Articles Posted in Contract Litigation

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A former employee of a Chicago-area Target store is suing the retail chain based on numerous claims. Perhaps most explosive among them is the accusation that Target systematically accuses Hispanic employees of using fake Social Security numbers.

Wrongful-TerminationEsmeralda Radek began working at Target in 2012. In 2014, the manager of the store where Radek worked received a letter that claimed that Radek was stealing from the store and selling the items on eBay. Moreover, the letter asserted that Radek had used a fake Social Security number during the hiring process.

Approximately one week after receiving the letter, human resources personnel at the store confronted Radek over the claim that she used a false Social Security number. Radek was requested to verify her Social Security information by providing the state in which the credential was issued. In response, Radek informed supervisors that she had been born in Texas, and that her mother had likely obtained the Social Security card for her.

Within a few days, Target terminated Radek’s employment on the grounds that she had used a fake Social Security number. However, Radek claims that she is not the only Hispanic employee at Target who has been accused of similar crimes. If these employees could later verify the authenticity of their credentials, they could be re-hired.

In April of 2014, Radek filed a complaint alleging that she had been fired based on her national origin. Additionally, the complaint alleged a negligence claim under Illinois state law, hostile work environment claims and asserted that Target had demonstrated a pattern of practice that discriminated against Hispanic employees.

Target filed a request to dismiss the case, and a U.S. District judge partially granted this request. Judge Lee dismissed the claims regarding the hostile work environment and pattern of practice, but said that Radek’s case regarding national origin discrimination may proceed.

When questions arise regarding an employee’s identification and other credentials, it is always advisable to proceed with caution. Consult with a qualified business and employment attorney before this type of situation arises so that your organization is prepared to respond in line with the law.

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It is vital for employers to understand any physical limitations that their employees have. Not responding appropriately can lead to serious legal trouble.

ADA-138029727-001It’s a situation that happened recently in Union City, Georgia where a police detective sued her former employer. Jacqueline Lewis is an African-American woman who had been employed by the department for 10 years when her career stumbled. Lewis suffered a heart attack in 2009 and was diagnosed with a chronic heart condition.

This condition didn’t render her unfit, so Lewis continued in her role until the department decided to require all employees to carry a Taser. As a part of the training, each employee was expected to submit to a five-second shock. Participants had to seek the consent of their physician prior to the training, but Lewis’ doctor refused permission because of her heart condition.

Lewis’ superiors placed her on administrative leave, and a series of mishaps appears to have worsened relations between Lewis’ doctor and the police department. By day 21 of her leave, Lewis had been terminated, with her employer arguing that she had exhausted her leave time.

Lewis promptly filed a discrimination lawsuit, citing disability, race and gender as the grounds. The complaint detailed the stories of two white, male officers who had been given considerably more time before they were terminated for not meeting the physical ability requirements.

A district court didn’t agree that Lewis had demonstrated her status as a qualified individual under ADA. Additionally, they said that the male employees she compared herself to were not “similarly situated.” Lewis appealed this decision, and the Eleventh Circuit found that Lewis’ heart problems did not make her disabled. However, the department’s decision to treat her as if she was gave her protection under ADA. The circuit court also argued that there may be evidence of gender and race discrimination. They ruled that the case should be decided by a jury.

This case illustrates how crucial it is for employers to treat their employees with care. That treatment may grant them some protection under the law to which they wouldn’t otherwise be entitled.

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Where is the dividing line between an efficient money-making model and a pyramid scheme? That’s the question that may be answered in a new lawsuit filed against clothing company LuLaRoe.

Pyramid-Scheme-122597965-300x225LuLaRoe began operations in 2012. They have 80,000 “distributors,” most of whom are millennial moms. With more than $1 billion in sales in 2016, the company is on track to double that number in 2017. Their product consists of brightly colored leggings, shirts and dresses.

Unlike traditional retailers, LuLaRoe does not sell its products in brick-and-mortar stores. Instead, they rely upon distributors or consultants who buy the products and then hope to turn a profit when those products are sold to consumers.

