On December 10, 2013, Suits by Suits contributing editors Ellen D. Marcus and Jason M. Knott will present a live webinar titled “Whistleblower Watch: Big Issues in the Latest Whistleblower Cases Under Dodd-Frank, Sarbanes-Oxley, and the Internal Revenue Code.”  (For more details, click the link.)

Now, you have the chance to win a free registration for this upcoming webinar (retail price $149 for BNA subscribers and $249 for non-subscribers).  All you have to do is either tweet a link to this post, making sure to reference our Twitter handle (@suitsbysuits), or retweet the link to this post that we’ll put up on Twitter.  You can also qualify by commenting in this post with a question for Ellen and Jason to address during the webinar. The deadline to tweet, retweet, or comment is Monday, December 9. On the morning of Monday , December 9, we’ll randomly pick the winner and let him or her know by e-mail or Twitter message.

You may also enter the raffle by following these instructions.

If you’d like to go ahead and register for the webinar, click here.

LASIK eye surgery requires a precise surgeon.  If the surgery is unsuccessful, it can result in under- or over-correction, dry eyes, or infection. 

LasikPlus of Texas, a Houston eye clinic, recently found out that it should have exercised similar precision when drafting its noncompete agreements.  Instead, the Fourteenth Court of Appeals ruled last week that because LasikPlus failed to include required language in its noncompete agreement, one of its doctors can open a competing clinic two miles from its front door.  See LasikPlus of Texas, P.C. v. Mattioli, No. 14-12-01155-CV (Tex. Ct. App. Nov. 21, 2013).  We suspect there was not a dry eye in the house after that decision.

The covenant at issue in the case was part of LasikPlus’s employment agreement with Dr. Frederico Mattioli.  Under the covenant, Dr. Mattioli, for the eighteen months following termination of his employment, could not open a competing clinic within 20 miles or solicit LasikPlus’s clients.  Dr. Mattioli could only terminate the agreement with 120 days’ notice, or 30 days’ notice if LasikPlus was already in breach.

In October 2012, Dr. Mattioli told LasikPlus that he would be leaving within the month to start his own practice less than two miles away.  LasikPlus sued Dr. Mattioli, seeking an injunction to bar him from opening the practice.  The employment agreement expressly entitled LasikPlus to an injunction in these circumstances.  Further, if the covenant was deemed unreasonable in scope of time or location, other language allowed the court to reform the covenant and enforce it to the degree it would be reasonable.

Yet Dr. Mattioli still succeeded in defeating LasikPlus’s request for an injunction, because the clinic left out a critical piece of the covenant. 

• Breach of Contract
• Civil Litigation
• Noncompete Agreements ‎
• Preliminary Injunction

Here at Suits by Suits, we are thankful that the news about executive-employer disputes keeps flowing like gravy.  This past month, we focused a lot of attention on non-compete agreements, many of which met the same fate as an unpardoned turkey.  On a day as cold as chilled cranberry sauce, we sent a live correspondent to cover the oral argument in Lawson v. FMR LLC, in which the Supreme Court will decide whether employees of privately-held contractors of public companies have viable Sarbanes-Oxley claims.  Finally, as per our holiday tradition, we recapped the history of Thanksgiving, in a post as entertaining as the most memorable Cowboys loss.

• Skunks, Conquistadores, and Killer Balloons: Why Thanksgiving Is the Best Tuesday (or Possibly Thursday) of the Year
  November 27, 2013 | P. Andrew Torrez
• Texas Strictly Construes Application of Mandatory Arbitration Clause Despite Superseding Agreement with No Such Clause
  November 25, 2013 | P. Andrew Torrez
• Will Fiduciary Liability Insurance Cover Severance Agreement Payments If The Company Can’t Make Them?
  November 22, 2013 | William A. Schreiner, Jr.
• Upcoming Suits by Suits Webinar: Whistleblower Watch
  November 21, 2013 | Jason M. Knott
• It Was The Added "0" That Did It -- Among Other Things
  November 19, 2013 | William A. Schreiner, Jr.
• I Can't Quit You! - Why Quitting a Company May Not Mean Quitting Fiduciary Duties in Virginia
  November 14, 2013 | Ellen D. Marcus
• Argument Recap: Five Takeaways from Lawson v. FMR LLC
  November 13, 2013 | Jason M. Knott
• What I Don't Know About Your Non-Compete Can't Hurt Me, Right?
  November 11, 2013 | Ellen D. Marcus
• Argument Preview: What to Look For in Lawson v. FMR LLC
  November 7, 2013 | Jason M. Knott
• “Man Bites Dog” in the Fourth Circuit: Court Reverses Arbitrator’s Award and Enforces ‎Release
  November 6, 2013 | Jason M. Knott
• The Basics: Dodd-Frank vs. Sarbanes-Oxley Whistleblower Law
  November 5, 2013 | Jason M. Knott

