Articles Posted in Business Litigation

Published on:

Electric car company Tesla has filed a lawsuit against a former employee over what it claims are stolen secrets. Martin Tripp is named as the defendant.

System-Failure-51347065-001Tripp began working for Tesla in October 2017. His job was at the organization’s Nevada battery factory. As a process technician, Tripp was required to sign a non-disclosure agreement like other employees. Supervisors at Tesla began noticing problems with Tripp’s employment after a few months. They allege that Tripp was combative with colleagues and caused disruptions. In May 2018, he was reassigned to another department. The company also claims that this prevented Tripp from getting a promotion that he felt he deserved.

In the complaint, Tesla alleges that Tripp’s reassignment and the denied promotion are what sparked the employee to retaliate. Tripp admitted to internal investigators at Tesla that he wrote a software program that was capable of transferring gigabytes of data to computers outside the company. The data included photographs and videos, and Tesla claims that all of the data was privileged. Tripp is alleged to have placed the hacking software on the computer systems of three other employees so that he could continue to receive data even after he left the company. Additionally, this measure would implicate the other employees in the data theft.

According to the complaint, Tripp then leaked some of the stolen data to the media, combining it with falsehoods such as a claim that punctured battery cells were used in Tesla’s Model 3 car. The company further alleges that Tripp falsified data regarding the amount and value of scrap metal that is generated in the organization’s production processes.

Tesla CEO Elon Musk warned employees in an email about the hacking and the falsehoods that were leaked to the media. He noted that many other entities, like oil and gas companies, “want Tesla to die,” and that this is leading them to investigate whether or not Tripp acted alone.

It is not known if any criminal investigation has been launched, but this situation serves as a reminder of the importance of protecting intellectual property using all legal means available.

Published on:

Kohl’s Department Stores, Inc. is fighting lawsuits brought by disabled individuals. Initially, the individuals sought class action status against the Wisconsin-based stores, but a judge felt that separate actions would advance more efficiently through the courts. This has forced Kohl’s to defend itself on numerous fronts.

Disability-55444138-001The original lawsuit was brought by The Equal Rights Center (ERC), a non-profit civil rights activism organization out of Washington, D.C. In the complaint, Kohl’s is alleged to have operated in violation of Title III of the American’s with Disabilities Act (ADA). Specifically, the stores were accused of “denying shoppers with disabilities the ability to successfully navigate their stores … .” Upon being notified of problems in Kohl’s stores by various members, the ERC surveyed the stores, which they determined were in violation of the ADA.

The ERC sought class action status, but Kohl’s argued against it. A judge found in favor of Kohl’s in this matter, and allowed each discrimination case to proceed separately. Now, Kohl’s is seeking to have the claims of one plaintiff, Devora Fisher, dismissed. Fisher alleges that she made multiple complaints to store management about her inability to maneuver her wheelchair through the aisles. When the complaints were not addressed, Fisher went to the ERC.

Another plaintiff, Patricia Thomas, must use a walker or scooter because of her multiple sclerosis diagnosis. She similarly alleges that she was unable to navigate the Kohl’s stores in her hometown and that her complaints went unaddressed.

In the Fisher case, Kohl’s is arguing that the claims are barred by the doctrine of res judicata which means that the second lawsuit cannot proceed if it is based on three claims that were satisfied in the first lawsuit. The judge has yet to rule on this matter.

In the Thomas case, the judge did not agree with Kohl’s motion for summary judgment. Instead, the court argued that the plaintiff “has set forth a plausible proposal for barrier removal … .”

Complaints about ADA compliance should never fall on deaf ears. Take these matters seriously from the beginning, and it may be possible to avoid costly and distracting litigation.

Published on:

A battle between two titans of the lucrative corporate finance restructuring industry is brewing in New York. Jay Alix is suing McKinsey & Company on a range of alleged racketeering charges.

Lawsuit-64354059-001Jay Alix is a veteran of the post-bankruptcy landscape for big-name corporations. They helped to save General Motors and the Detroit Public School System when both were on the verge of collapse. However, Alix claims in his lawsuit that a newer competitor, McKinsey & Company, isn’t competing fairly in the industry. In fact, he accuses them of widespread criminal activity.

