A rare news recap that has nothing to do with health care reform:

• Live Nation Entertainment has finally found harmony with its former chairman Michael Cohl, settling a dispute over a claim that Cohl owed it money under his severance agreement.  When Cohl left Live Nation in 2008, he agreed to pay $9.85 million over two years to buy parts of the business and get out from under parts of a broad noncompete provision.  Live Nation sued him in 2010, saying he still owed $5.4 million.  Marketwatch.
• An employee who insisted on getting paid under a severance agreement because he was competing with his former employer (apparently the severance agreement did provide for such payments) was socked with $40,000 in fees for his efforts after the trial court granted summary judgment for the employer, which argued that he was not competing with it.  Odd.  JD Supra.
• Daniel Foreman, an investment fund executive, filed suit against Cardinal Growth Corp., claiming that it misrepresented the value of funds when it asked him to help it find companies to invest in.  He seeks $82,000 in unpaid fees, as well as other payments.  AltAssets.
• The former chief executive of Extended Stay hotels was socked with a $100 million judgment in that company’s bankruptcy, based on a series of personal guarantees.  But he’s not taking the judgment lying down.  He’s sued Extended Stay’s bankruptcy lawyers, alleging that their malpractice and breach of fiduciary duty caused the judgment against him.  Thomson Reuters.

• Bankruptcy
• The Inbox

So maybe Clyde Bennett’s story isn’t quite as compelling as “The Fugitive” – the 1960s- era TV show and 1993 movie about a doctor wrongfully accused of killing his wife who has to go on a manhunt for the real killer, all the while being pursued by police. 

But a jury in federal court in Virginia found the wrongful allegation that Bennett had stolen computers from his employer pretty compelling.  Compelling enough to award him $1.7 million in compensatory and $350,000 in punitive damages when Bennett sued his employer for malicious prosecution.  And just last week, the Fourth Circuit Court of Appeals affirmed the jury’s decision.  My colleague Andrew Torrez noted the decision last week, primarily because the verdict is unusually high for a case like this.  But it bears some more in-depth review. 

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.

• Confidentiality
• Preliminary Injunction
• Trade Secrets

This week in suits by suits:

• BankUnited Inc. CEO John Kanas and vice-chairman John Bohlsen will pay a combined $20 million to their former employer, Capital One Financial Corp, to settle claims that Kanas and Bohlson breached their noncompete agreements with Capital One when they led BankUnited to acquire New York-based Herald National Bank.
• In an unpublished opinion, Bennett v. R&L Carriers Shared Services, LLC, the Fourth Circuit upheld a $1.7 million jury verdict to a night dock supervisor alleging malicious prosecution after he had been accused of stealing computers from a loading dock of a Colonial Heights shipping company.  Despite characterizing the verdict as "bizarrely excessive," Judge Andre M. Davis, writing for the Court's 2-1 majority, held that the award was justified by Virginia precedent and the plaintiff's circumstances.  In dissent, Judge G. Steven Agee noted that Bennett was awarded nearly seven times the combined amount of every prior malicious prosecution verdict in the past century.
• The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has ordered Norfolk Southern Railway Co. to rehire three whistleblowers who had been fired for reporting workplace injuries, and to pay the plaintiffs $802,168.70 in damages, including $525,000 in punitive damages and attorneys' fees.
• Chicago private equity veteran Daniel Foreman is suing his former employer, Cardinal Growth Corp., alleging that top managers at Cardinal Growth Corp. misrepresented investment fund value and assets in order to convince him to join the firm, and then failed to pay him his full compensation. 
• Hampton Roads Bankshares has filed a federal suit seeking a declaration that it is prohibited from paying former executive Scott C. Harvard a "golden parachute" severance package worth nearly $700,000 under the federal Troubled Asset Relief Program (TARP).
• A New York state trial court has dismissed a lawsuit by a pension fund against clothing giant Ralph Lauren seeking damages and disgorgement of allegedly excessive executive compensation and benefits, deferring to the corporate judgment of Ralph Lauren's board of directors in approving the compensation.
• Finally, in a related item of interest:  the U.S. Securities and Exchange Commission has adopted rules directing U.S. stock exchanges to adopt listing standards for compensation committees and compensation advisers.  Under the new rules, the stock exchanges have 90 days to propose listing standards and one year to finalize those standards.

• The Inbox

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. [1]  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. 

• Discrimination
• Religious Discrimination‎
• Title VII

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.

• Breach of Contract

• A federal trial court in Minnesota has dismissed an antitrust action filed by former football players against the NFL.  The players alleged that the NFL is monopolizing the market of their likenesses by using historical game footage featuring the players in promotional videos.  The court distinguished the Supreme Court’s 2010 decision in American Needle, Inc. v. NFL,saying that the former football players failed to allege concerted action between the NFL and the teams that is illegal under the Sherman Act.  The court suggested that, even though the antitrust action would not go forward, the players may have claims against the NFL for violating their right of publicity.   

• The Inbox

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? 

• Confidentiality
• Social Media
• Trade Secrets

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.

• Confidentiality
• Social Media
• Trade Secrets

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.  

• Motions to Dismiss
• Releases
• Severance Agreements