If you are interested in more information about legal issues involving executives and their employers, on December 10, 2013, Zuckerman Spaeder LLP partners and Suits by Suits contributing editors Ellen D. Marcus and Jason M. Knott will present a webinar titled “Whistleblower Watch: Big Issues in the Latest Whistleblower Cases Under Dodd-Frank, Sarbanes-Oxley, and the Internal Revenue Code.”  In the session, Ms. Marcus and Mr. Knott will discuss the basics of these whistleblower and anti-retaliation provisions and address new developments in the law, including the Sarbanes-Oxley case currently pending before the U.S. Supreme Court.  To register, click here. 

• Monthly Roundup
• Whistleblowers

We here at Suits by Suits have a bit of a holiday tradition of our own: examining the myths that surround our holidays in order to try and tell as close to the “real story” that we can find.  Sure, it’s a departure from our usual focus on high-level disputes between employers and executives –- okay; it’s almost entirely unrelated -– but hopefully you’ve enjoyed our prior forays into cultural anthropology, including such classics as “How We Got Memorial Day,” two stories on the real meaning of Christmas (part one and part two), and a general expose of how we wound up with all those holidays in the first place.

So fire up the turkey fryer:  it’s time we took on Thanksgiving.

When Was The First Thanksgiving?

As usual, our first stop on any tour through history is good ol’ Wikipedia, which tells us that the first Thanksgiving was celebrated by the Pilgrims near Plymouth Rock in Massachusetts in 1621.  This is what we might call the traditional Thanksgiving story, which involves the Pilgrims sitting down after the first harvest with members of the Wampanoag tribe -- including the legendary translator Squanto -- to share a feast.  The only problem with this story is that the contemporary evidence for it is limited to a brief mention in the (largely self-serving) “History of Plymouth Plantation” by William Bradford, and a letter from Edward Winslow.  And, as it turns out, even the word “thanksgiving” wasn’t associated with the 1621 feast at all, but was first used by the Pilgrims at Plymouth Plantation in connection with a festival held two years later.

But did you know that there are three separate claims from the Sixteenth Century to be the “First Thanksgiving?”  The first allegedly occurred eighty years before Squanto sat down with the Pilgrims.  According to the Texas Society of Daughters of the American Colonists, the Spanish conquistador Francisco Vazquez de Coronado celebrated the first Thanksgiving in Palo Duro Canyon, Texas, in May of 1541, and was presided over by a Catholic priest.  (Some now claim that this mass was a celebration of the Catholic Feast of the Ascenscion, and not a Thanksgiving.)  Ascension or not, the Society of Daughters managed to erect a plaque that reads “Feast of the First Thanksgiving – 1541” in Palo Duro Canyon in 1959; that marker is still there to this day.

As a Catholic mass, the Palo Duro Canyon “Thanksgiving” lacks what many would consider to be an essential element of “Thanksgiving”:  the coming together of two diverse people groups.  Indeed, as Rick Shenkman notes, “[I]f Thanksgiving had been about religion, the Pilgrims never would have invited the Indians to join them.  Besides,the Pilgrims would never have tolerated festivities at a true religious event.  Indeed, what we think of as Thanksgiving was really a harvest festival.”  So maybe that one should be out.

The second claim comes from Saint Augustine, Florida, and ostensibly dates to 1565, after an expedition by conquistador Pedro Menendez de Avile.  Like our traditional story – but unlike the feast possibly held in Texas – Avile’s thanksgiving is also said to have involved sharing the feast with the local Native Americans; in this case, members of the Timucua tribe indigenous to northern Florida.

Finally, the third 16th century claim stems from San Elizario, Texas, a small town outside of El Paso, whose residents claim that the first Thanksgiving celebration took place in 1598 upon the arrival of Spanish conquistador Juan de Onate.

Myths About the Thanksgiving Meal

Of course, none of these festivals – to the extent they really happened – would look much like our modern Thanksgiving meal; as National Geographic points out, potatoes and sweet potatoes were not a regular part of the colonists’ diet in the 1600s, and sugar and other ingredients necessary to make cranberry sauce and pies were prohibitively expensive until at least the Nineteenth Century.  For an authentic meal, National Geographic recommends Wampanoag delicacies such as skunk, blood pudding, and boiled bread.  Yum.

