Header graphic for print
The In-House Advisor Published by Shepard Davidson & Renee Inomata

Category Archives: Pre-Litigation Considerations

Subscribe to Pre-Litigation Considerations RSS Feed

The Value of a Non-compete Agreement to an Acquiring Company Can Be Limited

Posted in Contracts, Noncompetition & Other Restrictive Covenants, Pre-Litigation Considerations

It is standard practice in M&A transactions for the acquired business to assign all of its contractual rights to the purchaser. While that may sound good in theory, depending upon how the underlying contracts are drafted, they could have little or no value to the purchaser. Indeed, as the Massachusetts Superior Court’s decision in NetScout,… Continue Reading

Careful Drafting of Non-Competes and Other Restrictive Covenants Can Save the Day

Posted in Contracts, Noncompetition & Other Restrictive Covenants, Pre-Litigation Considerations, Separations, Layoffs & Terminations

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… Continue Reading

Even Conduct That Is Not Barred by a Contract Can Lead to Contract Damages

Posted in Contracts, Pre-Litigation Considerations, Settlements and Releases

In Exercising Contractual Rights Can Be Risky If It Is for an Ulterior Purpose, I discussed how a business can subject itself to multiple damages and attorneys’ fees under Mass. General Laws, Chapter 93A if it attempts to enforce its contractual rights maliciously. In a recent, parallel decision, Robert and Ardis James Foundation v. Meyers, the… Continue Reading

Be Careful What You Ask for When Agreeing to Arbitration

Posted in Arbitration and Mediation, Contracts, Pre-Litigation Considerations

In 2014, I posted Carefully Craft Your Arbitration Clause if You Want Some, But not All, Disputes Arbitrated.  A decision a few months ago, Trustivo, LLC v. Anthem, Inc. is a reminder that if a contract has a broad arbitration provision, a party may have little chance of getting court intervention – even in situations  where… Continue Reading

Give Employees a Chance to Explain Before Terminating Them

Posted in Contracts, Discipline & Performance Management, Hiring, Pre-Litigation Considerations

As regular readers of this blog know, a day that is scheduled to be filled with relatively routine and non-controversial matters can get turned upside and require immediate action without any advance notice. One such situation occurs when information comes to light that an employee is unfit to continue in his or her current position… Continue Reading

Don’t Take Needless Chances When It Comes to Personal Jurisdiction, Forum Selection and Choice of Law

Posted in Contracts, Jurisdiction, Venue and Choice of Law, Letters of Intent, Pre-Litigation Considerations

Not spelling out in your agreements, even in informal agreements, where disputes can be resolved and what law will govern them can lead to some unhappy results. That is exactly the position that United Excel Corporation and its president, Ky Hornbaker, now find themselves.

Keeping Communications With Other Parties Confidential Through the “Community of Interest Privilege”

Posted in Attorney-Client Privilege, Pre-Litigation Considerations

One of my law school classmates asked me several month ago about the merits of entering into a joint defense agreement with another party to protect communications he had with that party’s counsel in connection with a potential dispute with a third company. He was concerned that entering into such a joint defense agreement might… Continue Reading

Obtaining or Avoiding a Freeze on a Bank or Other Financial Account Can Require Swift Action or Reaction

Posted in Injunctions and Attachments, Pre-Litigation Considerations

During the dog days of summer, anything with the word “freeze” may sound appealing. But if the freeze is a “trustee process attachment” (tying up a bank or other institutional account), a whole different set of emotions can be evoked. As I discussed in Gain Leverage by Freezing Bank Accounts – Part I and Part… Continue Reading

Make Sure You Can Afford to Pay a Bond Before Seeking an Injunction

Posted in Contracts, Injunctions and Attachments, Pre-Litigation Considerations

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… Continue Reading

Don’t Overlook The Need to Show Irreparable Harm When Seeking Injunctive Relief to Enforce a Non-Compete

