It makes perfect sense that when entering into a new business relationship the parties (and their counsel) are keenly focused on getting things started. While there is nothing wrong with this, sometimes parties forget to memorialize, or even discuss, when, how and under what circumstances their contractual obligations will end. A recent case from the Massachusetts Appeals Court, Robert and Ardis James Foundation v. Meyers, reminds us that failing to spell out when a contract ends can result in seemingly unfair consequences.
No doubt, ensuring that any agreement is consistent with judicial precedent is critical if you want to enforce that agreement at some point in the future. Nevertheless, merely incorporating precedential concepts or language into an agreement may not be enough to get your client to where it wants to be, and may even result in your client being put in a more difficult position than if the precedent had been ignored. Nowhere is this more apparent than when a company seeks to draft and implement a standard and seemingly straightforward noncompete covenant.
The obvious purpose of a liquidated damages provision is to make your client whole in the event that your business partner breaches the agreement. Nevertheless, K.G.M. Custom Homes. v. Prosky highlights that simply having a valid and enforceable liquidated damages provision is not enough to ensure this.
For years, the Massachusetts Maternity Leave Act (“MMLA”), M.G.L. c. 149, §105D, only applied to female employees by its literal terms. The Massachusetts Commission Against Discrimination (“MCAD”), the agency tasked with enforcing the MMLA, has taken the position that if the MMLA was applied literally, it would be unconstitutional, as it would give female employees greater employment rights than men. Although initially intended to protect women who were giving birth to children, since the MMLA also protects women who adopt children, it is not about the physical “disability” associated with giving birth to a child. Thus, the argument goes, men should also be covered by its protections. The conflict between the literal terms of the MMLA and the MCAD’s guidelines for interpreting the MMLA created difficulty for employers who were not subject to the Family and Medical Leave Act (which entitles eligible employees, regardless of gender, to up to 12 weeks of unpaid leave for the birth or adoption of a child).
On his last day in office, Governor Deval Patrick settled the matter once and for all, by signing into law a bill that expressly expands the protections of the MMLA to all employees, regardless of gender.
In order to obtain a an injunction under federal law, the moving party has to show each of the following:
(i) It has a likelihood of success on the merits of its claim.
(ii) Without injunctive relief, it would risk suffering irreparable harm.
(iii) Such harm outweighs the irreparable harm that the non-moving party would suffer if an injunction were to enter.
(iv) Entering an injunction is in the public interest.
In addition, however, Rule 65(c) of the Federal Rules of Civil Procedure states that:
The court may issue a preliminary injunction or a temporary restraining order only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.
Indeed, as a recent case from the District of Massachusetts confirms, this is no small technicality, and something to which any company should give due consideration before having its outside litigation counsel seek injunctive relief.
As indicated in a recent blog post in the Harvard Business Review, entitled “Who Has Paid Sick Leave, Who Doesn’t, and What’s Changing,” paid sick leave traditionally was a benefit that only some employers provided, and in some cases only to certain employees. In recent years, however, increasing numbers of cities and states have begun mandating that employers provide this traditionally voluntary benefit. In fact, if President Obama makes good on his promise from his State of the Union address, there will be a national standard for mandatory paid sick leave. With the fast-changing landscape of rules and regulations related to paid sick leave, in-house counsel and employers need to keep alert. In Massachusetts, for instance, voters approved a ballot measure which goes into effect on July 15, 2015.
When seeking preliminary injunctive relief to enforce a non-compete, the moving party is often focused on how obvious it is that the defendant breached the parties’ agreement. As 7-Eleven recently learned, however, even when there is a valid and enforceable noncompetition provision and a clear breach of it, unless you can show that you will suffer irreparable harm without an injunction, and that such harm outweighs the irreparable harm to the defendant that an injunction would inflict, a court will not issue injunctive relief. Continue Reading
Letters of intent (LOI) are routinely used after business people have reached some degree of common ground on a potential deal. Sometimes an LOI comes very early on, before the parties know whether an ultimate agreement is likely or not. In other situations, however, LOI’s are entered into only after there is agreement on all the key business terms. Even in those cases, however, deals often crater during the process of negotiating a full-blown contract. This can be the result of one side simply getting cold feet and/or otherwise changing its mind about moving forward. Further, all too often the party left at the altar can do nothing but lament the fact that it expended a lot of time and money with nothing to show for it. Here are two strategies in-house counsel might consider employing in the LOI process to limit the risk that they have to go back to their internal client and explain that even though there was a letter of intent, the other side walked away from the deal and there is nothing that can be done about it.
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.