Shep Davidson


As I discussed in “Be Cautions When Tempted to Leverage Another into an Agreement,” exerting leverage to force a business partner into settling a dispute could constitute deceptive or unfair acts or practices in violation of M.G.L. c. 93A – which allows for awards of multiple damages and attorneys’ fees. But can validly exercising one’s contractual rights also expose a company to Chapter 93A liability? According to the Massachusetts Supreme Judicial Court, it can.… Keep reading

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In the course of its decision in Chambers v. Gold Medal Bakery, Inc., the Supreme Judicial Court of Massachusetts highlights a number of important rules related to the attorney-client privilege, as well as various rights and duties of officers and directors in closely held corporations.  While it is important to understand the detailed facts of Chambers in order to gain a full appreciation of its multitude of specific rulings, the overarching story is a familiar one that has played itself out over and over again (with the most notorious example being Demoulas v. Demoulas).… Keep reading

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Most businesses have a variety of insurance coverage that they hope never to have to utilize. If and when the time does come to exercise one’s rights to the benefit of such a policy, however, the last thing any in-house counsel wants is to be unaware of a technicality that could lead her company to forfeit those rights. Unfortunately for The Saint Consulting Group (“Saint”), that is exactly the situation in which it recently found itself.

In April of 2010, Saint purchased an insurance policy that covered “a Wrongful Act” made by “Insured Persons.”  As often is the case with insurance policies, while the actual insurer was The Hartford, Saint had purchased the policy through an agent, the Eastern Insurance Group, LLC. 

On June 23, 2010, Saint was sued on a variety of theories of liability arising out of the work that it undertook on behalf of a client. Because Saint wanted to avail itself of the benefits of its insurance policy with The Hartford, which included the cost of defending the litigation, Saint sent Eastern Insurance notice of the lawsuit and included copies of the complaint and first amended complaint at issue. While Eastern Insurance forwarded on that … Keep reading

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In a previous blog post, The Fiduciary Duty of Preserving Corporate Opportunities, I wrote:

In general, an officer, director, partner, LLC member or shareholder in a closely held corporation owes a fiduciary duty not to usurp for his personal benefit, a business opportunity that could and should belong to the corporation.  

While I have no qualms about that statement, a recent decision out of the Massachusetts Superior Court found that a company insider was not liable for breach of fiduciary duty even though she terminated her employment relationship with the company and started her own independent business that undertook the exact same work she had been doing for her prior company.  … Keep reading

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As in-house counsel, how would you like to tell your CEO: “While our customer lists, pricing information, and business processes are trade secrets, we can’t sue the independent contractor who stole them because we did not do enough to protect those trade secrets.”  Sound contrived?  Well, that is exactly the ruling one Massachusetts Superior Court judge recently issued in C.R.T.R., Inc. v. Lao. … Keep reading

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In Commodity Futures Trading Comm’n v. Weintraub, the United States Supreme Court noted that:

[W]hen control of a corporation passes to new management, the authority to assert and waive the corporation’s attorney-client privilege passes as well. New managers installed as a result of a takeover, merger, loss of confidence by shareholders, or simply normal succession, may waive the attorney-client privilege with respect to communications made by former officers and directors. Displaced managers may not assert the privilege over the wishes of current managers, even as to statements that the former might have made to counsel concerning matters within the scope of their corporate duties. [Emphasis added.]

While the foregoing may not seem too surprising to some, what if I told you that the new owners of a business can waive the privilege with respect to communications that the former owners had with company counsel solely to use those communications as evidence against the former owners in litigation? Well, that is exactly what the Delaware Court of Chancery recently allowed to happen in Great Hill Equity Partners v. Sig Growth Equity Fund, LLP.… Keep reading

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More than once, an in-house counsel has called me up wanting to sue a former employee because s/he has been “bad-mouthing” the company despite having agreed not to disparage the company as part of a settlement or severance agreement.  Nevertheless, I Often have had to give the client the bad news that, in light of the actual contractual language, there would be little chance of prevailing and/or, even if we did prevail, the legal fees probably would exceed the damages we might reasonably expect to recover.  The good news for those of you reading this post, however, is that there are three simple steps you can take to greatly enhance the effectiveness and enforceability of any non-disparagement clauses you would like to implement in the future. … Keep reading

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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 that the subsequent communications involving those outside counsel will automatically be privileged had better read the recent decision by Magistrate Judge Kenneth P. Neiman (District of Massachusetts) in Koss v. Palmer Water Department.… Keep reading

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Porreca v. The Rose Group was a class action lawsuit brought by Carly Porreca and Charles Walton, alleging that their employer, Applebee’s Neighborhood Grill and Bar, had violated the Fair Labor Standards Act. After Porreca was dismissed from the lawsuit, the restaurant management company that owned and operated the Applebee’s at which Porreca and Walton worked, the Rose Group, sought a stay of the litigation as well as an order (i) compelling Walton to arbitrate his claim individually, and (ii) barring him from pursuing a class action in that arbitration.  In support of this request, the Rose Group relied on the fact that Walton had signed an agreement binding him to the company’s Dispute Resolution Program, which specifically stated the following:

The Company and I agree that all legal claims or disputes covered by the Agreement must be submitted to binding arbitration …. We also agree that any arbitration between the Company and me is of an individual claim and that any claim subject to arbitration will not be arbitrated on a collective or a classwide basis …. 

… Keep reading
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Recent New Jersey Case Highlights Several Aspects of the Corporate Attorney-Client Privilege


In Hedden v. Kean University, the New Jersey Appellate Division ruled that an email sent by the University’s women’s basketball coach to the school’s in-house counsel was privileged even though a copy also was sent to the University’s Executive Vice President of Operations and later disclosed to the NCAA. The opinion, as well as the strong dissent, address several key aspects of the privilege that in-house counsel are well advised to keep in mind.… Keep reading

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