According to the complaint, McKinsey and company leadership, “knowingly and intentionally submitted false and materially misleading declarations under oath in … bankruptcy proceedings … in order to … avoid revealing numerous disqualifying conflicts of interest …” that should have prevented them from representing certain clients. Accordingly, Alix charges McKinsey with bankruptcy, mail and wire fraud among other crimes. Alix asserts that this activity enabled McKinsey to pocket tens of millions of dollars in fees that it was not legally entitled to.

The problem arises, as alleged by Alix, because McKinsey did not disclose its connections to certain “interested parties” in the restructurings it handled. If McKinsey had complied with the law that required them to disclose any possible conflicts of interest, they would have been prevented from representing certain clients.

Further, the complaint charges that McKinsey conducted nefarious “pay to play” relationships with bankruptcy attorneys who routinely handled cases for major corporate clients. McKinsey expected those bankruptcy attorneys to refer all of their clients to McKinsey in exchange for access to McKinsey’s impressive network of clients.

Alix additionally claims that Dominic Barton, CEO at McKinsey, essentially admitted to these crimes several months ago, saying that McKinsey was going to be backing off such activity and going into different lines of work. However, that has not been the case.

The referenced case is Jay Alix vs. McKinsey & Co., 18-04141, U.S. District Court, Southern District of New York.

It is imperative that business owners be aware of all state and federal laws that may affect the operation of their business. Not being aware of a certain law never works as a defense. Work closely with an experienced business attorney to protect your interests.

Published on:

A California law firm is being sued by three of its female associates. The plaintiffs, identified only as “Jane Does,” allege that Morrison & Foerster systematically discriminates against female employees, particularly those who are pregnant or have children.

Gender-Discrimination-105366239-001Representatives for the plaintiffs say they believe the case will become a class action lawsuit once other female associates at Morrison become aware of it. Plaintiffs are seeking approximately $100 million in damages, arguing that the firm pays them less and provides them with fewer promotions when compared with male peers.

The allegations came as a surprise to partners at Morrison & Foerster, a firm that provides several options for accommodating the needs of new parents. Some of these programs include flexible work options, reduced hours, parental transition time and 20 weeks of paid time off for primary caregivers.

However, the plaintiffs say that associates who take advantage of these programs are “set up to fail.” In January 2018, each learned that their peers who were in the same class year had been promoted ahead of them. Additionally, their salaries were no longer the same as their promoted peers. Their external billing rates had been raised, an error that management corrected when they were alerted to the issue.

One plaintiff described her performance review, which occurred during the same month. The plaintiff says that the partner conducting the review essentially informed her that she had not been promoted because she became a mother. She also revealed that her request for flexible scheduling, which would have allowed her to work full time with some of the hours being logged at home, was denied.

Another plaintiff was told that she was required to work more billable hours upon her return from maternity leave. However, when she requested additional work to meet this new standard, the partners were not forthcoming.

It’s unlikely that the management at Morrison intended to discriminate against any of their associates. However, sometimes even the appearance of gender and pregnancy bias is enough to cause legal problems. Working closely with an employment attorney is the best way to avoid these situations.

Published on:

The Ninth Circuit Court has acted to further eliminate the wage gap. In fact, it reversed a decision that the judge now views as unjust. The ruling sets precedent for female employees who allege that they are paid less than similarly qualified male counterparts for the same work.

Compensation-134182432-001The case in question is Rizo v. Yovino. Aileen Rizo is a math consultant employed with Fresno County Public Schools. When she learned that male colleagues in her department were being paid significantly more than she was, Rizo began investigating. What she learned eventually led her to sue her employer. Basically, Rizo was earning less because she had been paid less in her previous positions with other employers. Fresno County Public Schools used her wage history as justification for paying her less than male counterparts with similar experience.

The Ninth Circuit agreed with this pay history reasoning last year, aligning themselves with the defendant because the pay differential was based on “a factor other than sex.” The recent reversal of this finding means that a worker’s pay history cannot be construed as “a factor other than sex” under the auspices of the Equal Pay Act. This decision effectively wipes out 30 years of precedent, and activists say that it strikes a major blow to the wage gap situation.

In the decision, Judge Reinhardt wrote that “‘any factor other than sex’ is limited to legitimate, job-related factors such as a prospective employee’s experience, educational background, ability, or prior job performance.” The judge went on to argue that using the Equal Pay Act to perpetuate the gender wage gap runs contrary to the very purpose of the Act.