Chances are we won’t convince you to bake up a tasty skunk this Thanksgiving.  But the chances are good that, after eating a big plate full of turkey and settling in front of the TV to watch some football, you might find yourself drifting off to sleep rather early in the evening. Everyone knows that’s the tryptophan in turkey making you drowsy, right?

Turns out that’s yet another myth.  As TIFO points out, medically speaking, tryptophan generally needs to be taken on an empty stomach, without the presence of other amino acids or protein, in order to have any effect.  Even if you haven’t loaded up your plate with stuffing, mashed potatoes, sweet potato casserole, corn, brussels sprouts, hot buttered rolls, and cranberry sauce, you’ll still be getting a ton of protein and other amino acids from that turkey drumstick itself.

No, the reason we get drowsy is much more prosaic:  we’ve just likely consumed several thousand calories of food – plus, if you’re like many of us, several glasses of wine – within a short period of time.  Your body shifts extra resources towards the digestive system and away from your CNS and other organs in order to process this massive meal, and that makes you feel sleepy.  Oh, and alcohol is a depressant, but you probably knew that already.

Nor did the Wampanoag teach the Pilgrims how to make popcorn at that first Thanksgiving.  The local variety of corn available was flint corn – what our parents and grandparents called “Indian Corn,” the colorful, dent-free corn you see used in ornamental cornucopias and other decorations to this day.  Unfortunately, flint corn is low in starch, and you need a dense, starchy interior to put that distinctive “pop” in popcorn.  Flint corn, on the other hand, was typically used in hominy and boiled mush.  Somehow, we’re not surprised that boiled mush failed to take off as a movie theater snack.

Transitioning to Today

If much of what we know about the earliest Thanksgiving specials differs so greatly from much of what we celebrate today, we at least know where to pin the blame:  Sarah Josepha Buell Hale, an influential 19th century writer who penned “Mary Had a Little Lamb” and agitated tirelessly for nearly 20 years to get Thanskgiving recognized as a national holiday.  (By the 1840s, Thanksgiving was a largely regional holiday celebrated in New England but not in the South.)  In addition to writing to five separate U.S. Presidents, Hale penned regular editorials for Godey’s Lady’s Book accompanied by recipes for turkey, stuffing, pumpkin pie, and other foods that we now consider “traditional” Thanksgiving foods, even though those traditions originated with Hale, not the Pilgrims or the Wampanoag.

After two decades, Hale eventually convinced President Abraham Lincoln – who, it might be pointed out, had an awful lot on his mind at the time – to recognize Thanksgiving as a national holiday in 1863.  Originally set as the fourth Tuesday in November, Thanksgiving was briefly moved to the second-to-last Thursday in November by President Franklin Delano Roosevelt in 1939.  Why?  Believe it or not, the same reason as today:  Black Friday.  Yes, FDR wanted an earlier Thanksgiving to lengthen the holiday shopping season.  (Coming out of the Great Depression probably had something to do with this!)

The problem – much to the consternation of the Federalist Society, we’re sure – was that this led to varying practices among the states.  Some continued to celebrate Thanksgiving on the last Thursday in November, while others moved to the second-to-last as per Roosevelt’s decree.  In 1941, Texas – everything’s bigger there, we hear – decided to do both, celebrating two Thanksgivings.

Now Congress may not be able to respond to each and every national emergency, but by golly, when a state is celebrating a gluttonous holiday on two separate days, Washington sprung into action, declaring as a compromise that Thanksgiving would be the fourth Thursday in November starting in 1942 – meaning that sometimes it would fall on the last Thursday, and sometimes the second-to-last.  (And, apparently, that once every century and a half, it would create Thanksgivukkah, derided by some as a national nightmare, while celebrated by others.) 

And it’s been that way ever since.

Other Traditions

The Macy’s Day parade in New York began in 1924, and, unsurprisingly, began for precisely the same reason as FDR’s executive order:  as a way to kick off the holiday shopping season.  Of course, those first few years were spent working out some kinks; balloons didn’t get helium until 1927, for example, but they’ve flown every year since then with the exception of 1971 when they were grounded for adverse weather conditions.  In 1997, a woman spent 24 days in a coma after being severely injured by a six-story “Cat In the Hat” balloon blown off the parade by 40 mph wind gusts.  Today, the balloons will be grounded if winds exceed 34 mph.