Getting started as a consultant isn’t cheap. A basic package of approximately 70 leggings in adult sizes, 10 leggings in “tween” sizes and 25 dresses costs $2,074. Budding entrepreneurs could opt for a larger package containing more than 500 pieces for $9,058.25.

Three consultants from Sacramento County say they were “doomed from the start.” In their lawsuit, they claim that LuLaRoe bombarded them with demands to “buy more/sell more.” Using aggressive pressure tactics, consultants were encouraged to have at least $20,000 worth of merchandise on hand. Even if existing inventory wasn’t moving, the distributors were continually exhorted to purchase more.

The consultants say in their complaint that the company used unfair and sometimes outrageous ploys to get them to buy more inventory. LuLaRoe representatives allegedly counseled distributors to take out loans and use credit cards to purchase more product. One consultant said that she was told to sell her breast milk to raise money for buying more LuLaRoe product to sell.

In addition to accusing LuLaRoe’s principals of running a pyramid scheme, the lawsuit argues that the company violates the federal RICO act. The consultants also say that bonuses promised by the company for recruiting new distributors and buying more merchandise never materialized.

Working with a qualified business attorney helps entrepreneurs to avoid costly and time-consuming litigation. With legal advice, LuLaRoe may have been able to focus on profits without allegedly running afoul of the law.

Feel free to contact me, Richard Oppenheim with your related legal questions. I may be reached at 818-461-8500 or by using the “Contact Us” box in the right column.

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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

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Recently, California’s Department of Fair Employment and Housing, or DFEH, issued a revised “Workplace Harassment Guide for California Employers.” This essential publication should form the basis of every organization’s anti-harassment and retaliation policies. With the guidance of a qualified California employment attorney, most companies will be able to protect themselves from violating the guidelines described in the publication.

https://www.californiabusinesslitigation.com/wp-content/uploads/sites/283/2016/05/boy.girl_.-equality.jpgThe Guide is particularly useful to employers because it clearly describes the necessary elements of any anti-harassment program in California. Employers are recommended to develop a written policy that is given to all employees and is discussed at least once a year if not more often at company meetings. The Guide also offers counsel on how crucial it is for members of management to model appropriate behavior and responses to harassment complaints. Training for managers and supervisors similarly is recommended, as well as education for personnel who will be charged with handling complaints.

One of the most important tenets espoused by the publication is the need for a proper reporting system, and a means of ensuring that every report is treated as a high-priority item. This makes it possible for the employer to determine whether or not a full, formal investigation is required. One of the new Guide’s more useful sections educates managers and supervisors about how to investigate a claim. A prompt, thorough and impartial investigation is frequently able to head off more serious problems like harassment and retaliation lawsuits.

DFEH’s revised Guide is essential reading for every employer in California. Its plain language and good coverage of relevant points make it the perfect resource for an anti-harassment and retaliation policy. A skilled California employment lawyer can help any company owner or executive put the finishing polish on the organization’s program. Too many companies make the mistake of not creating a written policy until it is too late.

Executives who want to improve the chances that their company will not become embroiled in costly, time-consuming litigation will want to discuss the Guide and how it can be used to craft an anti-harassment program specifically for their company with a qualified attorney.

The guide is only 9 pages long. If after reading it you have any employment law questions, feel free to contact me, Richard Oppenheim. I may be reached at 818-461-8500 or by using the “Contact Us” box in the right column.

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A robust network can help to open the door to new professional opportunities. Increasingly, professional networks are being created and maintained in a virtual environment. While it is becoming more common for colleagues and former co-workers to connect to each other via social media, it is vital for employers and employees to understand how various employment agreements that they are a party to may affect their interactions.

Scales-of-Justice-Digital-94824052-001This concept is at the heart of a recent case in Illinois. A branch manager for Bankers Life & Casualty Co. named Gelineau left his employment to accept a position with a competitor called American Senior Benefits, LLC. After Gelineau began working with his new employer, he sent LinkedIn invitations to three of his former co-workers at the Warwick, Rhode Island office of Bankers Life. The trouble is that Gelineau had signed a non-solicitation agreement with his former employer. As is common with these agreements, Gelineau had promised not to solicit other Bankers Life employees to seek employment with other companies.

