Today’s decision of interest, U.S. Electrical Services, Inc. v. Schmidt (D. Mass. June 19, 2012), involves everyone’s favorite strip-mall stop: the Dollar Tree. James Schmidt and Peter Colon wanted to sell lighting and fixtures to the Dollar Tree (presumably for more than $1.00). Their former employer, U.S. Electrical Services (USESI), wanted to stop them, because it wanted to bid on the same Dollar Tree lighting account and it didn’t want Schmidt and Colon using its confidential pricing information to make their bid.
At the time USESI sued, the account was up for bid in only a few days. So USESI didn’t just file a complaint and seek damages. Instead, it asked for a preliminary injunction barring Schmidt, Colon, and their new employer, Munro, from competing for the business.
This week in suits by suits:
If you’ve had any sort of a working life, then you’ve been asked at least one odd question on a job interview. My personal favorite is why manhole covers are round.  But the oddest interview question I’ve ever been asked was: “Who was Saint Thomas Aquinas?” In my panic and surprise, my mind confused its files labeled “English Religious leaders named Thomas from the Middle Ages,” and I described for my interviewer Sir Thomas More. My interviewer – a leading lawyer at a very prestigious New York firm – sat silently for a moment, and then lectured me on how I apparently didn’t have the liberal arts background necessary to work at his firm.
Setting aside how happy I am, in retrospect, that I didn’t wind up working for someone who would grill me about medieval history, it is rare that any job interview question involves saints or other facets of religious belief. Most employers don’t delve into that subject with candidates – either they don’t care to inquire, or they don’t believe religion (or lack of it) has any bearing on the quality of an employee’s work.
A few weeks ago, I sketched out the high-profile breach of contract dispute between Keith Olbermann and former Vice President Al Gore’s cable TV network, Current TV.
Since then, Current TV has added a new talk show to be hosted by Joy Behar, and on-air host Cenk Uygur has obliquely responded to some of Olbermann’s criticisms that were made public by the filing of Olbermann’s lawsuit. (Q: “Have you talked to Keith Olbermann since he left the network?” A: “Did I talk to Keith Olbermann before he left the network? The answer to your question is no.”) Oh, and Olbermann’s Countdown blog continues to be hosted on Current TV's website, although it (obviously) has not been updated since March 29, 2012 – Olbermann’s last day on the air.
Last time, I highlighted the six breaches of contract alleged by Current that, if material and uncured, might justify Current’s decision to terminate Olbermann without paying him the nearly $40 million left on his contract.
In my last post, I made the case that new social media haven’t changed the issues that come up in legal disputes between companies and high-ranking employees. But social media can add some new twists. For instance, are a company’s Twitter followers the equivalent of a confidential client list, such that you would be “misappropriating” a company “trade secret” if you left and took the list with you?
Twitter and other social media may be transforming our world, but they haven’t changed laws and company policies against disclosing sensitive company information. Take the recent firing – reported in The Inbox – by women’s clothing retailer Francesca’s Holdings Corp. of its CFO, Gene Morphis.
For a high-level executive leaving a company under less-than-ideal conditions, it’s as common as handing in keys to security and shutting down the computer for the last time. In exchange for a severance payment, the executive is asked to sign the typical general release: “I hereby release my employer from any claims, liabilities, demands, or causes of action . . .”
Unsurprisingly, once an employee signs a general release, if he later sues, he is likely to face a quick motion to dismiss.
The latest developments in suits by suits:
A key question looming over any lawsuit is, "Will the case go to trial?" Or, as lawyers usually put the issue, "Will the case survive summary judgment?" (For any laypeople reading this, summary judgment is a procedure for disposing of cases prior to trial if there are no meaningful disputes about the important facts—as lawyers put it, no “genuine issues of material fact.”) Last week, a New York appellate court affirmed a grant of summary judgment against a urologist’s discrimination claim, holding that his employer successfully presented evidence of legitimate reasons for its adverse actions against him. Melman v. Montefiore Med. Ctr., 2012 N.Y. Slip. Op. 04111 (May 29, 2012). The Melman decision shows how judges can agree on how to decide whether to grant summary judgment on such claims, yet still disagree on whether summary judgment ought to be granted.
I need to start off with a confession: my name is Bill and I’m an insurance lawyer. (“Welcome, Bill”). I’m going to be writing about insurance as it applies to employment-related disputes. Even though you may think insurance is a very dry subject, I promise to make it as interesting as I can – although there will be no dancing green lizards in any of these posts. And, if you work for (or defend) a company that can face suits by employees, you may find these posts to be interesting food for thought when it comes to protecting your corporate bottom line from those suits. (As always, though, whether an individual dispute is insured or not is a very fact-specific inquiry that depends on the language of the policy and the facts at issue – your mileage may vary, as they say).
