They’re beautiful.  They’re charming.  And they’re bringing drinks.

She moves toward you like a movie star, her smile melting the ice in your bourbon and water.  His ice blue eyes set the olive in your friend’s martini spinning.  You forget your name.  She kindly remembers it for you.  You become the most important person in the room.  And relax in the knowledge that there are no calories in eye candy.

- Excerpt from a brochure recruiting candidates to work as “Borgata Babes,” serving drinks in the Borgata casino in Atlantic City, New Jersey.   

Here at Suitsbysuits, we write posts that usually focus on rather serious disputes between executives and employers: the impact of arbitration and non-compete clauses, for example; or protections for whistleblowers.  Occasionally we’ll write on more general features of employment that can impact the executive-employer relationship, such as religious discrimination or discrimination based on gender or pregnancy. 

Those are all, shall we say, weighty matters.  Today’s post is about a weighty matter in another sense: a lawsuit between a group of women who worked at the Borgata casino in Atlantic City, New Jersey, as cocktail servers, and alleged that the casino discriminated against them because of their gender and weight.  

• Breach of Contract
• Discrimination
• Summary Judgment

Regular readers of this space know we’ve written a lot about non-compete clauses in executive employment agreements.  Indeed, we should write about them and you should know about them: they can have a significant impact, they’re often misunderstood or overlooked, and the law on them is in a rapid state of flux, as some states reconsider how they will treat them. 

Now one of the editors of this blog, P. Andrew Torrez of our Baltimore office, has published a great piece in the National Law Journal about a California state supreme court decision that is spearheading a wave of changes to non-compete clauses all over the nation.  It’s a must-read for anyone dealing with employees or corporate operations in the Golden State. 

It’s also an honor for us to have one of our own published in the National Law Journal.  And we’re not just saying that because of the old maxim about not arguing with people who buy paper by the ton and ink by the barrel, but because NLJ is, as legal periodicals go, a serious and significant one (its blog covering law in our home base of Washington, D.C., is first-rate, too).

P.S.—While we may not find fame and fortune as legal bloggers, there is glory to be had in the ABA Journal’s Blawg 100 list. If you enjoy reading Suits by Suits, please consider nominating us for the Blawg 100 by Friday, August 9. It will only take a few minutes. 

• Breach of Contract
• Noncompete Agreements ‎

Corporate mergers aren’t just about the bottom line.  They also have a human side, impacting employees who are laid off as a cost-cutting measure and employees whose responsibilities change as a result of the transition.

Contracts between executives and employers can play a role in this transition.  Many employment contracts and benefit plans feature change-in-control provisions.   These provisions can allow executives to obtain benefits if they are terminated after a change in corporate control, or even if they resign for “good reason” after their responsibilities are meaningfully altered.

In 2006, John D. Clayton, the Director of Worldwide Acquisitions and Divestitures for Burlington Resources, Inc., had one of these arrangements when Burlington merged with ConocoPhillips.  Burlington’s severance plan provided a right to benefits if an employee quit for “good reason” within two years of a change in control.  If there was a “substantial reduction” in the employee’s responsibilities, that would be a “good reason” for resigning, entitling the employee to benefits upon resignation.

Just before the March 2006 merger, Conoco offered Clayton a position as its Manager of A&D, and he signed a waiver of benefits under the plan.  But then, shortly after the merger, it reassigned him to the position of Manager of Business Development.  As Manager of A&D, he would have worked with properties that were already yielding petroleum, while as Manager of Business Development, he would only work with exploratory or developmental properties. 

Clayton was disgruntled with the change, and filed a claim for severance benefits – without resigning – in August 2006.  The trustee of the severance plan denied the claim because Clayton hadn’t actually quit.  Clayton worked for Conoco for two more years, but then resigned in March 2008 (within two years of the change in control) and claimed severance benefits.  The trustee denied his claim, determining that he had not suffered a “substantial reduction” in his responsibilities and therefore had not resigned for “good reason.”

Clayton then filed a claim in state court.  Conoco, however, removed the dispute to federal court, on the ground that the severance plan required an “ongoing administrative program” and therefore fell within federal jurisdiction under ERISA (the Employee Retirement Income Security Act).  And in federal court, Clayton’s claim met its end.

• Breach of Contract
• Change-in-Control Provisions
• Civil Litigation

As we here at Suits By Suits continue to monitor changes in state law regarding the status of covenants not to compete (the “State-by-State Smackdown”; see our latest post here), a fifth state has gotten into the act:  Connecticut.

Some background:  like most states – but unlike California – Connecticut follows the traditional balancing-test approach used in most states to evaluate the legality and enforceability of employer covenants not to compete.  (This is sometimes called the “legitimate business interests” or “LBI” test.)  Under Connecticut law, courts must consider the reasonableness of a non-compete clause’s (1) duration, (2) geographical scope, (3) protection of the employer, (4) restraint on the employee’s right to pursue work, and (5) interference with the public interest.  See Robert S. Weiss & Assocs v. Wiederlight, 208 Conn. 525 (1988).

Before the July 4 holiday, the Connecticut state legislature passed a new law with respect to non-competes.  The law itself does very little to alter the landscape, but most intriguing is what the legislature rejected.  Read more after the jump….

• Breach of Contract

One of the continuing themes we’ve stressed here at Suits by Suits is that a tsunami is brewing that will change the national landscape regarding whether and how employers can enforce covenants not to compete contained within an employee’s employment agreement.  (We call this, with typical lawyerly restraint, “The State-by-State Smackdown.”)

Last week, Illinois got in on the act.  Read on….

• Breach of Contract

When a business adopts a company-wide bonus plan and gives itself discretion to administer it, can an executive bring a breach of contract claim challenging the exercise of that discretion?  According to the U.S. Court of Appeals for the First Circuit’s decision last week in Weiss v. DHL Express, Inc., the answer is no.