Bankers Life sued American Senior because they believed that Gelineau had violated his non-solicitation agreement. However, the court did not agree. The judge ruled that the LinkedIn emails were “generic” and “did not contain any discussion of Bankers Life.” Moreover, the email did not contain a “solicitation to leave their place of employment.” Instead, the email was merely intended to provide an opportunity for the former co-workers to keep their professional network as robust as possible.

According to the court, if Gelineau had included some kind of hint or suggestion that the Bankers Life employees should leave their current place of employment in favor of American Senior, then the outcome may have been different. Bankers Life was concerned that a listing of open positions at American Senior was included in Gelineau’s LinkedIn home page. Nonetheless, the court did not feel that Gelineau could be held responsible for what visitors to his LinkedIn page did once they were there.

Non-solicitation agreements are standard in many industries. With the changing communication landscape, it’s important to recognize what these agreements do and do not cover.

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The embattled Fox News network now has another lawsuit to add to its list of legal woes. Employee Diana Falzone has filed a lawsuit in the New York State Supreme Court. In her complaint, she charges her employer with discrimination on the basis of gender and disability.

Gender-Discrimination-105366239-001Falzone was employed as a host of programming on FoxNews.com. In January 2017, she published an article that chronicled her battle with endometriosis. This difficult condition affects millions of women across the U.S. Falzone wrote and published the article at the encouragement of the medical team that treats her, feeling that sharing the story of her struggle might provide support to other women with the condition.

Falzone alleges in her complaint that her employer knew about and approved the article prior to its publication. However, three days after publishing her article, Falzone was called in to talk to her supervisor. He told her that senior Fox executives had ordered him to tell her that she would never again host her own shows and that she was no longer permitted to appear on FoxNews.com. Additionally, senior executives forbade her from conducting interviews, appearing on the Fox television network and doing voiceover work for the station.

Falzone alleges that she demanded to know several times why her activities were being restricted, but never received a cogent answer. A formal discrimination complaint filed through the 21st Century Fox hotline did not yield results. That was when Falzone hired a lawyer and filed a lawsuit.

Falzone contends that Fox executives believed that the public disclosure of her illness “detracted from her sex appeal and made her less desirable,” thus leading them to ban her from maintaining her public role with the network.

Fox News has made headlines several times over the last year, mostly with regard to various discrimination and harassment lawsuits as well as the ouster of network chief Roger Ailes. Though their example may seem a bit extreme, it still serves as a crucial reminder to organizations in all industries to ensure that they are complying with all laws related to workplace discrimination and harassment.

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Technology giant IBM is on the receiving end of a lawsuit by the State of Pennsylvania. The lawsuit, which was filed on behalf of the Department of Labor and Industry, is in response to what the government says is a failed update to its outmoded unemployment compensation system.

Computer-bug-63136248-001The story began in 2006 when the State of Pennsylvania and IBM signed a $109.9 million contract. According to the agreement, IBM was going to overhaul the state’s system for distributing unemployment compensation and collecting unemployment insurance taxes. The Department of Labor was using systems that were outdated and consisted of several programs that were not compatible. IBM was supposed to replace this with a streamlined substitute that would be more efficient and cost-effective in the long run.

A completion date of February 2010 was established by the contract. However, that deadline came and went without a working system being installed at the Department of Labor. Various delays stretched the deadline out to September of 2013, by which time the state had paid $60 million in excess of the agreed-upon sum. The government alleges that even after numerous delays and the extra payments, the computer system at the Department of Labor had still not been updated.

Both sides assert numerous reasons why the project was not completed as agreed upon. Turnover at IBM, and the re-assignment of various employees, caused delays, miscommunication and complications. IBM argues that at least some of the fault lies with the government, citing their failure to appoint personnel to manage the project.

