Happy 4^th of July! While many Americans enjoy a festive day of parades, barbecues and fireworks, let’s see if this week’s highlights spark your interest:

• The American Apparel/Dov Charney feud seems set to implode as the parties fire missiles and missives at one another. According to Fortune, Mr. Charney requested a special shareholder meeting in an attempt to increase the number of sympathetic directors on the board while also reporting in a regulatory filing that he is working with investment firm Standard General to amass a controlling interest. Meanwhile, American Apparel responded by adopting a poison pill which would cap a shareholder or group of shareholders interest at 15 percent.
• Bloomberg reported that the former employees of Goldman Sachs, who have alleged gender bias in their suit against it, ignited a class certification request on Tuesday. In support of their motion, the plaintiffs argued that female vice presidents and associates were systematically paid and promoted less than their male counterparts in the investment banking, management and securities divisions since September 10, 2002.   

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On Thursday, even though the United States lost to Germany, they moved on from the Group of Death to take on Belgium in the World Cup round of 16. In honor of US Soccer’s achievement, we are glad to present this footy-themed edition of the Inbox.

• The New York Post continues to report on the controversy surrounding last week’s decision to terminate American Apparel CEO Dov Charney. In this piece, one of our editors achieved his goal of being quoted in that paper, although neither he nor Charney got a clever rhyming front-page headline.
• A New Jersey judge issued a red card to a shareholder lawsuit against Johnson & Johnson, tossing the case out on summary judgment. MassDevice.com reported that the judge decided that J&J acted in good faith when it decided not to claw back $40 million that had been paid to its former CEO, William Weldon.

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This has been a noteworthy week here at Suits by Suits for developments in the law concerning whistleblowers; in addition to our in-depth articles we published this week, we also saw the following developments:

• The big news – which we tweeted about yesterday – is that the U.S. Supreme Court issued its opinion in Lane v. Franks, a case we’ve been watching with considerable interest.  In a unanimous (9-0) decision, the Supreme Court ruled that whistleblowers are protected against retaliation by their employers when they are called to testify in court about corruption, departing from past cases in which employees were held not to have First Amendment rights to discuss matters learned at their jobs.  Writing for the unanimous Court, Justice Sotomayor held that such testimony is in fact protected by the First Amendment because “Anyone who testifies in court bears an obligation, to the court and society at large, to tell the truth.”  We’ll be analyzing this decision in depth in the coming days.
• The Supreme Court’s decision in Lane v. Franks comes on the heels of a survey conducted by the federal Office of Personnel Management showing that nearly 20% of federal employees are afraid of retaliation if they were to disclose “a suspected violation of any law, rule or regulation” by any government agency.  (61.2% affirmed that they felt free to disclose such violations without fear of reprisal.)  The Washington Post analyzed these results in the context of the ongoing controversy regarding the department of Veterans’ Affairs; the Acting Secretary of the VA, Sloan Gibson, has promised to protect any whistleblowers from reprisal.  Nevertheless, attorney Scott D. Gerber, writing in the Huffington Post, opines that the VA’s whistleblower protection program “is broken, too.”
• Relatedly, the Wall Street Journal opined that recent activity and statements by the Securities and Exchange Commission (SEC) may signal that the agency is prepared to take stronger measures against employers who retaliate against whistleblowers.
• Illustrating the SEC’s get-tough policy, earlier this week, it fined a hedge fund, Paradigm Capital Management, for retaliating against a whistleblower that reported alleged “improper transactions” by the hedge fund to the SEC.

Of course, not everything that happened this week involved whistleblowers; here are a few other Suits by Suits that may be of interest:

• The U.S. Supreme Court granted certiorari in a case that will determine whether mortgage loan officers are “employed in a bona fide executive, administrative, or professional capacity” and thus exempt from mandatory overtime pay requirements.
• Finally, the Washington Post documented the fallout over years’ worth of complants about American Apparel’s CEO Dov Charney (as well as photographer Terry Richardson) for multiple alleged instances of sexual misconduct.  Despite founding the company, the American Apparel board of directors ultimately suspended Charney for a 30-day cure period as required by contract before he can be terminated.  Charney’s bizarre conduct is alleged to include wandering through American Apparel offices in his underpants, masturbating in front of a (female) reporter, among other behvaiors that led one plaintiff to describe his leadership as a “reign of sexual terror.”  The Post also called out Richardson’s “aesthetic of hipster softcore pornography” (which it then documents by reproducing a half-dozen advertising shots of young-looking models).

