should have been able to use certain books in teaching classes on religion and values, which were prohibited by the college’s administration.  The court refused to intervene on the ground that it was a religious dispute not proper for court involvement.
• Dominic Patton of Deadline Hollywood covered Jeff Kwatinetz’s suit against Prospect Park.  The producer and talent manager wants a Los Angeles Superior Court judge to decide whether a noncompete provision in his agreement with Prospect Park can permissibly bar him from competing for five years.   

• Breach of Contract
• Civil Litigation
• Executive Compensation
• Noncompete Agreements ‎
• Summary Judgment

Companies prize their formulas for best-selling products like nothing else.  Visitors to the World of Coca-Cola can visit the vault holding the soda syrup recipe.  And KFC’s fried chicken seasoning method has been described as one of its most valuable assets.

NuScience Corporation makes the skin product CELLFOOD, which it describes as an “oxygen and nutrient supplement” using “proprietary water-splitting technology.”  And as recounted by the California Court of Appeal in a recent opinion, NuScience  has fought hard to keep the CELLFOOD formula secret.  The California court’s decision addressed an unusual spinoff of NuScience’s trade secret battle: a malicious prosecution complaint filed by a former employee, David McKinney, who alleged that NuScience wrongfully brought a prior racketeering and misappropriation case against him.  See McKinney v. NuScience Corp., No. B240831 c/w B244074 (Cal. Ct. App. 2013).

According to the court, most of NuScience’s trade secret troubles involved the Henkel family – father John and sons Michael and Robert – who found a copy of the CELLFOOD formula after it had been purchased by NuScience.  After discovering the formula, the Henkels then repeatedly sought to sell it to other buyers, get money from NuScience to hand it over, or sell a competing product.  NuScience won federal court injunctions against the Henkels, but Michael and Robert didn’t stop their efforts.  And after NuScience fired McKinney, its vice president of sales and marketing, the Henkels got him involved in their efforts to discredit NuScience and use the formula.  NuScience then filed its racketeering lawsuit against McKinney and Robert Henkel, alleging that the two engaged in a conspiracy to disparage CELLFOOD and violate the federal judgment against Robert.  NuScience eventually dismissed that case without prejudice, asserting that it did so because Robert was threatening to disclose the CELLFOOD formula.

McKinney then filed a malicious prosecution lawsuit based on NuScience’s decision to voluntarily give up the case.  However, NuScience quickly moved to strike his lawsuit based on California’s anti-SLAPP statute (Cal. Code Civ. Proc., § 425.16). 

• Civil Litigation
• Trade Secrets