NBC broadcast the first Thanksgiving Day football game in 1934, featuring the Detroit Lions hosting the Chicago Bears; nearly every year since, the Lions have played on Thanksgiving Day.  (This year, we get three NFL matchups offering roughly 11 hours of football:  Packers-Lions, Raiders-Cowboys, and the Suits By Suits matchup of the week:  Steelers at Ravens.)

Oh, and what about the President’s ceremonial pardon of a turkey?  That tradition goes all the way back… to 1989 under President George H.W. Bush.  Who says Sarah Hale is the only one allowed to make up traditions?

Pass that roast skunk; I’ll have a drumstick!

We’ve written frequently about the long-standing practice in the corporate world of including mandatory arbitration clauses in employment contracts.  Specifically, we’ve pointed out that although the practice may make sense for the employer when it comes to deterring potentially costly lawsuits brought by employees, those equities can shift when it concerns upper-level executives who generally have more means and wherewithal to fight a prolonged legal battle, be it in court or in front of an arbitrator.

In those cases – what we here at Suits by Suits consider our bread-and-butter cases – the employer may want to think twice about binding arbitration due principally to the risks of being stuck with an almost entirely unappealable adverse ruling; we’ve previously discussed how this has turned out poorly for employers such as Merrill Lynch and BDO.

Today, we continue to beat the drums of caution for both sides in our examination of a recent Texas appellate decision that makes it clear that many courts are looking for any way to kick a case out of the legal system in favor of arbitration.

• Arbitration
• Arbitration and ADR
• Releases

We write frequently about severance pay for executives – a subject near and dear to the hearts, and wallets, of executives and the companies that hire and fire them.  Today, we’re going to take this a step further – beyond the severance agreement itself – and look at an interesting case that raises the question of whether a company’s severance payments to an executive are covered losses under that company’s fiduciary liability insurance if the company becomes unable to make those payments. 

It’s a neat case from a lot of perspectives, even if there aren’t too many clear answers.  It’s an interesting issue for companies that enter into severance agreements and then can’t follow through with the money due to a bankruptcy.  Today’s case is especially relevant for us at Suits by Suits because the policyholder is a law firm that – gasp! – went into liquidation, and the executive claiming the severance benefits is a former partner at the firm.  Personally, I like it because the focus of my work is insurance coverage disputes like this – figuring out what’s covered (or not) under insurance policies.

• Bankruptcy
• Change-in-Control Provisions
• Insurance
• Severance Agreements

Here at the Suits by Suits Western Hemisphere Nerve Center, we’re anxiously preparing for our Thanksgiving Day celebration.  Our planned parade down Constitution Avenue celebrating all things executive-employment-related has, however, had to be cancelled in the wake of many battles with former participants.  We’re still fighting an employment discrimination claim from this guy, although we keep telling him we didn’t fire him because he was green – that’s not a protected class, anyway – but because he was moving too slow on the parade route.  This weird critter demands severance pay, and that’s just ridiculous.  Also, Mr. Dough-guy here wants reinstatement, even though business reasons required us to give him the (buttered?) knife in the wake of the Nation’s growing carb-consciousness. 

And don’t even get us started on the personal injury litigation that followed this fellow running into a light post.   Bah-humbug to all of it, and pass the turkey and trimmings --

But let’s start with the cheese plate: A Wisconsin company that makes dairy processing equipment is “looking to reach a settlement” with a Minnesota company that won a $22.8 million judgment against it; the jury found that the Wisconsin company hired employees from the Minnesota one who brought with them confidential design information and other trade secrets. 

In two whistleblower suits involving government entities: 1) a state employee wasn’t a protected whistleblower when she was fired after it was determined her job wasn’t in line with the federal funding that paid for it, the First Circuit Court of Appeals holds; but 2) Georgia’s whistleblower statute expressly waives the defense of sovereign immunity – so Fulton County, Georgia can’t use that defense against two whistleblowers, says the Georgia Supreme Court. 

A dispute over stock redemption goes to arbitration instead of litigation, based on a non-compete: A former executive of Valerus will have to arbitrate his claim that the company forced him to liquidate his stock under a severance agreement, because a prior partnership agreement included an arbitration clause, a Texas appellate court held.

Forbes on whistleblowers: An interesting analysis of the SEC’s whistleblower report from the financial services media company here.  Key line: “a lack of clarity concerning the scope of the Dodd-Frank anti-retaliation provisions raises questions as to whether the SEC will continue to see the increase in tips it has experienced to date.”   