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• Netflix is challenging the lawsuit filed against it by its former content acquisitions executive Jerry Kowal, whom Netflix fired before he could resign to work for Amazon last summer.  Kowal's claims against Netflix - which we examined earlier - include defamation.  Netflix now claims that Kowal took its confidential documents - downloading them while on vacation weeks before he left for Amazon.  
• A 48-year-old former director of Disney's story department has sued Disney in Los Angeles Superior Court for age discrimination, claiming that Disney fired him after 26 years and replaced him with a woman in her late 20s or early 30s.  
• Twitter's COO Ali Rowghani resigned this week, although he will continue as an employee of the company.  Reportedly, he had little to do after CEO Dick Costolo took on more responsibilities at the struggling company.  Rowghani and Costolo exchanged friendly tweets about his resignation, so we would be surprised to see a suit by suit emerge.
• SunTrust Bank is paying $300,000 to settle a charge by the EEOC that one of its branch managers in Sarasota sexually harassed three women who reported to him by, for example, allegedly repeatedly trapping one of them at the teller's desk using his body and telling another that she should wear a bathing suit to work.

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Summer humidity has arrived here in the mid-Atlantic, but the skies are blue and the thermometer isn’t creeping above 90 as of yet.  Here are some tidbits of executive-employer news to print and read in the shade when it’s time to cool off: 

• Not that the White House needed more controversy right now, but the Office of Special Counsel is investigating 37 whistleblower claims arising from 19 different Veterans Administration facilities, reports Jack Moore of Federal News Radio.  The range of misconduct that the whistleblowers allegedly disclosed includes “improper scheduling practices, the misuse of agency funds and inappropriately restraining patients.”
• Chris Cassidy of the Boston Herald writes that the Massachusetts House Speaker, Robert DeLeo, and the state’s governor, Deval Patrick, are clashing over noncompete agreements.  Patrick has been pushing to ban the prohibitions, while DeLeo and his allies argue that they should remain because employees have shown a willingness to live with them.
• “I’m Number One!”  In the CEO world, the top-ranked executive in terms of compensation is Charif Souki of Cheniere Energy Inc., who raked in $142 million last year.  Now, Souki’s compensation has sparked a disgruntled shareholder lawsuit, according to Zain Shauk, Caleb Melby and Laura Marcinek of Bloomberg.  The lawsuit has led Cheniere to push off its annual meeting by three months.  Shareholder advisory firms are telling the company’s stockholders that they should not vote to approve further expansion of its executive compensation.
• Darren Heitner, writing for Forbes, brought us the story of a football agent’s lawsuit against Octagon, his former employer.   Doug Hendrickson, who now works for Relativity Sports, alleges that the noncompete provision in his employment agreement with Octagon is an illegal restraint of trade under California law.  Hendrickson has represented Marshawn Lynch in the past; no word as to whether his lawyers are familiar with Beast Mode.

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Here at the Suits by Suits Executive Employment Dispute Resolution and Litigation Centre, we’re closing the door and shutting things down, to paraphrase Alan Jackson, as Memorial Day approaches (our history of that day is here, by the way).  We’ve decided to walk to the beach this year because it may actually be faster than getting on the highway – given that fifteen percent of our Washington, D.C. home base clogs the roads to get out of town, while more than that come in to wander around the National Mall in search of restrooms. 

Assuming you are not reading this while you’re driving, you may find this collection of developments in the world of executive employment disputes and related fields to be interesting:

• Some interesting thoughts about the criticism The New York Times faces after its surprise firing of executive editor Jill Abramson is here; it includes this truism: “An important lesson is for employers to understand that the leverage that they may have over employees in the workplace does not necessarily extend to the court of public opinion.” 
• An alleged whistleblower who worked at Dish Network in its South Asian business alleges the satellite TV provider is blacklisting him from working in Bollywood. 
• The growing scandal surrounding the Veterans’ Affairs department has, of course, whistleblower implications – we’ll likely be writing about this more in the future, but here’s one note about an allegedly blown whistle at a Colorado VA facility. 
• Those cyber-thieves got more than data; they got a chunk taken out of his pay too: former Target CEO Gregg Steinhafel had his 2013 compensation slashed by more than one-third by the retailer’s board of directors this week; he’ll also have to repay over $5 million in retirement benefits.  Don’t cry too loudly for the CEO whose exit was an “involuntary termination” after a data breach scandal rocked the company’s holiday shopping season last year: he still has a golden parachute worth more than $54 million.  
• Maybe he’s not an executive, but he’s certainly a high flyer: an air marshal who was fired after discussing cutbacks to the air marshal program on television will have to defend his appellate victory at the United States Supreme Court.  Robert MacLean convinced the U. S. Court of Appeals for the Federal Circuit that he should have been allowed to use a whistleblower defense when the TSA undertook to fire him; this week, the Supremes agreed to hear the government’s appeal of that ruling.  
• Insert the Memorial Day beer-drinking pun of your choice here: A St. Louis jury returned a verdict in favor of megabrewer Anheuser Busch this week, finding that it did not discriminate against a former top-ranking executive when it paid her less than men in similar positions.  Even though her bonus and salary were over 40 percent lower than her male predecessor’s, the jury found no evidence to support the executive’s claim of gender discrimination.  

