Executive in the Middle – Texas Monthly and The New York Times Company Duke It Out in Court over Top Editor Jake Silverstein

You can read about it in the Times:  the publisher of Texas Monthly sued The New York Times Companylast week over Jake Silverstein leaving his post as editor-in-chief of Texas Monthly to be editor of The New York Times Magazine.  Silverstein had a three-year contract with the Texas publisher that was supposed to run through February 2015.  The publisher claims that The New York Times Company tortiously interfered with that contract, causing Silverstein to break it.  This is a common scenario for sought-after executives when they switch companies:  the companies fight in court over them but not against them.  The executive in the middle may feel like she dodged a bullet by not being named as a defendant in the lawsuit.  In fact, it is not so simple.

Even a lawsuit that is not directed at the executive but her new company is risky for the executive because the lawsuit may cause the new company to have a change of heart – concluding that the executive seemed like a great get until the cost of getting her became an expensive legal fight.  It is therefore best for both the new company and the executive to candidly discuss during the recruiting and hiring process whether there is a risk that the old company will take legal action if the executive jumps ship and, if so, how strong the old company’s claims would be.  Ideally, the executive will have assurances – a written agreement is even better – from the new company that it will not terminate the executive over such a lawsuit and that it is prepared to defend against the old company’s lawsuit at its own expense.

The executive should also be mindful before making a move that, even if a lawsuit is not technically directed at the executive, because she is a key witness, the lawsuit could be just as distracting and time-consuming as it would be if she were a defendant.  Distracting and time-consuming litigation is never welcome – but especially not to an executive trying to make a dazzling debut at a new company.

We cannot know whether The New York Times Company and Mr. Silverstein discussed in advance the potential for a lawsuit by his old company.  Fortunately for Mr. Silverstein, his new employer apparently thinks he is worth fighting for.

• Breach of Contract