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
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
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
While the attorney-client privilege only protects confidential communications between an attorney and client that are for the purpose of giving or receiving legal advice, the work product doctrine, as codified in Fed. R. Civ. P. 26(b)(3), is much broader:
Ordinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party’s attorney, consultant, surety, indemnitor, insurer, or agent) ….
Further, given that the work product privilege is designed to protect an attorney’s mental impressions, federal common law has extended work product protections to verbal communications even if they are not memorialized in documents and/or in other tangible ways. Having said that, however, as the Northern District of California recently discussed in Schenwick v. Twitter, assuming that the work product privilege will protect your attorney’s communications with a non-party can be a risky proposition.
In Schenwick, the plaintiff’s representative interviewed several “confidential” witnesses prior to filing suit, and the defendants sought to discover what was said in those interviews. Defendants objected based on the work product privilege, and the Norther District of California made three underlying rulings … Keep reading
Companies often use written Employment Agreements to set out the duties/responsibilities of, and the compensation/benefits to, some or all of their employees. The most obvious reasons for doing so are to ensure clarity and limit the chance that either might misunderstand the other’s expectations. While using such documents is all well and good, what happens when an employee takes on responsibilities that go beyond the scope of what is covered by a written agreement? As one Massachusetts company recently learned, the answer to this question can be unpredictable and expensive.
In 1988, Ronald Nardone began working for LVI Services, and he eventually rose to become corporate vice-president of business development. At various times from 1997-2005 LVI was searching for investors, and Nardone became part of the “roadshow presentation” team that sought such investments. In that regard, LVI’s one-time President, Burton Fried, testified:
I asked [Nardone] if he wanted to appear and give the presentation on behalf of the business development aspect of the business and he said yes. … I didn’t require him, he just accepted the invitation.
After one of the roadshows in 2005, Nardone learned that a large investment was going to be made, and all of … Keep reading
Over the years, I have written a lot of blog posts on the attorney-client privilege, and they cover a wide variety of issues. One issue that comes up very frequently (whether in-house counsel realize it or not) is what happens when a communication with an attorney intertwines legal and business advice? As Marriott Vacations Worldwide found out last year, the answer is not always crystal clear and, more importantly, may create issues for in-house counsel and the client.
As part of Marriott’s discovery responses in RCHFU v. Marriott Vacations Worldwide, the company objected to producing a strategic plan memorandum to the Corporate Growth Committee (the “CGC”) based on the attorney-client privilege. The plaintiff challenged Marriott’s objection, which left Marriott with the burden of proving that the CGC memorandum was privileged. In analyzing the issue, the Court began by recounting a few overarching principles:
Business communications are not protected merely because they are directed to an attorney, and communications at meetings attended or directed by attorneys are not automatically privileged as a result of the attorney’s presence. The corporation must clearly demonstrate that the communication in question was made for the express purpose of securing legal not business
… Keep reading
As I discussed in a blog post several years ago, even an informal email can constitute acceptance of a contractual offer. Moreover, just a few months ago, Judge Timothy Hillman took this principle one step further by ruling, in Witt v. American Airlines, that an exchange of emails can form a binding settlement agreement, even if the parties have not agreed to all of the terms of that settlement.
In 2014, Diane Witt sued American Airlines for injuries she claimed to have sustained while on a flight. After litigating that case for more than three years, the parties finally engaged in serious settlement discussions. Ultimately, American Airlines’ counsel sent the following email to Witt’s counsel:
I have been informed $15,000 is firm (together with acceptable release) and that the settlement must happen promptly before more costs are incurred. This really needs to get done this week and certainly before any further hearing for the experts have to spend any more time preparing for deposition.
Witt’s counsel eventually responded: “Thanks for getting back to me. Ms. Witt accepts the settlement offer of $15,000. Please send the proposed release when you can.”
Less than one month later, however, Witt’s counsel … Keep reading
In this installment of The In-House Advisor, we interview Bill Gabovitch, General Counsel at Primark U.S. Corp. Primark is a fast-fashion retailer, based in Europe, with 350 stores in 10 countries. The company’s first U.S. store opened three years ago – in the former Filene’s space at Downtown Crossing, Boston – and it now operates nine stores in five Northeast states. Bill is a former associate general counsel at Staples, a former associate at two Boston law firms, and a graduate of Indiana University and the University of Pennsylvania School Of Law. He lives in Newton, MA, with his wife Lauren and their daughters Rebecca and Naomi.
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 years?
Bill Gabovitch: Overall, the value that an in-house counsel brings to the table is in how much he or she helps the business achieve its objectives with the lowest reasonable risk. Sometimes that involves helping on a transaction or a strategy, or choosing the right way to deliver the company’s products or services to the market, after properly assessing for … Keep reading