The Inbox - September 12, 2014

The court of public opinion giveth, and taketh away. You may recall that we reported on the reinstatement of Arthur T. Demoulis as Market Basket’s CEO, following weeks of customer and employee advocacy for the chief. Public opinion, in the case of Desmond Hague, cut the other way in unrelenting fashion. Mr. Hague, president and chief executive of Centerplate, a catering company servicing sports and entertainment venues, was captured on video kicking and abusing an otherwise docile Doberman Pinscher puppy. The Washington Post reports that when the footage made its way to the SPCA of British Columbia, it quickly went viral and users of social media demanded his resignation. Initially, Centerplate dismissed the incident as a personal matter. As media attention increased, Centerplate announced that Mr. Hague would undergo counseling and community service. The masses remained unimpressed, and as the pressure mounted, Mr. Hague was ultimately removed from his position. Given the power of social media, it appears that the court of public opinion has rendered its verdict.

The National Law Review, citing the recent lawsuit filed by TrialGraphix Inc. against its competitor FTI Consulting, Inc. in the New York Supreme Court, offered helpful tips to employers on both sides of the battle over poached employees. In this case, four high-ranking employees conspicuously left TrialGraphix for FTI Consulting. As in similar suits filed by Booz Allen and Arthur J Gallagher Co. (which we discussed here), claims of corporate poaching usually involve claims of trade secret theft and interference with client business relationships. The article highlights the importance of clearly-worded, reasonably-framed restrictive covenant agreements, safeguarding data upon the employee’s departure, and requiring employees to formally acknowledge the return of all company proprietary information and devices. Similarly, employers seeking to hire these employees should review any non-compete agreements to ensure compliance while also requiring the employee to refrain from using the previous employer’s confidential information or trade secrets. Non-disparagement agreements can also go a long way to prevent ill will between the old and the new employers.

While poaching can land an employer on the receiving end of a summons, not poaching can also lead to legal woes. Such is the case in a recently filed complaint in California federal court against the Walt Disney Co., Pixar Inc., Lucasfilm Ltd. LLC, and Apple, among others. According to Law 360, in this putative class action, the plaintiffs allege that the film and animation studios conspired to not poach or otherwise compete for each other’s employees to avoid bidding wars, thereby suppressing salaries in violation of anti-trust laws. This suit follows a previously filed suit on behalf of industry engineers making similar claims against Apple and other tech giants.   

Finally, are death and taxes as certain as we thought? Actually, yes, but some fees associated with filing taxes may not be. According to Law 360, a D.C federal court will have an opportunity to address this quandary as it decides whether the IRS may impose annual tax preparer fees.  The two named accountant plaintiffs in the case are proposing class certification and maintain that the IRS exceeded its authority when it imposed the fees and penalties in 2010. The plaintiffs argue that they receive no special benefit by virtue of paying the annual $50 fee to file returns on behalf of their clients because the right to prepare and file returns already, and always has, existed. The IRS claims that it is entitled to exact a fee to monitor the eligibility of tax preparers, and has case precedent on its side. In 2012, the 11^th Circuit confirmed that the IRS does, in fact, have statutory authority to impose the fee. 

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