One of the prime reasons many companies require employees to arbitrate disputes is to ensure confidentiality. Indeed, absent an arbitration provision, an employee can file publicly available papers containing unfounded and scurrilous allegations that leave the employer with no recourse but to litigate or settle. Moreover, even if the employer eventually prevails, severe damage may be done by having its name dragged through the mud due to the publicity associated with the claims.
As the recent decision in Boursiquot v. United Healthcare Services of Delaware confirms, however, merely having a clause mandating that disputes be arbitrated is not be enough to ensure confidentiality. And there is no reason to leave this to chance.
In the Spring of 2016, Yvlande Boursiquot was a student beginning an unpaid internship with United Healthcare. As part of her onboarding with the company, Ms. Boursiquot was asked to sign an agreement entitled “Alternative Resolution for Conflicts Agreement,” and that Agreement included the following language:
Except as it otherwise provides, this Agreement is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law or before a forum other than arbitration. This Agreement requires all such disputes to
… Keep reading
When Jeremy Hernandez, a California resident, went to work for Oxford Global Resources, a Massachusetts company, in 2013, he signed a non-competition agreement. In 2016, Hernandez resigned from Oxford and, apparently unbeknownst to Oxford, began working for one of its competitors. Several months later, Oxford received an anonymous tip that Hernandez had taken Oxford’s confidential, client information and was using it to solicit customers for his new employer. Shortly thereafter, Oxford sued Hernandez in the Superior Court in Massachusetts based on a forum selection clause stating:
All suits, proceedings and other actions relating to, arising out of or in connection with this Agreement will be submitted to the in personam jurisdiction of … the courts of the Commonwealth of Massachusetts …. Venue for all such suits, proceedings and other actions will be in Massachusetts. Employee hereby waives any claims against or objections to such in personam jurisdiction and venue. [Emphasis added]
Notwithstanding the foregoing language, Hernandez moved to dismiss Oxford’s complaint on the grounds of forum non conveniens and the Superior Court allowed that motion. Oxford appealed, and the Supreme Judicial Court of Massachusetts took the case on its own initiative (by-passing the Appeals Court). Surprisingly, the SJC … Keep reading
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
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
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
It is not uncommon for parties entering into an agreement to transfer an asset to seek the input of an independent, third-party appraiser. Plainly, the parties to any such transaction desire an appraiser who will be unbiased and will not have any conflicts of interest. Further, one would assume that if such an appraiser’s company had a relationship with the opposing party, a court would step in to invalidate the appraisal. That assumption is not always correct, however–especially if the appraisal agreement does not specify what will disqualify the appraiser. Indeed, a Massachusetts Supreme Judicial Court judge recently confirmed this in Buffalo-Water 1, LLC v. Fidelity Real Estate Company, LLC.
In Buffalo-Water, an Appraisal Agreement only required the individual appraiser to disclose any prior appraisal services he rendered for either of the parties. The appraiser’s employer, Cushman & Wakefield, was not required to make any such disclosure, nor was it required to disclose conflicts of interest or relationships that could deem it to be biased. Further, and unbeknownst to Buffalo-Water, Cushman had previously been engaged by Fidelity to represent it in connection with a national contract.
Once Buffalo-Water became aware of the Fidelity-appraiser relationship, it filed suit, seeking … 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