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).
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
As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.
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