In Some Cases Victory Can be Determined by a Preemptive Suit


First to file in local jurisdictionIn my recent post, Ensuring Your Dispute is Resolved in the Forum You Want is Not Always Easy, I discussed various issues related to contractual forum selection clauses, i.e., clauses which dictate where parties can or must sue.  If a contract does not have a forum selection clause, courts in each of the contracting parties’ home states might be able to exercise jurisdiction over a dispute.  Further, and as many in-house counsel have experienced, the ultimate venue for litigation can create a substantial amount of leverage in favor of the home team and work to the detriment of the out-of-state party. 

If you believe that your company is likely to be sued by another in some far off jurisdiction, consider the following advice:

If you know you are going to be in a fight, make sure to get in the first punch."

I can’t emphasize enough the importance in evaluating whether you are going to be sued – as opposed to whether you might be sued. If you do not see any way to avoid litigation, following the above rule can pay real dividends, as it did for one of my clients several years ago.  In … Keep reading

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NLRB Employee Confidentiality


NLRB Employee ConfidentialityIn a prior post, I had discussed the importance of properly investigating allegations of sexual harassment.  Now, the National Labor Relations Board (NLRB) has added a related issue to consider: When can employers prohibit employees from discussing ongoing investigations? 

In its July 31, 2012 decision in Banner Health Systems, d/b/a Banner Estrella Medical Center and James A. Navarro, the NLRB held that Banner Health’s ongoing policy to instruct employees not to discuss ongoing investigations of employee misconduct with other employees was unlawful.  This decision was grounded in the finding that Banner Health did not have business interests that outweighed the employees’ rights under Section 7 of the National Labor Relations Act to engage in protected, concerted activity for mutual aid and protection.

In Banner, the employer’s human resources consultant routinely informed employees when they complained of employee conduct in violation of company policies or law that they should not discuss the matter with other employees while the investigation was ongoing.  Banner Health based its prohibition on its “generalized concern over protecting the integrity of its investigations;” however, the NLRB found Banner Health’s justification unpersuasive and insufficient to override employee rights under Section 7, which states:

Employees

… Keep reading
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While many employers take comfort in knowing that some or all of their employees have agreed to non-compete covenants, obtaining and enforcing such agreements does not come without costs.  As such, it is important for in-house counsel to explore with their business clients whether it really makes legal and economic sense to seek such agreements.  Among the issues you may want to raise are the following:

Issue # 1: How Likely is it that the Contemplated Non-Compete Would Be Enforceable?

Most in-house counsel who have had any dealings with non-compete covenants know that if such a covenant merely limits competition, it is not enforceable.  Because many business clients do not have a clear understanding of this counterintuitive principle, in-house counsel can save a lot of future angst if they make sure that the business people know right from the start that a non-compete covenant only is enforceable if it is necessary to protect confidential information, goodwill or trade secrets.  Indeed, because there are many situations in which none of these three interests will be protected by a non-compete, if your client knows this up front, s/he may decide that it is not worth the time and expense to even … Keep reading

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It is pretty standard fare to have what is commonly known as an “integration clause” in a business contract.  Such clauses generally state things like the following:

This Agreement constitutes the entire agreement between the Parties relating to the subject matter reflected herein.  All prior negotiations, representations, agreements and understandings between the parties with respect thereto are merged into, extinguished by and superseded by the terms of this Agreement.” 

While many in-house counsel would like to think that such a clause provides bullet-proof assurance that whatever the contract says will control, that is not always the case.  Even the most well-crafted and comprehensive integration clause may not prevent a disgruntled former business partner from claiming that he or she was fraudulently induced into entering into the contract.  Further, if such a fraud claim can be established, that party then can steamroll right over the parol evidence rule and seek to introduce evidence of supposed agreements that supplement or contradict those in the written contract between the parties.  As the Massachusetts Supreme Judicial Court said over 20 years ago in McEvoy Travel Bureau, Inc., v. Norton Co., “[i]t is well established that the parol evidence rule does not apply … Keep reading

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Employers Still Required to Provide Unpaid and Work-Free Maternity Leaves


Yahoo!, Twitter, Facebook and every possible media outlet have been aflutter with praise and criticism since newly appointed Yahoo! CEO Marissa Mayer announced to Fortune magazine that she is pregnant and taking a “few weeks” of maternity leave and will be “working throughout it”.  Though this may be heartening for Yahoo! investors, the typical employer is reminded that its employees are not Mayer and are not likely to follow in her footsteps.  Rather, employers must remember that there are federal and state laws that require employers to provide protected leave for many of their employees.  Here are five important reminders:

Reminder #1:  “Leaves” require a return to work.