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I thought April showers brought May flowers, but the month of May has brought both showers and flowers to the DC-Baltimore area.  Luckily, our colleague Andrew Torrez was not parked on the Baltimore street that was swept away by the recent deluge.  As for this week’s news in employer-executive disputes, we’ve managed to pluck a few tidbits that have bloomed despite the storms:

• In the continuing saga of a proposed ban on non-compete agreements in Massachusetts (which we have covered here and here), 37 technology CEOs recently wrote to the state legislature to advance the cause of the ban, reported Kyle Alspach of BetaBoston;
• Two trade associations have resolved an expensive dispute over poaching of employees.  Dietrick Knauth of Law360 wrote that TechAmerica sued the Information Technology Industry Council for hiring away the leaders of its government procurement team, but has now agreed to a settlement.  TechAmerica argued that the Council wanted to put it out of business by stealing its member companies. 
• Patron Tequila settled during trial with an executive who claimed that he was entitled to $70 million in bonuses – and just in time for Cinco de Mayo.  City News Service said that Ajendra Singh sued Patron and its founder, John Paul DeJoria, alleging that he was promised equity bonuses based on the value of the company in exchange for operating its new factory in Mexico.
• A California Senate committee is recommending a bill that would raise corporate taxes for companies who have CEOs that make more than 100 times that of its median worker, and would provide tax benefits to companies whose CEOs make less than that ratio.   Harold Meyerson of the Washington Post wrote that the bill was “one of the few remaining avenues that could enable workers to regain some of their lost income,” “in the absence of both unions and full employment.”
• Melissa Lipman of Law360 reports that eBay settled an antitrust suit alleging that it entered into an anti-competitive agreement with Intuit not to recruit each other’s employees.  The deal includes an injunction and a $3.75 million payout.  The $3.75 million is more than the price for the third most expensive item ever bought on eBay – lunch with Warren Buffett.

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Here as we approach the close of April, we’ve noticed (in something of our Moneyball moment) that three of the four cities where Zuckerman Spaeder has offices – New York, Baltimore, and Washington – host baseball teams that have won more than half their games thus far this season.  Our colleagues in Tampa are the only ones with a team winning below .500.  Maybe we can make up for that by opening an office in Milwaukee, where the Brewers have won nearly 75% of their games. 

In any event, the items below came over our transom this work and are worthy of note in the world of executive employment disputes:

• Mary Willingham, the controversial University of North Carolina staff member whose comments on student-athlete literacy were widely circulated, has resigned, citing a hostile work environment in the flak over her views. 
• A federal judge in New York dismissed Veramark Technologies’ suit against its former VP of sales and his new employer Cass Information Systems; the court held that Veramark’s non-compete agreement with the former VP was not enforceable because Veramark couldn’t show it was needed to protect its existing customer relationships. 
• Speaking of non-competes, another columnist in the Boston Globe – which has extensively covered Governor Deval Patrick’s proposal to ban non-competes – has come out in support of that ban. 
• An Alabama newspaper published this “how-to” guide to whistleblowing this week. 
• 64,000 technology workers in the Silicon Valley have tentatively settled their lawsuit against Apple, Google, Intel, and Adobe, alleging those companies colluded to keep down wages and limit “poaching” employees from one company to another.  The settlement is reportedly for $324 million, and comes just a few days after the employees argued against Apple’s motion that they could not use statements about the character of late Apple CEO Steve Jobs.
• A bill in the Iowa State Senate that would expand whistleblower protections moved to the full body this week. 
• A former bank examiner’s whistleblower suit against the Federal Reserve was dismissed this week, after a federal judge in New York ruled that she had not connected her allegations of wrongdoing at J. P. Morgan with her termination. 

