This morning, the In-House Advisor convened a video conference of 15 General Counsel and Corporate Counsel to discuss how their businesses are dealing with the COVID-19 crisis. The in-house counsel represented were from entities ranging from small, local companies, to large, multi-national enterprises. As a lead-in to the roundtable discussion, a brief presentation was given by two crises management experts, T.J. Winck and Dan Cence, of Solomon, McCown and Cence. Some of the key takeaways from the presentation and roundtable discussion were as follows:

Communications

  • One of the best ways to keep people in your organization calm is to repeatedly and consistently send out messages to everyone. You are better off saying too much than too little. Among other things, the in-house counsel attending said that their businesses are:
    • Sending out daily emails that goes out to everyone with an update.
    • Having “town hall” meetings with questions and answers once per week.
    • Maintaining an intranet page with updated Covid information.

Crisis Management

  • Be sure to have at least one member of your Crisis Management Team constantly monitoring the CDC and WHO, as new information is constantly coming out.
  • While everyone would like to think that the situation
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In another post, I discussed how an email can satisfy the signature requirements of the Statute of Frauds. Nevertheless, an email is not always sufficient. Indeed, as the plaintiff in Terry v. Vinfen recently learned, sometimes you just have to do things the old fashioned way, and send a letter.

In June of 2019, Richard Terry filed a lawsuit against Vinfen and one of its employees. Not long thereafter, the parties engaged in mediation, which resulted in a settlement. After verbally acknowledging that settlement on the record, a written settlement agreement was prepared and executed by all parties on October 10, 2019. In order to comply with the Older Workers Benefit Protection Act, the settlement agreement specifically provided that Terry:

May revoke [the Settlement] Agreement within seven (7) days after he signs it, by delivering a letter in hand or first class mail (postage prepaid), to Jaclyn Kugell, Morgan, Brown & Joy, LLP, 200 State Street, Boston, MA 02109. This [agreement] shall be of no force and effect unless Mr. Terry … does not revoke this [agreement] within the seven (7) day period outlined [in the previous sentence].

On October 13, 2019, Terry emailed Attorney Kugell, stating: … Keep reading

While being a defendant in a lawsuit is no fun, being a defendant in a class action lawsuit is especially painful. If you are in-house counsel in a service business, you may be particularly vulnerable to such actions and, no doubt, want to do whatever you can to avoid them. One strategy that has been employed over the years to thwart class actions is to include an arbitration clause in service agreements. Sometimes, however, companies also want to reserve the right to unilaterally modify the terms of their agreements – and doing so can invalidate an arbitration clause. Nevertheless, a recent decision from the Federal District Court of Massachusetts in Wainblat v. Comcast shows how one company was able to thread this needle and achieve both objectives.

Robert Wainblat was a Comcast customer, and in 2017 he agreed to a Subscriber Agreement that required arbitration for:

[A]ny claim or controversy related to [Comcast] or our relationship, including but not limited to any and all: (1) claims for relief and theories of liability, whether based in contract, tort, fraud, negligence, statute, regulation, ordinance, or otherwise; (2) claims that arose before this or any prior Agreement; (3) claims that arise after

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When seeking to enforce a restrictive covenant, whether a noncompete or a nonsolicit, the standard play-book calls for an aggrieved party to file suit and seek a temporary restraining order and preliminary injunction to preclude the defendant from continuing to compete or solicit during the restrictive period. In order to obtain such relief, however, a plaintiff must show not only that it is likely to succeed on the merits, but also that (i) absent such relief it has a substantial risk of suffering irreparable harm, and (ii) the risk of such harm outweighs the risk of irreparable harm to the defendant if injunctive relief were to issue. Thus, it is possible that even if a plaintiff convinces the court that the defendant is violating a restrictive covenant, the court may not grant any injunctive relief. (One common scenario where this happens is when the defendant can show that enforcing the restrictive covenant, essentially, will prevent him/her from being able to be gainfully employed.)

Assuming your case is strong, even if no injunctive relief enters, you still may want to pursue a claim for damages against your former employee. While that is all well and good, proving damages for a … Keep reading

Considerations for October 1, 2019 Massachusetts Paid Family and Medical Leave Tax

Beginning on October 1, most employers in Massachusetts will be required to withhold tax to fund Massachusetts Paid Family and Medical Leave benefits. There is an exception to this requirement, however, for companies that receive a tax exemption from the state for a private plan providing the same or better benefits. Many employers have already chosen to apply for a tax exemption, after comparing the cost of the tax to the likely cost of implementing a private plan. Some companies are requesting exemptions from part or all of this tax because for them, it is cheaper to pay for the benefits directly or through short and long-term disability plans already in place. Others have chosen to obtain tax exemptions for 2019 and 2020 only, with the intention that they will join the state plan in 2021 and begin withholding taxes then. (Because benefits under the program are not payable until 2021, an employer with a two-year tax exemption reaps an immediate savings while shifting the risk of paying benefits to the state, beginning in 2021.) Still others want a tax exemption because their own program for paid leave is better than what the state generally offers, and they do … Keep reading

Your company is entering into a contract with a new business partner and everything looks rosy. As a savvy General Counsel, however, you know that even the best of situations can turn sour a few months or a few years into the relationship. Coincidentally, you just read an article by Attorney David Tang in which he suggests including a clause in business contracts mandating that before a lawsuit or arbitration can be filed, the parties must first (i) have senior principles of the contracting parties meet to try to resolve the impending dispute; and, if that fails, (ii) engage in formal mediation.

