Contracts

It is not unusual for business people and/or in-house counsel to consult with accountants or other non-party experts when contemplating a potential business transaction. As the defendants in The C Company, Inc. v. Hackel recently learned, however, trying to protect such communications from disclosure based on the attorney-client privilege can be difficult, if not impossible.

In The C Company, attorney Todd Goldberg represented Michael Hackel and Dining-In, Inc. in connection with a 2008 transaction with The C Company and Nicholas Cercone. During negotiations, an employee of The C Company emailed a draft agreement to the company’s outside accountant, and asked him to evaluate the tax implications of the contemplated transaction. The accountant provided that advice, after which Attorney Goldberg and the accountant exchanged their own emails so that Attorney Goldberg could better understand the accountant’s viewpoint. After litigation related to the transaction was filed by The C Company and Cercone, they sought to discover all of the foregoing communications, and the defendants took the position that such communications were protected by the attorney-client privilege. In analyzing the matter, the Superior Court Judge began by stating that:

Massachusetts recognized the so-called “derivative” attorney-client privilege. Under this doctrine, the attorney-client

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Often, when settling a dispute, I include a general release that goes something like this:

Releasors hereby forever release and discharge Releasees from, and/or based on, any and all suits, etc. which Releasors ever had, now have or may in the future claim to have against Releasees, arising out of any acts or conduct that occurred from the beginning of time to the date of this Agreement.

Plainly, such a release is intended to “wipe the slate clean” and give the parties the comfort of knowing that neither can be sued by the other for any conduct that occurred up to that point in time – whether the other party knows about the conduct/claim or not.  As a recent case from the Superior Court, Fratea v. Unitrends, Inc., reminds us, however, a general release of this sort will not bar a former employee from pursuing a claim under the Massachusetts Wage Act.

When Michael Fratea left the employment of Unitrends, he executed a release in exchange for the payment of $1,875. Thereafter, Fratea filed suit against the company and two individuals, alleging a violation of the Wage Act because he was not paid overtime compensation. The defendants … Keep reading

In a recent blog post, I discussed how all-encompassing a fiduciary duty can be and how in-house counsel in closely held businesses might want to advise insiders about measures that could curb or even eliminate some of those duties. A new case from the Massachusetts Superior Court, Christensen v. Cox, highlights some other need-to-know aspects of fiduciary duties.

Clayton Christensen is a leader in the field of “disruptive innovation,” and he and his brother, Mathew, are involved in at least two companies working in that area, Disruptive Innovation GP, LLC and Rose Park Advisors, LLC. In 2010, Shawn Cox was hired as an employee at will of Rose Park, although he ended up providing various services to both companies. In April of 2013, Cox notified the Christensens that he would be taking a new job, and his last day of employment with Rose Park was at the end of May.

Shortly after Cox left, he asserted that he had been given equity in Disruptive Innovation and demanded a distribution based on that equity. While the Christensens disputed that Cox had been given any equity in Disruptive Innovation, Cox pointed to an April 2013 memo (signed by … Keep reading

When two parties reside and/or conduct business in different states, any agreement between them almost always has a choice of law provision. Typically, such a clause is as simple as: “The Parties agree that this Contract shall be governed and construed in accordance with the laws of the Commonwealth of Massachusetts.” As the Superior Court held earlier this month in Oxford Global Resources, LLC v. Hernandez, however, such simple and straight-forward language is no guaranty that a court will abide by it.

Oxford is a Delaware corporation and claims to have its principal place of business in Beverly, Massachusetts. Jeremy Hernandez is a California resident and was hired by Oxford to work in the company’s California office. As part of the hiring process, Hernandez was required to sign Oxford’s Protective Covenants Agreement, which included (i) non-compete and non-solicitation covenants; and (ii) a provision stating that the Agreement was governed by Massachusetts law.

Oxford later brought suit against Hernandez, alleging that he breached the Agreement by using information regarding Oxford’s customers to solicit them on behalf of a competitor. Hernandez countered by moving to dismiss, and, in that connection, he argued that the Court should construe the Agreement in … Keep reading

It generally is a defense to a breach of contract claim if the defendant proves that the plaintiff was the first one to materially breach the parties’ agreement. As a recent case from the Business Litigation Session of the Massachusetts Superior Court confirms, however, a plaintiff seeking to enforce a post-employment restrictive covenant can avoid falling victim to such a defense – if, that is, the company has a carefully crafted agreement is in place.… Keep reading

It’s human nature to engage in an emotional exhale after reaching an agreement in principle to settle a long-standing or hard-fought dispute. While doing so is all well and good, it is critical that you don’t let that deter you from exercising extreme focus on documenting that settlement in a carefully crafted agreement. Indeed, as the plaintiff in Zvi Construction v. Levy found out a few weeks ago, failing to do so can leave your client in a position where it is unable to obtain the fruits that it rightfully deserves.… Keep reading

So your company is considering getting into a new area of business, and to do so, it will have to hire a variety of talent. While the launch of the new venture is not a certainty, the prospects of it are enticing, and time is of the essence. Thus, when talking to potential new hires, you want to focus on the positives and the possibilities. As a recent decision from the federal District Court, Bhammer v. Loomis Sayles and Company, Inc., makes clear, however, failing to disclose factors that may affect the viability of the new opportunity can be fraught with peril.… Keep reading

In an ideal world, any modification of a contract would be in writing, signed by the parties, notarized and witnessed by an independent third party. In the real world, not only are contracts modified, or terms waived, without all of those formalities; but it is not at all unusual for business people to modify agreements orally with little more than a handshake.  Nevertheless, the enforceability of a specific oral modification or waiver can be as unpredictable as the New England weather.… Keep reading

We have all heard stories about the dangers of social media, whether it be an inappropriate tweet, a regrettable Facebook posting or a misdirected “sexting.” The decision issued by the Massachusetts Land Court in St. John’s Holdings, LLC v. Two Electronics, LLC  adds another peril to that list. It held that a text message sufficient to satisfy the signature requirement under the Statute of Frauds. … Keep reading