The decision is an echo of several state-level decisions that are prohibiting employers from gathering data relating to the salary history of prospective employees. Accordingly, it is critical for employers to update their hiring processes to reflect these changes. It also is sensible to review current salary data for all existing employees to ensure that any pay disparities between male and female colleagues with similar qualifications are supported by the provisions of the Equal Pay Act.

Published on:

The Walt Disney Company recently suffered a setback in a California federal court. Specifically, a judge has denied Disney’s request for a preliminary injunction against Redbox that would have forced the DVD-rental company to stop reselling the download codes for digital copies of the studio’s films.

redbox-1Redbox’s movie rental kiosks have become a familiar part of the landscape in recent years. Consumers stop by these kiosks for the latest releases. For the most part, Redbox has distribution deals with the major movie studios that allow them to profit by renting out the studios’ films. However, Redbox has no such agreement with Disney.

Accordingly, Redbox purchases Disney-distributed movies from retailers, then slips them into their kiosks for customer rental. Disney and other movie studios frequently put new films in combo packs that feature DVD and Blu-ray copies of the films along with a download code for getting a digital copy. In addition to renting DVDs and Blu-rays, Redbox has been selling the download codes on slips of paper that are obtainable at their kiosks.

When Disney found out about this practice, they immediately launched a lawsuit. Among the charges in the complaint were copyright infringement, false advertising, unfair competition, tortious interference with customer contracts and breach of contract. Redbox quickly countersued, arguing that the studio was trying to stifle possible competition for its soon-to-be launched digital streaming service.

Not only has a federal judge denied Disney’s request that Redbox be stopped from re-selling download codes, but also the judge says Disney is actually misusing copyright law. On each Disney movie combo pack, consumers will find language stating that the download code cannot be sold or transferred. The studio argued that this constitutes a legally binding contract, but the judge did not agree. In fact, the judge said that there is no law that prevents what Redbox did. After the “first sale,” which was the lawful purchase of the combo pack, the owner is then free to dispose of the copies as they wish.

Copyright law can be incredibly nuanced. Work with a skilled business attorney to protect your intellectual property rights.

Published on:

A jury verdict in Las Vegas highlights how crucial it is for homeowners associations to properly inspect and maintain common equipment. The HOA for the Lamplight Village at Centennial Springs now faces either finding a way to pay the $20 million decision or a lengthy and expensive appeal. Lawyers for the plaintiff argue that if the HOA had simply agreed to a $150 per month maintenance fee, the HOA would never have been in this situation.

DT-19867194-scale-001In 2013, Carl Thompson was playing basketball with some friends. He sat on a nearby swing set to send a text message. Unexpectedly, the metal crossbar at the top of the swing set broke and came crashing down on his head. Weighing in at 42 pounds, the cross bar effectively crushed the left side of the 15 year-old’s skull.

In the years since, Thompson has suffered from debilitating headaches. He has difficulty remember things and some of his physical movements are impaired. Doctors say that his chances of developing dementia have radically increased. As with many traumatic brain injuries, there is a likelihood that Thompson’s condition will further deteriorate. So far, he has been unable to finish high school, and his dreams of becoming a musician have fallen by the wayside.

Thomson sued the HOA. A jury recently decided the case in his favor with a $20 million verdict. The plaintiff’s attorneys say that the HOA ignored several warning signs that the swing set was failing. Inadequate repairs had been made in the past, and the HOA had refused to purchase a $150 per month maintenance plan from the swing set’s installer to cover routine upkeep and other repairs.

Thomson’s attorneys also say that the HOA took a chance by going to court with the case instead of accepting several settlement offers for far less money. Now, the lawyers believe that the HOA’s insurance company will be responsible for the damages.

Taking a case before a jury is always a risk. This is why experienced, knowledgeable legal counsel is indispensable to all litigation. With their assistance, it may be possible to avoid a trial.

Published on:

One of the questions I hear frequently is about whether we are accepting new clients.

While the short answer is “Yes”, here is some additional information which many people find interesting.

Great%20Fit%20Gears%2039896521-001.jpgOur law firm, Sylvester Oppenheim & Linde is committed to client service and quality legal representation for each and every client. That means that we only accept clients who we feel are a good match for our expertise, experience and areas of practice.

I learned a long time ago that we can’t be all things to all clients, but we can be all things to some clients: and those are the ones we welcome and serve in an exemplary manner.

