Articles Posted in Contract Litigation

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A heated lawsuit between 21st Century Fox and Netflix reveals a great deal about the inner workings of Hollywood while also providing useful insights for employers in California and across the country. This high-profile case is a helpful reminder about the necessity of consulting with employment attorneys to cement formal contractual agreements with workers.

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The lawsuit was filed by Fox in September 2016. In their complaint, they cite a “brazen campaign” by Netflix “to unlawfully target, recruit, and poach valuable Fox executives.” Mainly at issue are two former Fox employees who now work for Netflix. One of these employees is Marcos Waltenberg, a 10-year veteran at Fox who was a vice president of promotions. The other was Tara Flynn, a vice president of creative affairs who was hired by Fox in 2012.

Waltenberg is a legal alien who needed employer sponsorship to maintain his green card status. In 2012, he asked his supervisor at Fox for a raise. The human resources department responded by saying that they were not required to sponsor Waltenberg’s green card renewal. When Waltenberg dropped his request for a raise, Fox helped him get his green card.

Flynn says she was pressured to take a three-year contract at $75,000 per year even though the compensation was well below the $250,000 annual salary that was typical for her position. She knew that her salary was well below that of two male executives who formerly held the job. When Netflix approached her with a better offer, she let her supervisors know that she was leaving, and that’s when things got ugly.

Waltenberg and Flynn were under contract with Fox when they gave notice. In a response to the complaint, defendants argue that the contracts that are forced on rank-and-file employees at Fox are too reminiscent of the studio era when the lives of actors were micromanaged by executives. The response further contends that these contracts unlawfully constrain employee mobility.

This lawsuit serves as a reminder to all California employers. Companies and HR departments need to regularly review their employment contract practices to ensure that they are keeping up with changing laws.

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With the passage of Proposition 64 in November, California became one of a handful of states to legalize the use of recreational marijuana. Many residents are thrilled with the outcome, but the new law is leaving employers wondering what their rights are.

Marijuana-legalization-94540729-001The good news is that the authors of Proposition 64 foresaw that marijuana legalization might pose a problem to numerous industries. That’s why there is a provision in the law that explicitly maintains the employer’s right to prohibit the use and possession of marijuana, particularly on any work sites. Accordingly, any company is perfectly within its rights to keep their drug-free workplace policies on track, though it does make sense to ensure that everything is in order.

Now is the perfect time to meet with an employment attorney to make certain that an existing company drug policy is sufficiently broad. If a drug policy is not already in place, then it is definitely time to craft one, a project that takes time and considerable legal expertise. Under the new law, employers are still permitted to require pre-employment drug tests, and they maintain the right to not hire candidates who test positive for marijuana. Even if the drug was obtained and used legally, the employer does not have to accept such use among their prospective employees. However, it is critical that any pre-employment drug screenings are conducted fairly and impartially, without any discriminatory element.

Under California’s new law, employers are also permitted to conduct drug tests among existing employees. Once again, it is crucial that this be done in a non-discriminatory manner. Moreover, companies may want to review their written drug policies with all employees to make it clear that marijuana use is not appropriate or acceptable. Management may also need to sit down with human resources staff to ensure that they are ready to field questions from employees.

California’s revolutionary Proposition 64 may have made recreational marijuana use legal, but it still allows employers to make important safety decisions. If you have any questions about how California’s new recreational marijuana law will affect you and/or your employees, feel free to contact me, attorney Rich Oppenheim at 818-461-8500. You may also use the form on the right side of this page.

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We regularly receive requests to explain the process of litigation, which we always communicate (using dialog NOT monologue) to prospective clients during our initial consultation. We hope you will find our lawsuit synopsis helpful. Feel free to forward it to others and remember to contact us with any questions about any business or employment lawsuit.

If your lawsuit or legal problem involves business issues, you may find it helpful to visit our website.  Once there you will find the following information: “Eleven Questions to Ask BEFORE Hiring a Business Attorney”.  It has always been one of our most visited web pages.

The litigation process generally involves four (4) phases. The length of each phase varies with the legal and factual complexities of each case.

DT%2019867194%20scale-001.jpgThe initial phase takes place before anything is filed in court. The attorney meets with the client to determine the facts of the claim being advanced by the client or the client’s defense to a claim brought by another. In either case, it is essential that the client meet with the attorney at the earliest opportunity as valuable rights may be lost by delay. Once the attorney meets with the client, the attorney will review any documents relevant to the matter, research the applicable law and possibly speak to witnesses in order to chart a course which is in the best interest of the client.

The next phase involves the filing of an initial pleading in court. Typically, this is the filing of a Complaint or an Answer to a Complaint. The discovery process begins, which may include serving the other side with written questions, called Interrogatories, obtaining evidence which may be in the possession of the adversary or some other party and taking depositions, the oral questioning of parties and witnesses.

Once this phase has been completed, the case is ready to be tried. A trial may be in front of a Jury or a Judge and can vary in length depending upon the number of witnesses and quantity of exhibits offered. Under our system of jurisprudence, the plaintiff has the burden of proof. The plaintiff’s case goes first. The defendant then has an opportunity to respond to the plaintiff’s case with witnesses and evidence to support the defense. If the defendant has brought a Cross-Complaint, it is tried in the same manner. Otherwise, the plaintiff has an opportunity to put on a rebuttal case to counter the evidence offered by the defendant and, on occasion, a defendant may offer a sur-rebuttal to reply to the evidence offered by plaintiff in the rebuttal case.

