No company wants to be sued by its current or former employees, particularly for discrimination claims. Even if you prevail, litigating such claims inevitably exposes you to public stigma and internal discord. In such situations, an early “procedural victory” can be worth much more than the mere cost savings of legal fees. So, wouldn’t it be nice if you could do something now to either decrease the chance of such a suit being filed and/or increase the chance of obtaining a quick, procedural victory if litigation does ensue? As a recent decision in the Federal District Court, Morales v. FedEx, makes clear, a contractual “statute of limitations provision” may allow your company to achieve these objectives.
Hector Morales began working for Federal Express in 2015 and was terminated on July 31, 2017. In May 2018, Morales filed a claim with the Massachusetts Commission Against Discrimination, alleging that his termination was based on racial discrimination and was retaliatory. In July of 2020, Morales filed a complaint in the Federal District Court, alleging, among other things, that FedEx had discriminated against him in violation of 49 U.S.C. § 1981.
Eventually, FedEx moved for summary judgment on the § 1981 claim … Keep reading
Few terms make litigators shudder like the dreaded spoliation; and for good reason. The consequences of a company’s failure to preserve evidence that might be relevant in prospective litigation can be severe. What many non-litigators (including in-house counsel) may not realize, however, is that decisions made before litigation counsel is engaged can profoundly affect the chances that spoliation will later become a significant issue during litigation. A recent decision in the Business Litigation Session, JFF Cecilia LLC v. Weiner Ventures, LLC, highlights that very risk.
In JFF Cecilia, Weiner Ventures and its principals, Stephen and Adam Weiner, agreed to partner with Suffolk Construction owner, John Fish, to develop a luxury, high-rise tower on Boylston Street over the Massachusetts Turnpike in Boston. Just as construction was set to begin, the Weiners abruptly backed out of the project, which had been over a decade in the making. Four days later, on August 20, 2019, Fish sent the Weiners a formal notice, claiming that they had breached their agreement and stating that he was reserving all rights. While Fish ultimately filed suit, he did not do so until two months later. During the period between Fish’s August 20th… Keep reading
As a follow up to my post a few weeks ago on McLaren Macomb, the NLRB has issued new Guidance of which in-house counsel should take note.
- The McLaren Macomb decision is retroactive. This means that any severance agreement entered into by an employee prior to February 21, 2023, which violates the McLaren Macomb decision, is now unlawful.
- An unlawful severance agreement is a “continuing violation” of the Act, such that the six-month statute of limitations does not prohibit an employee from bringing a claim based upon a past severance agreement entered into over six months ago.
- The decision applies to current and former non-supervisory employees, which means in-house counsel must consider whether past and current severance agreements are lawful.
- Employees cannot waive their right to lawful confidentiality and/or non-disparagement clauses.
- An employee need not execute a settlement agreement for there to be a violation; the Board will find a violation of the Act if an unlawful severance agreement is offered, which could result in equitable and economic remedies in favor of the impacted employee.
- The McLaren Macomb decision impacts any employer communication to employees that tends to interfere, restrain, or coerce an employee’s Section 7 rights (i.e.,
… Keep reading
If your company, like many, includes “standard” confidentiality and non-disparagement provisions in its employee severance agreements, those agreements may contravene a recent NLRB decision, McLaren Macomb. In that matter, the NLRB considered the validity of severance agreements offered to 11 employees who were furloughed where such severance was conditioned on them agreeing to the following, seemingly innocuous, confidentiality and non-disclosure provisions:
Confidentiality Agreement. The Employee acknowledges that the terms of this Agreement are confidential and agrees not to disclose them to any third person, other than spouse . . . professional advisors . . . or unless legally compelled to do so . . . .
Non-Disclosure. At all times hereafter, the Employee promises and agrees not to disclose information, knowledge or materials of a confidential, privileged, or proprietary nature of which the Employee has or had knowledge of, or involvement with, by reason of the Employee’s employment. At all times hereafter, the Employee agrees not to make statements to Employer’s employees or to the general public which could disparage or harm the image of Employer, its parent and affiliated entities and their officers, directors, employees, agent and representatives.
