In today’s litigious world, it is all too common for a disgruntled former business partner to file a lawsuit based on legally weak, if not outright frivolous, claims of wrongdoing. One common reaction is to fight fire with fire by filing counterclaims for abuse of process and/or other similar causes of action. While there is a time and place for pursuing such counterclaims, they should be carefully vetted and not instituted based on emotion and/or simply to create leverage. Indeed, as the defendant in Barnum v. Tubifi, Inc. learned just last month, filing a retaliatory counterclaim can result not just in a little wasted time and money, but could lead to court imposed sanctions.
Many companies try not only to be profitable, but also to be good employers. Some employers still fear, however, that praising employees too much for good work may create some workplace liability. Fortunately, the U.S. District Court for the District of Massachusetts clarified just before the Thanksgiving holiday in Cagnina v. Philadelphia Insurance Companies, that it is, in fact, okay for employers to give thanks (and even unabashed praise) to their employees.
In Be Clear if You Want to Have a “Third-Party Beneficiary” in Your Contract, I discussed that if in-house counsel wanted to ensure that a person or entity achieved the status of a third-party beneficiary, it was critical to have language in the agreement that plainly said this. A 2013 decision from the District of Massachusetts, Pollak v. Federal Insurance Co., highlights the importance of this from the perspective of the third-party beneficiary.
When Richard Angelo died during a triathlon sponsored by USA Triathlon, USAT thought that the waiver/indemnity Richard had executed would protect the organization. Unfortunately for USAT, that liability limitation turned out not to be nearly as ironclad as USAT had hoped. Now, USAT faces the prospect of defending a case that could subject it to hundreds of thousands of dollars – or more – in damages.
Two weeks ago, I posted Carefully Craft Your Arbitration Clause if You Want Some, But not All, Disputes Arbitrated. The recent case of Biotronik A.G. v. Conor Medsystems Ireland, Ltd., is a reminder to in-house counsel that specificity also can be critical if you want to limit the company’s liability in the event of a breach. Continue Reading
As I discussed in Is Arbitration Quicker, Cheaper and Better for You?, sometimes it is in a party’s interest to have a dispute resolution mechanism that is long, onerous and expensive. Further, as the recent case Grand Wireless v. Verizon Wireless confirms, if you want some disputes resolved by arbitration and others resolved by a court, it is critical that your arbitration clause spell this out in detail.
Baltimore Ravens running back Ray Rice, Carolina Panthers Pro Bowl defensive end Greg Hardy, and San Francisco 49ers defensive end Ray MacDonald all have something in common (and it’s not just that they are incredibly talented professional football players): They have all been indicted for engaging in conduct that constitutes domestic violence. In Hardy’s case, he has been convicted for domestic abuse. And just a few days ago, Minnesota Vikings running back Adrian Peterson was indicted for abusing his son and is now under investigation for abusing another son.
The National Football League’s travails with perpetrators of domestic violence have been numerous and storied, and after years of dealing with player domestic abuse instances, the NFL finally instituted a Domestic Violence Policy. While the NFL’s policy is directed towards perpetrators of domestic violence, Massachusetts employers now are required to protect employee victims of domestic violence. Continue Reading
While it may not be standard practice when drafting contracts to include a clause stating that “if litigation between the parties ensues the prevailing party will recover its legal fees,” such provisions do appear in a variety of contracts from time to time. A recent First Circuit opinion, Thompson v. Cloud, involves such a clause and also serves as a good reminder that it can be dangerous to take lightly even seemingly simple provisions in an agreement.
In Part 1 I shared with you five commonly overlooked terms in executive separation agreements. Here are five more.
6. Release Timing. If the executive is excused from performing work or coming to the office well before her last day of employment, the company may want to have the executive sign an agreement close to the day the executive is notified about her separation because the company will remain exposed to liability for the period of time between the executive’s signing the separation agreement and her actual last day. In addition, I recommend having the executive sign a second release on her actual last day of employment – and make signing that second release contingent upon receiving any post-termination severance benefits.
7. Post-Termination Restrictive Covenants and the Integration Clause. Many agreements contain a boilerplate integration provision, reciting that the agreement is the entire agreement between the parties and that the executive is not relying on anything not contained in the written document. If the executive has signed a prior agreement containing restrictive covenants which are intended to survive termination of the executive’s employment, such a general integration clause could void the prior post-termination restrictive covenants. An alternative would be to include a provision in the separation agreement that ratifies the executive’s obligations in the prior agreement and incorporates that agreement into the separation agreement. Also, if there are specific lists of customers or types of information in the prior restrictive covenant agreement, be sure to take the opportunity in the separation agreement to update such lists to better reflect the customers and types of information the executive has access to closer to the time of termination, rather than relying on the initial list at the commencement of his employment, which is when many executives tend to sign restrictive covenant agreements.
Executives in this market are moving in and out of companies with greater frequency. With the myriad legal claims that an executive could assert against an employer, whether meritorious or not, more companies are opting to give executives some compensation or other benefits on the way out the door in exchange for a release and other post-employment obligations to ensure that the executive will be a “good leaver.” While the concept of a separation agreement is pretty straightforward, multiple devils can lurk in the details. Here are the first five of my top 10 often overlooked terms in executive separation agreements. Continue Reading