It is safe to say that this case will not be resolved quickly or easily, considering the amount of money and the reputations that are at stake. However, this situation provides a useful reminder of how imperative it is for governments, companies and individuals to be exceptionally cautious when it comes to signing contracts. A well-drafted agreement is the key to a successful project, while one that is poorly written merely opens the door to numerous costly legal battles. Accordingly, it is wise to have all contracts reviewed by a business attorney before signing on the dotted line.

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U.S. District Judge Susan Illston has ruled that Walmart truck drivers are not entitled to an additional $80 million in a class action lawsuit settlement. The complaint was filed in 2008 with hundreds of California truck drivers claiming that they did not receive at least minimum wage for performing certain tasks. Although the judge denied the plaintiffs’ claim to the $80 million, Walmart will still have to abide by the initial $54 million settlement that was awarded in an earlier jury decision.

walmart-truckclose-up-side-view_129821854433586541-001Walmart asserts that its truck drivers are among the best paid in the industry, with many of them earning between $80,000 and $100,000 per year. Moreover, their attrition rate is low, and the judge commended them for taking rapid action to comply with evolving compensation laws. The drivers argued in their lawsuit that their employer compensated them only based upon miles driven and specific activities rather than hours worked, which constituted a violation of state law. Accordingly, the drivers claimed that they did not receive adequate compensation for tasks like washing and inspecting trucks. They further argued that they were not appropriately paid for mandatory 10-minute breaks and 10-hour layovers.

In November 2016, a jury of seven agreed with the drivers, awarding them approximately $54 million in back pay. This latest decision came in response to the plaintiffs’ request for an additional $5.8 million for restitution, $54.6 million in liquidated damages and $25.6 million in penalties. The judge went along with the request for $5.8 million in restitution, but denied the other claims, saying that there is not sufficient evidence that Walmart acted in bad faith or with “dishonest and wrongful motive.”

It’s possible that Walmart may still appeal the decisions by the judge and the jury. However, they scrapped their former driver-compensation package in 2015 in favor of a new one that is in compliance with California law. Because compensation laws change periodically, it is only sensible for all business owners to have their compensation practices reviewed by an employment attorney on a regular basis. This may prevent a company from finding itself involved in a similar class action lawsuit.

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Ownership of some of the most well-known Beatles songs has been on a tortuous path for decades. Sir Paul McCartney, a former Beatle and writer or co-writer of many of the group’s biggest hits, is taking legal action to reclaim the rights to his creations. It’s an ongoing odyssey with no end in sight.

Beatles-Imagine-2902823-001McCartney is the author of many famous Beatles songs. Sometimes collaborating with John Lennon, he wrote tunes like “Love Me Do” and “Yesterday.” However, the rights to those songs were often immediately signed away. Most of the rights were lost between 1962 and 1971. Various publishers snapped up the rights, but by the 1980s, publisher ATV owned most of them. When an Australian businessman who owned a controlling share in the songs put them up for sale in 1984, Michael Jackson notoriously outbid Paul McCartney to become the owner of the Beatles’ catalog.

In fact, Jackson and Sony formed Sony/ATV, with the Beatles’ works being among the company’s major assets. The Jackson family sold their share of the company to Sony after Michael Jackson’s 2009 death. Now that Sony/ATV can claim sole ownership, McCartney is suing them to regain ownership of his work.

The lawsuit, which was filed in New York, is based on a facet of the 1976 Copyright Act, which stipulates that any creative works made prior to 1978 be returned after 56 years to their originators. McCartney’s filing is timely considering that he and Lennon first began writing together in 1962, precisely 56 years before 2018. Accordingly, a court could decide that McCartney may reclaim the lucrative rights to his songs as early as next year.

McCartney has been trying to reclaim those rights for many years. Thus far, Sony/ATV is unwilling to accommodate his request. They cite a long-term relationship with McCartney, and express disappointment that the musician filed the lawsuit, which they call unnecessary and premature.

The battle over the rights to the Beatles’ catalog is likely to continue for many years, which only highlights the need for individuals and companies to protect their intellectual property rights.