Jeremy Weiss was a director of national accounts for DHL.  In 2007, DHL told Weiss that it had selected him to participate in its “Commitment to Success Bonus Plan.”  Under the plan, Weiss would receive a $60,000 bonus if he stayed with the company through 2009, and another $20,000 bonus if the company met its objectives in that year.  There was a catch, however: the plan documents gave DHL’s Employment Benefits Committee the “full power and discretionary authority” to administer the plan, and its decisions would be “final and binding” on the participants. 

In October 2008, DHL amended the plan, making all $80,000 of the bonus contingent on Weiss’s continued employment, with an installment of $20,000 in January 2009 and the remainder in January 2010.  If Weiss was terminated “without cause,” he would still get the money; if terminated for “good cause,” he would not receive it.  DHL paid Weiss the first $20k – however, when it terminated him in September 2009, it refused to pay the remaining $60,000, saying that he had been terminated for “good cause” as the result of failing to supervise his subordinates’ billing practices.

Weiss sued for the rest of the money, and the case proceeded to trial on his breach of contract claim.

• Breach of Contract
• Civil Litigation

As you probably know by now, we here at Suits by Suits have been tracking the rapid developments in state law governing the interpretation and enforceability of covenants not to compete contained in employment agreements.  (Our most recent posts on the subject are here and here.)  Generally, the theme at the state level has been towards restricting the scope and enforceability of such clauses; be it California’s decision to essentially prohibit all such noncompete provisions, or Massachusetts’s more nuanced attempt to narrow the scope of noncompete clauses by statute.

Today, however, we look at how the private sector – specifically, international consumer electronics retailer Best Buy – has struck back.  Read on....

• Breach of Contract

May flowers are blooming, and so is the Suits by Suits news:

• CEO dismissals hit a 10-year high in 2012, according to The Corporate Board’s study of CEO succession practices.  Matteo Tonello of the Corporate Board published this summary of the study on the Harvard Law School Forum on Corporate Governance and Financial Regulation.
• The Anderson County Council is talking settlement in its long-running dispute with former county administrator Joey Preston, reports Bill Poovey of GSA Business.   The South Carolina legislators have spent $3 million in legal fees in their unsuccessful effort to recover Preston’s $1 million severance package.  That money would have bought a lot of Skins’ hot dogs.
• We previously brought you the story of David Nosal, a former Korn/Ferry executive who was facing trial on charges of gaining unauthorized access to Korn/Ferry’s system and stealing trade secrets.  Joanne Lublin of the Wall Street Journal reports that the trial did not turn out well for Nosal: he was convicted on all counts.  Nosal told Lublin that he is confident that the verdict will be reversed.
• New Mexico legislators criticized the large buyout offered to the new head coach at the state university, reported Alex Goldsmith at kqre.com.  Craig Neal will get $1 million plus up to $300,000 if the school decides to fire him in the next four years.  In his defense, Neal could have pointed to Mike Krzyzewski, who received $9.7 million from Duke in 2011 (when, incidentally, the Blue Devils lost to 15-seed Lehigh in the NCAA tournament).
• More sports news: Sean Newell of Deadspin reports that warm and fuzzy coach Bill Belichick and the New England Patriots may have cut a player, Kyle Love, because he was diagnosed with diabetes.  Newell’s post discusses the Americans with Disabilities Act, which could have protected Love from termination based on his condition, and the at-will employment doctrine.

• Breach of Contract
• Confidentiality
• Discrimination

As we’ve covered before on Suits by Suits, summary judgment can be a powerful weapon for a party to a civil lawsuit.  By granting summary judgment, a court can resolve a claim before trial, meaning that it’s never heard by a jury.  The standard for granting summary judgment, found in Rule 56 of the Federal Rules of Civil Procedure, is well-known to civil litigators: it is appropriate when there are no genuine issues of material fact and the case can be decided as a matter of law. 

In a recent case from the District of Minnesota, Farmers Ins. Exchange v. West, the Farmers Insurance Group used summary judgment effectively on both offense and defense.  First, it won a ruling that its former district manager, Theodore West, breached his appointment agreement and that Farmers suffered damages as a result.  Then, on defense, it knocked out West’s counterclaims for breach of contract and discrimination.

So what happened in West’s case, and why did Farmers prevail?

• Breach of Contract
• Summary Judgment

Batman has been sued.  Okay, not Batman, but the guy who played him, Mr. Mom and Beetlejuice in the movies – Michael Keaton.  In this lawsuit filed earlier this month in federal court in Illinois, the company that produced the movie The Merry Gentleman (if you’ve never heard of it, that’s the company’s point) alleges that Keaton breached agreements to direct and act in the movie by failing to deliver a satisfactory first cut of the movie on schedule, by working at cross purposes to the company by promoting his own cut of the film to officials of the Sundance Film Festival, and by failing to perform other post-production directorial duties or to assist in promoting the movie.  According to the company, if Keaton had performed his contractual duties, then the Christmas movie would have been released in time for the 2008 Christmas season, rather than May 2009, and, presumably, would have grossed more than the $350,000 than it did at the box office. 

Assuming that the company’s allegations that Keaton breached the contracts are true and assuming that Keaton’s breach (rather than market forces or some failure by the company) caused the movie to flop, what are the company’s damages?  This question is relevant not only to Keaton and The Merry Gentleman production company, but to all parties to a broken contract in which one party had promised to provide employment services to another party in exchange for compensation.  In other words, the question is relevant to all contractually-based employment disputes – a frequent topic on Suits by Suits.  The answer may not be what you think, especially if you think that, as damages, Keaton should just give back the compensation that the company paid him.

• Breach of Contract
• The Basics