The purpose of this blog is to provide helpful information to anyone who reads it. On our website, you will find another example of our “Be of Service” attitude by reading our Home Page Article “Eleven Questions to ask BEFORE Hiring a Business Attorney“. You will also find a list of our practice areas on that page.

Our clients tell us that they appreciate our honesty, accessibility and guidance. And we appreciate our clients.

Back to the question. The answer is: “Yes, we are always looking for one or two new good clients.” If you have a legal issue, I invite you to call and let’s find out whether we are a great fit for each other. I can be reached at 818-461-8500 or via the Contact form on this page.

Richard Oppenheim

Published on:

Employers don’t always have an easy time when it comes to accommodating the religious beliefs of workers. Understanding nuanced belief systems and balancing that with company objectives leads to legal friction. That’s the case in a lawsuit that the Equal Employment Opportunity Commission, or EEOC, filed against Memorial Healthcare in Michigan.

Employment-Contract-44108074-001According to the complaint, medical transcriptionist Yvonne Bair received an offer of employment from Memorial Healthcare. The prospective employer informed Bair of its requirement that all employees receive the flu vaccination. Bair refused the vaccination on religious grounds, saying that her belief in Jesus Christ led her to reject injecting or ingesting any foreign substances. The hospital suggested that Bair could take the nasal spray flu vaccine, but Bair again refused.

Memorial then rescinded its employment offer, despite the fact that Bair told them that she would wear a mask. According to the employer’s policy, it’s acceptable for employees to wear a mask when they cannot get a vaccination.

Bair took her complaint to the EEOC, which filed a lawsuit on her behalf. The EEOC charges that Memorial violated Title VII of the 1964 Civil Rights Act when it rescinded the employment offer. According to the act, employers cannot discriminate against employees based on religious beliefs. Instead, employers must strive to provide reasonable accommodations that allow workers to observe personal religious practices.

Why did Memorial rescind the offer of employment when they have a policy allowing unvaccinated employees to wear a mask as an alternative? Bair would eventually have become a work-from-home employee, so the chances of her transmitting the flu to co-workers or patients would likely have been minimal.

Perhaps Memorial had other reasons for deciding to go with another job candidate. However, unless they used proper documentation to support their decision, they may find themselves in a continuing legal battle.

It is vital for all employers to understand anti-discrimination employment laws. Additionally, it’s critical that employers proceed with extreme caution when it comes to hiring, firing and disciplinary decisions. Work with a qualified business attorney to make certain you stay on the right side of the law.

Feel free to contact attorney Rich Oppenheim by phone or message by using the “Contact” box in the right column of this blog.

Published on:

Service and support animals are becoming an increasingly common sight, especially with so many veterans suffering from PTSD. These animals are trained to meet the physical, psychological or emotional needs of disabled people. This makes them an indispensable part of everyday life for thousands.

Lawsuit-64354059-001Many public places that do not normally allow animals make exceptions for service animals. This is also true on airlines. However, American Airlines recently settled a lawsuit in connection with an incident in which a veteran says she was harassed and discriminated against when she tried to board a plane with her service dog, Jake.

Lisa McCombs served in the American military in Iraq and Afghanistan. As she suffered from PTSD, upon her return to civilian life, McCombs was partnered with Jake, a support dog that was trained to move closer to McCombs when she experienced trauma or stress. These behaviors are intended to provide reassurance and to help ward off panic attacks.

McCombs and Jake are constant companions, but when she tried to board a flight in Kansas in 2015, American Airlines employees blocked her from boarding with her dog. Apparently, employees did not believe the dog was a service animal despite McCombs having appropriate paperwork and the presence of an identifying vest on the dog. Moreover, McCombs had called in advance to inform the airline that she would be flying with a service animal.

McCombs and Jake were denied boarding two days in a row in Kansas. More alleged harassment followed at a Texas airport. She filed a lawsuit under the Air Carrier Access Act. This law essentially states that airlines cannot discriminate against air travelers based on disabilities. In an answer, American Airlines argued that the law does not provide individuals with the right to privately sue.

Nonetheless, the case has now settled with undisclosed terms. A spokesperson for the airline says that the settlement was to the parties’ mutual satisfaction, and he also thanked McCombs for her service.

Understanding the rights of Americans with disabilities is crucial to avoiding discrimination lawsuits. Contact attorney Rich Oppenheim to learn more.