Prior to McLaren Macomb, such provisions had … Keep reading
I just came across a decision issued in the District of Massachusetts, Logue v. The Rand Corporation, and it reminded me of some key aspects of the attorney-client privilege related to in-house counsel about which I have written over the years. Some of those principles include the following:
… Keep reading
While many attorneys aspire to be a General Counsel, the path to becoming a company’s chief legal officer can be even more convoluted than becoming a partner at a law firm. Recently, it was my pleasure to host an engaging panel discussion about what it takes to become a GC – and what it takes to stay there – amongst three outstanding general counsels: Jason Ellis of Staples, Thanda Fields Brassard of Fiduciary Trust of New England, and Levina Wong of Veson Nautical.
Discussion topics included:
- The skills needed to be a General Counsel and how to get them
- How the GC interacts and interrelates with the Board of Directors and C-Suite.
- What you must do as General Counsel to understand the company’s business and stay in touch with the people who run it — from the CEO to the hourly employees.
Click here to watch the webinar.… Keep reading
Company leaders—whether the GC, chief executive, or some other officer in charge—often call their outside counsel when a formal claim is made against them, or a dispute appears headed toward formal litigation. What business leaders often don’t think to do is put their insurance carrier on notice as soon as a claim is made. As a recent District of Massachusetts decision related to the heavily publicized Harvard affirmative action lawsuit reinforces, failing to alert your insurance carrier of a claim can have severe consequences.
For Harvard, these consequences materialized as a $15 million loss.
In November 2014, Harvard was sued in connection with rejecting a group of anonymous Asian American students from admission to the university. Still, the school did not provide its insurance carrier, Zurich, a notice of the claim until May 23, 2017. Zurich then denied coverage, relying on its “claims-made” policy, which requires that any claims asserted in the policy period be reported to Zurich no later than 90 days after the expiration of the policy period, i.e., by January 30, 2016. Significantly, that coverage would have applied to the $15 million in legal fees Harvard incurred to defend the lawsuit.
Incredulous by … Keep reading
The default clause of most leases provides that upon the tenant’s material default, the landlord has the right to retake possession, relet the premises at the tenant’s expense and accelerate the tenant’s rent payment obligation. In a recent decision issued by the Massachusetts Appeals Court, Cummings Properties, LLC v. Hines, the Court held that a liquidated damages provision that accelerates rent upon a tenant’s default of a lease is unenforceable unless it provides that the tenant will be credited for any rent collected from a new tenant during the balance of the lease term or discounts the stipulated damages to reflect the likelihood of reletting.
In early 2016, Massachusetts Constables Office, Inc. (“MCO”) secured a contract with the Massachusetts Department of Revenue (“DOR”), leading Darryl Hines, the owner, sole officer and director of MCO, to seek out office space in Woburn, the town where he thought the majority of his work would occur. On April 15, 2016, MCO entered into a five-year lease with Cummings, a major player in the Massachusetts commercial real estate market, with a base rent of $16,374 per year. The default provision of the lease provided that upon a default in the payment … Keep reading
As discussed in a blog post last year, Uber learned the hard way that with online agreements, it can take more than a simple provision stating “all disputes must be arbitrated” to ensure that your customers cannot sue you in a court of law. In a recent decision issued by the Massachusetts Superior Court (Good v. Uber Technologies, 2022 WL 10448746), Uber was foiled again – even though it had initiated what it must have thought were fool-proof protocols to prevent it from being hauled into court.
William Good had been an Uber user since August 13, 2013, and on April 25, 2021, he tried to order a ride but was blocked by a pop-up message stating: “We’ve updated our terms.” The pop-up message went on to say: “We encourage you to read our updated in Terms in full.” Among those terms was a provision stating that Uber’s customers were “required to resolve any claim against Uber … in arbitration.”
Many states are now enacting laws to further promote pay transparency, and if you have employees in those jurisdictions, you need to take note. Not surprisingly, California’s Pay Transparency Act is a leading example of this and has a number of important and new requirements.
First, California employers with 15 or more employees will be required to include pay scales in new job postings. This obligation extends to employers engaging in a third party for recruiting (e.g., job posting boards). Employers, therefore, should ensure that contracts with third parties include this requirement and appropriate indemnification clauses.
Second, California now – like Massachusetts (see M.G.L. c. 149 § 105A(c)(2)) – prohibits employers from asking about an applicant’s salary history or using salary history as a factor in a hiring decision. However, if an applicant voluntarily discloses salary information, employers may consider that information in determining the salary for that applicant. Further, employers may ask about an applicant’s salary expectations – which is a great way to engage in a conversation that might yield information helpful to hiring without risking a statutory violation.
Third, California now requires employers to disclose a position’s pay scale to an applicant … Keep reading