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We here at Suits By Suits used up pretty much all of our literary creativity in drafting last week’s Inbox, a stirring tribute to the late, great director John Hughes as seen through the cast of his seminal film, The Breakfast Club.  So this week, in the words of Joe Friday, you get just the facts, ma’am – which is to say, a terse rundown of the week’s developments delivered in a gruff, no-nonsense style:

• This Wednesday, the U.S. Occupational Safety and Health Administration (OSHA) issued an interim final rule and public requests for comments regarding the employee protection provisions of the Consumer Financial Protection Act of 2010, the portion of the Dodd-Frank Act that established the Consumer Financial Protection Bureau to protect whistleblowers who report violations of various consumer protection laws.  The interim final rule describes the process that OSHA investigators and administrative law judges will take in evaluating whistleblower complaints under this statute, and mirror regulations OSHA has implemented over the last few years with respect to other whistleblower statutes under its jurisdiction.
• We’ve previously discussed the Illinois appellate court’s 2013 decision in Fifield v. Premier Dealer Services, which altered the landscape of noncompete law in Illinois by seemingly declaring a bright-line rule that an employee must have worked for his or her employer for two years in order for the employer to subsequently enforce a noncompete clause.  This week, attorneys writing in the National Law Review analyze a recent decision by a federal District Court judge applying Illinois law, Montel Aetnastak v. Miessen.  In that case, the Court refused to follow Fifield and apply a “bright-line” two-year test, instead holding that the appellate court holdings have been “contradictory” and that there has been no “clear direction from the Illinois Supreme Court,” thus permitting that court to enforce a noncompete clause against an employee who had worked for her employer for only 15 months.  We will be watching to see how the state courts respond; we wouldn’t be surprised to see a certified question to the Illinois Supreme Court to resolve the status of Fifield with finality.
• While the Hobby Lobby case has garnered national attention these past few weeks, a new dispute between religious employers and employees may be brewing in Hawaii.  The Roman Catholic Church has rolled out a new Teacher Employment Agreement that permits teachers at 36 parochial schools in Hawaii to be terminated for “living immorally,” defined as “adultery, homosexual activity, same sex unions, procuring, abetting or promoting abortion, euthanasia or in vitro fertilization, and unmarried cohabitation.”  The Hawaii Civil Rights Commission will scrutinize the contract to determine if the new contract violates Hawaii’s state law protections against discrimination based on marital status and sexual orientation, particularly with respect to teachers who teach purely secular subjects.  The superintendent of Hawaii Catholic Schools has argued that even secular teachers at parochial schools are “role models whose job is also a ministry,” thus falling under a ministerial exemption.  We’ll continue to monitor this situation.
• Relatedly, a New York appellate court upheld a $1.6 million verdict (including $1.2 million in punitive damages) against Gloria’s Tribeca, Inc. and chief owner Edward Globokar, who own and operate a chain of Mexican restaurants in New York City called “Mary Ann’s.”  The restaurants would hold weekly, mandatory “prayer meetings” in which chef Mirella Salemi was insulted, told she was “going to hell” for being gay, and, in at least once case, was instructed to fire another employee for being gay.  (Salemi refused.)  The appellate court rejected the restaurant’s First Amendment claims, holding instead that the practices violated the New York City Human Rights Law.

Oh, and just one more thing:

• Long-standing consumer advocate (and perennial Presidential candidate) Ralph Nader has launched “Nader’s Penny Brigade,” a grassroots organization with the goal of bringing attention to what Nader calls the growing disparity between executive compensation and average worker pay.  The first item on Nader’s agenda has to do with the accounting measures used in how large corporations accrue profits in relation to bonuses paid to top executives; an issue that we’ve previously highlighted in this space.  The organization’s name stems from Nader’s plea that shareholders donate one penny for every share that they own to fund oversight.  We just thought you might like to know.

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It’s been a busy week here at the Suits-by-Suits Global Executive Employment Dispute Centre in Washington, D.C., what with interesting Supreme Court arguments being heard, the famous Cherry Blossoms about to blossom, our beloved Nationals putting final touches on their pitching rotation, and even some more snow from the winter without end. 

But none of that matters next to what’s really important about this week: which is that Monday marked thirty years (!) since the fabled “Breakfast Club” met for detention on a dreary Saturday, March 24, 1984, (at Shermer High School, Shermer, Illinois…).  In celebration of the great teen-angst classic, we’re using quotes from the film to introduce this week's collection of interesting news notes from the world of executive-level employment disputes.  So here they are, framed by the work of the movie’s writer and director, the late, great John Hughes: 

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