We have written previously about litigants’ attempts to compel arbitration under a theory of “equitable estoppel.” For example, last July we discussed the move by Silicon Valley venture capital firm Kleiner Perkins to force its former partner, Ellen Pao, to arbitrate their sexual harassment dispute on the theory that, despite the absence of an agreement to arbitrate between the parties, it would be inequitable to allow Pao to avoid arbitration. Although the trial court rejected this argument, Kleiner Perkins appealed and is awaiting a decision.
Since then, the issue of equitable estoppel has cropped up again in the California courts. Just last week, in a decision that may have ramifications for Pao and Kleiner Perkins, the California Supreme Court declined to review (subscription required) a decision by a California appeals court affirming the denial of The Sports Club Company’s motion to compel arbitration against its former employee, Susan Gorlach.
As the snow accumulates, so does the Suits by Suits news:
In last week’s Inbox, we briefly discussed the dispute between rival insurers Aon and Alliant Insurance Services, Inc.; that lawsuit centers around Aon’s allegations that Alliant raided Aon’s top executives in violation of those employees' covenants not to compete contained within their employment agreements with Aon. That dispute is currently being fought via two parallel lawsuits brought in two different states, New York and California.
Ordinarily, the plaintiff is “master of his or her complaint,” meaning that even if a lawsuit could be brought in multiple jurisdictions, courts will typically defer to the forum chosen by the plaintiff. When parties have claims against each other but prefer different states, this doctrine often results in a so-called “race to the courthouse” in which the first party to file “wins” his or her chosen forum. The “first filed” complaint – the “winner,” if you will, then typically moves to either stay or dismiss the second-filed parallel jurisdiction in the “loser’s” state, and the “loser’s” court almost always complies. This may not be high-minded justice, but it is routine.
Or so we thought.
Document discovery in litigation is a way for parties to learn about the actual facts underlying a dispute. Sometimes, however, parties intentionally destroy documents in advance of litigation (which is called “spoliation”). Spoliation can have very serious consequences, including a court-imposed “adverse inference” instruction. When a court gives such an instruction, it tells the jury that it may assume that documents deleted in advance of discovery would have been bad for the party who deleted them.
This happened to Janet Murley, a former vice president of marketing for the Hallmark Group. As a result, she is now hundreds of thousands of dollars poorer.
This week in suits by suits, with a tip of the hat to some of our fellow bloggers:
This week, our search for intriguing precedent has taken us all the way to the County of Lewis and Clark, Montana, and the case of Shannon Marsden.
Marsden, an employee of Blue Cross Blue Shield Montana (“BCBSMT”), had an employment agreement with a clause that required arbitration of any dispute arising under it. The agreement was for a two-year term, but provided that Marsden could be fired if the president of the company “believed that it would be in the best interest of BCBSMT.”
After BCBSMT terminated Marsden’s employment, she brought a claim under Montana’s Wrongful Discharge from Employment Act (“WDEA”), alleging that she was fired because she reported illegal rebates of insurance commissions.
However, Marsden’s claim came with a catch.
When a dispute between executive and company reaches the point of litigation, usually the executive’s title begins with “former.” But not always. Sometimes litigation proceeds while the executive remains an officer or director of the company. How does the executive’s fiduciary duty to the company affect her litigation strategy and conduct?
Ah, religion.
Whatever good it may – or may not – do for humankind is a subject for theological, philosophical, or old-fashioned barroom debate, not for this blog. Nor do we opine on the multiple varieties of religious faith.
We do, however, have to come across religion quite often when we’re writing about disputes between employers and employees. Religion in the workplace makes things hotter than last year itself. That heat, of course, leads to disputes that often find their way into courtrooms.
When we write about religion, we’re really writing about the tension the exercise of religious beliefs or practices can cause in hiring and in the workplace. Two recent cases showcase this tension and how religious belief in one case, and the lack of it in another, led to disputes. Taken together, and setting the merits of the individual cases aside, the cases suggest conduct that employees and employers may want to avoid if they want to avoid these sorts of problems.
Here in Washington, we’re getting ready for the Presidential Inauguration next weekend. But the news doesn’t stop:
NLRB Holds Facebook Kvetching Among Co-Workers Is Protected “Concerted Activity,” But Caution Is Reasonable As Social Media Meets Established Legal Framework
Let’s be clear: this is not a blog about social media. It’s a blog focused on disputes between executives and the companies they work for and manage. Through that prism, we look at many different issues that affect these employment relationships, including pregnancy, politics, sports teams and even – ahem – insurance.
We’ve also written a lot recently about social media -- specifically the impact of Facebook, Twitter, LinkedIn and their kin on employee-employer relations. Social media are rather quickly changing many of the dynamics of how employees and companies interact, and the law is rapidly trying to catch up. That means there’s a fast flow of new developments in this area.
It’s important to write so much about this, we think, to be true to our core purpose of trying to keep you current on these developments. So at the risk of appearing to dominate our pages with references to Facebook, today we’ll introduce you to a new and unique wrinkle to come out of the intersection of the employment world and social media: a limited protection against being fired for workers who use their social media accounts to kvetch together about their jobs or their employers. Readers, meet the recent decision by the National Labor Relations Board in Hispanics United of Buffalo, Inc. and Carla Ortiz.
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.
Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.
John J. Connolly
Partner
Email | +1 410.949.1149
Andrew N. Goldfarb
Partner
Email | +1 202.778.1822
Sara Alpert Lawson
Partner
Email | +1 410.949.1181
Nicholas M. DiCarlo
Associate
Email | +1 202.778.1835