The theory behind such multi-tiered pre-litigation dispute resolution mechanisms is straight-forward and quite laudable: if the parties can resolve a dispute without resorting to litigation or arbitration, they likely will save themselves a lot of pain, anxiety and, most of all, money. In reality, however, forcing people to engage in settlement discussions may actually cause one party or the other to lose substantive rights. Take this real life example that I lived about 12 years ago….

My client engaged me to sue its business partner and obtain a temporary restraining order to enjoin him from engaging in … Keep reading

Imagine, an employee in your organization advises that they need to take leave pursuant to the Family and Medical Leave Act to recover from an upcoming surgical procedure. Your organization approves the leave and then you find out that while on leave and supposedly recovering from surgery, the employee goes on a family vacation to a far off beach resort. You are irate at what you perceive to be a blatant bait and switch and want to consider terminating the employee. Hopefully, you run all this by your General Counsel first because, depending on the circumstances, such termination could be deemed retaliatory and subject the company to a claim for substantial damages. Indeed, this is exactly what happened in DaPrato v. Massachusetts Water Resource Authority.

In that case, Richard A. DaPrato, who worked for the MWRA, was on FMLA leave recovering from foot surgery when he filed an application (signed by his surgeon) to extend his leave from March 20 to March 26. Shortly thereafter, DaPrato went on a family vacation to a Mexican beach resort. Approximately two weeks after returning from Mexico, the MWRA learned DaPrato had gone on vacation, reasoned that DaPrato had lied about his medical … Keep reading

In this installment of The In-House Advisor, we interview Paul Igoe, Executive Vice President, General Counsel and Chief Compliance Officer at Excelitas Technologies Corp., a Waltham, MA-headquartered manufacturer of high-performance, market-driven photonic innovations designed to meet the lighting, optronic, detection and optical technology needs of customers worldwide. Excelitas has 20 facilities worldwide and approximately 7,000 employees.

Prior to joining Excelitas in August 2018, for five and one-half years, Mr. Igoe served as Senior Vice President, General Counsel and Secretary of SS&C Technologies, Inc., a Windsor, Connecticut-headquartered provider of financial software and services. From 2009 to 2012, Mr. Igoe was Vice President, General Counsel and Secretary of Lydall, Inc., a Manchester, Connecticut-based manufacturer of filtration media and thermal/acoustical products.  From 2001 to 2009, Mr. Igoe served as Associate General Counsel and Assistant Secretary to Teradyne, Inc., a manufacturer of automatic test equipment for the semi-conductor industry headquartered in North Reading, Massachusetts.  Previous to his employment at Teradyne, Mr. Igoe was a Junior Partner in the Boston office of Wilmer Hale.

The In-House Advisor: What do you see as the main focus of your role as in-house counsel, and how do you see that role evolving over the next few … Keep reading

Who wouldn’t want to be able to dictate the terms of a contract rather than having to negotiate them with someone whose interests are not completely aligned with your own? If you ever find yourself in such a position, however, keep in mind that if a contract is too one-sided, it can be ruled illusory and unenforceable. Indeed, that is exactly what happened to the defendant in McNamara v. S.I. Logistics, Inc. when it tried to enforce its contractual right to arbitration.

Green Smoke, Inc. (which later changed its name to S.I. Logistics) was in the business of selling e-cigarettes, and it used third-party “Affiliates” to market its products. Tim McNamara became a Green Smoke Affiliate in late 2009 or early 2010, and the following year the company implemented a new (and mandatory) Affiliate Agreement. Any Affiliate who refused to sign on to the 2011 Agreement became ineligible to receive Green Smoke commissions going forward.

In 2014, McNamara was terminated from Green Smoke’s Affiliate program, and he subsequently sued Green Smoke for breach of contract and a variety of other claims. Green Smoke responded by moving to dismiss the complaint and compel arbitration. In support of its position, Green … Keep reading

In some transactions, such as those involving the acquisition of a business, the deal may be documented through a primary contract and subsidiary agreements that are referenced in, or even attached as Exhibits to, the primary. While there is nothing inherently good or bad about papering a transaction this way, it is important to keep in mind that doing so may mean that the dispute resolution provisions of the primary contract do not apply if litigation arises and only involves a claimed breach of a subsidiary contract. Indeed, that is the hard lesson that was learned by the defendant in National Dentix, LLC v. Gold.

In 2000, National Dentix acquired Phillip Gold’s business, and the transaction was documented with three agreements: a Stock Purchase Agreement (“SPA”), an Employment Agreement (“EA”) and a Non-Compete Agreement (“NCA”). While executing the EA and NCA were conditions precedent to – and even were attached to – the SPA, the EA and NCA contained standard integration clauses, which essentially said that each contract set forth the entire understanding between the parties with respect to the subject matter thereof. Further, while the SPA contained an arbitration clause, and the EA and NCA did not, … Keep reading