Whatever it is, there’s a whistle blowing inside: We’re not sure what a “vitrification plant” does – sounds scary or kinky, or both – but a manager at one in Washington State says that the plant’s operator is retaliating against her again, two years after she filed a whistleblower complaint.     

If you are interested in more information about legal issues involving executives and their employers, on December 10, 2013, Zuckerman Spaeder LLP partners and Suits by Suits contributing editors Ellen D. Marcus and Jason M. Knott will present a webinar titled “Whistleblower Watch: Big Issues in the Latest Whistleblower Cases Under Dodd-Frank, Sarbanes-Oxley, and the Internal Revenue Code.”  In the session, Ms. Marcus and Mr. Knott will discuss the basics of these whistleblower and anti-retaliation provisions and address new developments in the law, including the Sarbanes-Oxley case currently pending before the U.S. Supreme Court.  To register, click here.

• The Inbox

On December 10, 2013, Suits by Suits contributing editors Ellen D. Marcus and Jason M. Knott will present a live webinar titled “Whistleblower Watch: Big Issues in the Latest Whistleblower Cases Under Dodd-Frank, Sarbanes-Oxley, and the Internal Revenue Code.”  During the webinar, Ms. Marcus and Mr. Knott will discuss the whistleblower and anti-retaliation provisions of the Dodd-Frank and Sarbanes-Oxley Acts, the Internal Revenue Code, and other federal statutes.  Their presentation will address the types of businesses and conduct that can be targeted by whistleblowers, the procedures that whistleblowers must follow to pursue and preserve a claim, the remedies available to whistleblowers, and more.  Ms. Marcus and Mr. Knott will also examine the pressing issues under these laws that are being debated in the courts. This includes contradictory decisions about whether the Sarbanes-Oxley Act’s whistleblower provision covers employees of privately-held companies, such as investment advisers—an issue that is currently before the U.S. Supreme Court in the case of Lawson v. FMR LLC, which we have previously covered in various posts.  To register for the webinar, click here.

• Dodd-Frank Act
• Sarbanes-Oxley Act
• Whistleblowers

Here's a tip that applies when you're negotiating any contract, although in this case we learn it from a negotiation over a severance contract: it's a rather bad idea to make a material change - like, perhaps, increasing the severance payment from 14 weeks of pay to 104 weeks - and then have the other side sign it, without telling them you inserted that change in their draft.

That tip comes from the Sixth Circuit's decision last week in St. Louis Produce Market v. Hughes. Two other helpful tips come from this case.  One, for executives seeking to claim under a severance agreement, is to return any of the company's property if it's a condition precedent to obtaining your severance benefit.  The other, for those people and their lawyers, is to not willfully disobey the court's discovery orders if you're litigating over the severance agreement. 

• Breach of Contract
• Change-in-Control Provisions
• Civil Litigation
• Discovery
• Summary Judgment

• Partners of the company that owns the Philadelphia Inquirer testified this week at a preliminary injunction hearing in a state court in Philly in a case that they brought against their other partners alleging that having editor Bill Marimow fired violated the company’s operating agreement. They seek a court order directing that Marimow be reinstated.
• On Wednesday, a federal appeals court (also in Philly) affirmed a trial court’s summary judgment ruling against Janis Stacy, an engineer and transgender person, in her case against her former employer LSI Corp. for gender identity discrimination. Stacy was let go by the company after transitioning from male to female. The appeals court agreed with the trial court that Stacy did not have evidence of discriminatory intent to overcome the company’s evidence that she was terminated as part of a larger reduction-in-force due to the declining economy. You can find the opinion in Stacy v. LSI Corp. here.
• Film director Lynn Ramsay reported this week that she has not been served with the lawsuit recently filed against her in New Mexico for breach of contract by the producers of Jane Got a Gun – a Western movie in the making starring Natalie Portman.  Ramsay had been the original director on the project. The producers allege that she accepted a large chunk of her salary under the agreement but didn’t show for the first day of production and behaved badly on the set.
• A trial court in Atlanta ruled on Tuesday that the former Compliance Manager of BlueLinx Holdings, Inc. does not have a right to a jury trial in his case against BlueLinx for allegedly retaliating against him in violation of the Dodd-Frank Act after he blew the whistle on the company to the SEC and the PCAOB for allegedly excessive stock-based compensation for the company’s CEO. The whistleblower provisions of the Dodd-Frank Act are a frequent topic on Suits by Suits and will be examined closely in this upcoming webinar.

• The Inbox