The term “leave” is a bit misleading, as the key is “protected” leave, which is the right to take a leave of absence and  return to his or her job.  Protected leave also means that during the leave, no work is to be done or requested of the employee.

Reminder #2:  Leaves may be doubled or tripled for multiple births. 

In Massachusetts, a full-time, female employee who has worked at least three (3) consecutive months as a full-time employee or has completed the “initial probationary period set by … Keep reading

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In my March 29th post on the attorney client privilege, I specifically noted that communications between in-house (or outside) counsel and employees or former employees could be privileged if the purpose of the communication was to enable the attorney to provide legal advice.  As I just learned the other day, however, under some circumstances, communications between a lawyer and an independant contractor or consultant hired by the true client can be protected by the attorney client privilege.

Starting way back in 1994, the 8th Circuit, in In re Bieter Company, held that the attorney client privilege could apply to communications between counsel and independent contractors of a client if “it [would be] inappropriate to distinguish between those on the client’s payroll and those who are instead, and for whatever reason, employed as independent contractors.”

While the Bieter case did not set forth a specific test to analyze under what circumstances a non-employees’ communications with counsel might remain privileged, a number of cases since have generally agreed that the key issue will be whether the individual is the “functional equivalent” of an employee.  So what does it mean to be the functional equivalent of an employee?  … Keep reading

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Prevent Employer Liability By Properly Investigating Sexual Harassment Claims


A recent decision by a full panel of the Massachusetts Commission Against Discrimination (MCAD) emphasizes the need for supervisors to understand their duty to act to ensure that unlawful harassment allegations are addressed and that any such conduct ceases.

Since 1998, two cases decided by the U.S. Supreme Court, Faragher v. City of Boca Raton and Burlington Industries v. Ellerth, enable employers to avoid liability for employee claims of sexual harassment based on a hostile work environment brought under Title VII of the Civil Rights of 1964 if: (1) the employer took reasonable care to prevent and promptly correct the harassing or discriminatory behavior, and (2) the employee unreasonably failed to take advantage of the preventive or corrective opportunities provided.  Employer policies, training for its supervisors and investigative processes are taken into consideration in determining whether there were sufficient preventive or corrective opportunities provided to employees.  If the conduct, however, results in a tangible employment action such as a demotion or termination, then the Faragher/Ellerth affirmative defense is unavailable to the employer.

Although many states have not adopted this defense, a few states have advanced the law at the state level, at least in theory, to permit employers … Keep reading

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Emails Can Satisfy the Signature Requirement of the Statute of Frauds


Every once in a while, I actually do go on vacation.  So, my colleague, Alan E. Lipkind, a partner in the Business Litigation and Real Estate groups at Burns & Levinson, has contributed this post on the recent decision by a Massachusetts court finding email communications can satisfy the signature requirement in the Statute of Frauds.

 

Most of us know the basics of the Statute of Frauds: Certain contracts, including those pertaining to real estate, goods worth more than $500, and guarantees, as well as those that can’t be performed within one year, must be in writing and signed in order to be binding.  In a recent case where I represented prospective purchasers of real property, the Massachusetts Superior Court found that an email exchange among parties pursuing a real estate purchase transaction satisfied the signature requirement embodied in the Statute of Frauds. 

In Feldberg v. Coxall, buyers’ counsel emailed to seller’s counsel a proposed offer to purchase real estate which included a financing contingency.  The next day, the seller emailed buyer’s counsel directly, stating that if a written approval letter from the buyer’s lender was received by 5 p.m., “I think we are ready … Keep reading

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Litigation is time-consuming, is costly and, even in a business context, can be emotionally draining.  Thus, it makes perfect sense that in-house counsel and business people, alike, often try to implement mechanisms to avoid having to file or defend suits.  One such method, about which I posted earlier this year, is the use of a liquidated damages provision.  Another that has become increasingly popular is to include a requirement that the parties meet and confer before they can file suit. A typical version of such a clause that I periodically see in contracts is one like the following:

Before a party may file suit, it first must give the other party written notice of the dispute.  After notice is received, representatives of each party shall meet within 5 days in a good faith effort to resolve the dispute.  If the dispute cannot be resolved within 5 days after such meeting, suit may be filed.

… Keep reading
New Fee Disclosure Requirements Affecting Participant-Invested Retirement Plans


As of August 30, 2012, administrators of retirement plans that allow participants to select investment of their accounts will be required to disclose specific information about the fees associated with such investments.  One of my talented partners in the Labor, Employment and Employee Benefits Group at Burns & Levinson, Evelyn Haralampu, provides some simple guidance about these new disclosure requirements.  Click here to read her update.… Keep reading

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