Now here’s some #@%! thought-provoking career advice for executives and the people that hire them: cursing at work (or “cussin” as my southern in-laws say) can cut both ways for your career, as reported here in the Wall Street Journal.
This week in suits by suits (and jerseys):
On May 13, 2012 – after just five months on the job – Scott Thompson resigned as CEO of Yahoo! Inc. in response to allegations by “activist” shareholder Dan Loeb of the hedge fund Third Point LLC that Thompson was claiming a computer science degree he did not have. An internal investigation by Yahoo revealed that Mr. Thompson’s bachelor’s degree from Ston ehill College was in accounting, not “accounting and computer science” as listed both on Mr. Thompson’s resume and in Yahoo filings with the Securites and Exchange Commission. Thompson – who is also recuperating from surgery for thyroid cancer -- subsequently resigned from the board of directors of software developer Splunk Inc. on May 21 as well.
Here’s an interesting story from Joann S. Lublin and Christopher Weaver of the Wall Street Journal about the CEO of medical device company Stryker, who was asked to leave that company over an alleged affair with a flight attendant who worked on the company’s private plane. In the abstract, it’s not unusual for a well-placed executive to leave when an affair with a subordinate is discovered. The interesting thing is: CEO Stephen MacMillan asked a committee of the company’s board for approval to conduct the affair once his divorce was final. He (and his paramour) even followed the committee’s request that the flight attendant leave the company first.
On March 29, 2012, Current TV fired well-known TV personality and “baseball nerd” Keith Olbermann a little more than one year into Olbermann’s five-year, $50 million contract in which Olbermann would move his political news and commentary program Countdown With Keith Olbermann from MSNBC to the fledgling Current TV network founded by former Vice President Al Gore and entrepreneur and politician Joel Hyatt. Current’s termination letter alleges numerous material breaches of contract by Olbermann (described below) as a basis for its decision.
In part two of our series on suits brought by Hollywood actresses against TV networks, we feature a case brought by Claudia DiFolco, actress and host of the one-time reality series My Big Fat Obnoxious Fiance, against her former employer MSNBC. Whether Hollywood actresses will continue to bring cases that perfectly illustrate black-letter legal concepts like repudiation remains to be seen.
DiFolco v. MSNBC – and the decisions that it generated in the U.S. District Court for the Southern District of New York and U.S. Court of Appeals for the Second Circuit in particular – serves as a reminder to companies and executives alike that even seemingly airtight employment contracts can be for naught if the parties “repudiate” them by future conduct, making their provisions unenforceable.
Here's a roundup of this week's news involving suits by suits:
Today we are launching Suits by Suits, a legal blog about disputes between companies and their executives. The four of us are colleagues and lawyers who sometimes wear suits and who sometimes represent clients who sometimes wear suits. We also share an interest in how conflicts between companies and high-ranking employees can play out in the legal arena.
So, for example, when we see a headline about Desperate Housewives star Nicollette Sheridan’s lawsuit against ABC for wrongful termination – which, by the way, recently ended in a mistrial but has been set for a new trial to begin in September – we read the story. Then we dig deeper because, to us, this case is not just about a Hollywood celebrity, it is a suit by suit.
We want to know whether the jury was persuaded by Ms. Sheridan’s theory that her character was killed off and she was written off the show because she complained about being assaulted on the set by the show’s creator Marc Cherry.
We want to know whether the judge accepted Ms. Sheridan’s legal theory that being fired for complaining about an assault violates California public policy that employees have a right to a workplace free of violence and threats of violence.
We want to know whether ABC was able to prove that its plans to kill off Ms. Sheridan’s character were hatched long before Ms. Sheridan complained about Mr. Cherry.
We want to know whether there are any really devastating e-mails – to either side – and whether the jury is going to get to see them, or the judge will find them inadmissible.
We want to know whether any D&O insurance is available to pay Mr. Cherry’s legal fees in the case. Okay, maybe Bill is the only one who wants to know that.
Are we the only ones?
Ellen, Jason, Andrew and Bill
We cover a broad range of issues that arise in employment disputes. Occasionally, we also spotlight other topics of relevant legal interest, ranging from health care to white-collar defense to sports, just to keep things interesting.
Led by Jason Knott and Andrew Goldfarb, and featuring attorneys with deep knowledge and expertise in their fields, Suits by Suits seeks to engage its readers on these relevant and often complicated topics. Comments and special requests are welcome and invited. Before reading, please view the disclaimer.