Posted in Contracts, Injunctions and Attachments, Noncompetition & Other Restrictive Covenants, Pre-Litigation Considerations

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… Continue Reading

Tips To Ensure Recovery of “Prevailing Party” Legal Fees

Posted in Contracts, Pre-Litigation Considerations

While it may not be standard practice when drafting contracts to include a clause stating that “if litigation between the parties ensues the prevailing party will recover its legal fees,” such provisions do appear in a variety of contracts from time to time. A recent First Circuit opinion, Thompson v. Cloud, involves such a clause… Continue Reading

Three Reasons to Bring Your Next Lawsuit in Massachusetts

Posted in Jurisdiction, Venue and Choice of Law, Pre-Litigation Considerations

It is not unusual for a plaintiff to have the ability to choose from at least two states when deciding the venue of a litigation. In such situations, many automatically choose to file suit in their home state, without giving much thought to potential advantages or disadvantages beyond having a home field advantage and/or forcing… Continue Reading

Three Ways in Which Enforcement of Non-Competition Agreements is Like Dating

Posted in Injunctions and Attachments, Noncompetition & Other Restrictive Covenants, Pre-Litigation Considerations

In a prior blog post Three Issues In-House Counsel Should Raise Before Asking Employees To Sign Non-Competes, my co-publisher, Shep Davidson, provided suggestions to help in-house counsel ensure that non-competition restrictions on employees were appropriate and enforceable. As it is Valentine’s Day, we look at three ways in which enforcement of non-competition agreements is like… Continue Reading

Internal Investigations Can Lead to a Waiver of the Attorney-Client Privilege

Posted in Attorney-Client Privilege, Harassment, Pre-Litigation Considerations

As I have discussed in other blog posts, communications with in-house counsel that are not for the purpose of obtaining legal advice are not privileged. But what happens when outside counsel is hired to investigate a claim of harassment in the workplace and a second outside counsel is hired to provide legal advice?  Anyone who thinks… Continue Reading

Limiting Intra-Company Conversations About Disputes is Critical

Posted in Attorney-Client Privilege, Pre-Litigation Considerations

When an employee talks to in-house or outside counsel for the purpose of obtaining legal advice for the company, that communication will be privileged and can be protected from disclosure.  Likewise, when in-house counsel is meeting with several employees at the same time for the purpose of gathering information to be used for legal advice,… Continue Reading

Re-Publishing a Third-Party’s Unbiased Endorsement Can be Perilous

Posted in Pre-Litigation Considerations

It should come as no surprise that making a false statement about a competitor’s product or service is actionable.  Similarly, albeit slightly less obvious, repeating a false statement that someone else makes about a competitor also may be actionable if you have reason to believe that the statement is false or if you recklessly repeat… Continue Reading

Be Cautious When Tempted to Leverage Another into an Agreement

Posted in Contracts, Pre-Litigation Considerations

Sometimes, when business people can’t directly negotiate (or re-negotiate) favorable deal terms, they are tempted to withhold a payment or some other obligation in an effort to leverage the other party into an agreement it otherwise would not make.  In-house counsel should be wary of endorsing such conduct, as this could result in exposing their… Continue Reading

Be Sure That Your Integration Clause Remains Enforceable

Posted in Contracts, Pre-Litigation Considerations

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… Continue Reading

It Isn’t Always a Good Idea to Negotiate Before Filing Suit

Posted in Arbitration and Mediation, Contracts, Pre-Litigation Considerations

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… Continue Reading

Arbitration vs. Litigation – Substantive Differences Beyond Time and Expense

Posted in Arbitration and Mediation, Discovery, Pre-Litigation Considerations

In an earlier post, “Is Arbitration Quicker, Cheaper and Better for You?” I discussed why having a faster and less expensive dispute resolution mechanism may not be in your best interest.  Make no mistake, however, the differences between traditional litigation and arbitration go well beyond the time and expense it takes to complete the respective… Continue Reading