The final phase of litigation involves the post-trial matters including motions to vacate or correct the judgment, appeals and efforts to collect on the judgment.
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A U.S. magistrate judge has made an important ruling that will allow plaintiff’s counsel to serve notice of a lawsuit on the defendant via Twitter. The ruling may help to set precedent in similar cases where a party in the U.S. wants to sue a foreign defendant.

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The case at hand was brought by St. Francis of Assisi. A non-profit that provides help to refugees, the organization wanted to sue the Kuwait Finance House, Kuveyt-Turk Participation Bank and an individual named Hajjaj al-Ajmi. Service on the first two defendants was relatively straightforward, but the plaintiff was having difficulty locating al-Ajmi.

St. Francis of Assisi was alleging that the three defendants had funded a Christian genocide in countries like Syria and Iraq. However, service of the complaint had to be completed before the case could proceed. Al-Ajmi had already been identified by the United Nations and the U.S. government as a financier of terror group ISIS. He is known to have organized numerous Twitter campaigns to raise funds for the organization under several different Twitter handles.

That’s why counsel for plaintiffs petitioned the judge for the opportunity to serve the complaint on al-Ajmi via Twitter. Traditional methods had already failed. Plus, because Kuwait is not a signor of the Hague Convention, it wasn’t possible for service to be completed through some sort of centralized or government authority.

Ultimately, U.S. Magistrate Judge Laurel Beeler granted the plaintiff’s request to serve notice via Twitter. Writing that Twitter was “reasonably calculated to give notice” and that the effort “is not prohibited by international agreement,” Beeler opened the door not only for St. Francis of Assisi, but also for other plaintiffs who want to serve a lawsuit on a foreign national that seems to be able to avoid service by regular means.

The ability to serve a lawsuit via Twitter doesn’t guarantee that al-Ajmi will respond or that he will ever pay any money that the court may decide is owed to the plaintiffs. Nonetheless, the fact that such unconventional service is being allowed may prove to be beneficial for other plaintiffs in similar situations.

 

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Longtime educator Alan Cohen has sued his former employer after being fired. Cohen was employed for 13 months by Speyer Legacy School, which advertises itself as an institution for intellectually gifted children in grades kindergarten through eighth grade. The exclusive private school charges students approximately $40,000 per year to attend.

you are fired 2Cohen spent 20 years working for New York City’s Department of Education before becoming the head of the lower school at the prestigious Portledge School. He made the move to Speyer where he was named the Assistant Head of the school as well as the Head of the lower school. Things appeared to go well. Teachers, administrators, parents and students all took to Cohen. Then, the school’s newly appointed Head Dr. Barbara Tischler told Cohen about another faculty member who was asking questions about Cohen’s sexuality.

Cohen, who happens to be gay, quickly discovered that his sexual orientation was a hot topic of conversation among faculty, administrators and board members. One board member even tried to set up Cohen on a blind date with one of her male friends. Additionally, Dr. Tischler asked Cohen if he could give advice to another administrator at the school. The other administrator was a lesbian, and there was widespread feeling among members of the board that her masculine dress and appearance would render her unsuitable for the Dean of Admissions position.

Cohen brought his concerns over the focus on his sexual orientation to Tischler, but to no avail. In April 2016, Cohen was informed that his contract was not going to be renewed.

Cohen has gone on to find employment at the Harvard Graduate School of Education. A married, heterosexual woman now holds his old job at Speyer. Nonetheless, Cohen’s experiences at the exclusive school suggest an atmosphere of discrimination that violates both state and federal law. Situations like this remind employers how important it is to work with an employment law attorney to avoid  discriminatory actions.

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With approximately 60,000 employees participating in its 401(k) program, Morgan Stanley should be positioned to offer an outstanding retirement investment package. However, a group of employees is now seeking class action status as they sue the investment firm for mismanagement of the company’s 401(k) plan.

Balance in digital background / A concept of technology law or tIn the complaint, plaintiff Robert Patterson alleges that Morgan Stanley only made poorly performing investments available in its 401(k) program. The suit argues that instead of abiding by the Employee Retirement Income Security Act, which states that employers have a fiduciary responsibility to act in the best interests of plan members, Morgan Stanley routinely chose to include some of its least successful funds in the company 401(k).For instance, the available mid-cap fund was Morgan Stanley’s own Institutional Mid-Cap Growth Fund. Investment advisory firm Morningstar, Inc., gave this fund the worst rating for investors who held an interest in the fund over a period of several years. The small-cap fund that Morgan Stanley offered to its employees fared even worse. It underperformed 99 percent of all similar funds in 2014, and its performance didn’t improve much in the subsequent year.

Moreover, the lawsuit claims that Morgan Stanley was charging outrageous fees. Patterson and his co-plaintiffs allege that Morgan Stanley was charging their employees considerably more than outside clients were being charged. In some cases, employees were charged twice the going rate for outside clients.

In the complaint, lawyers for the plaintiffs argue that the company “selected their proprietary funds not based on their merits as investments, or because doing so was in the interest of plan participants, but because these products provided significant revenues and profits to Morgan Stanley.”

Other financial management firms like Edward Jones and Franklin Templeton have been hit with similar lawsuits in recent months. Several high-profile educational institutions like Yale University, the Massachusetts Institute of Technology and Johns Hopkins University have also been accused of similar mismanagement. With lawsuits like these on the rise, it is more important than ever before for employers to ensure that their 401(k) plans comply with ERISA and other applicable legislation.

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Judge R. Gary Klausner has ruled that Led Zeppelin may not collect almost $800,000 in defense fees from the plaintiffs in a recent copyright lawsuit. Earlier, the copyright infringement case was settled in the band’s favor.

monumentThe lawsuit centered around the band’s most successful song, “Stairway to Heaven.” Songwriter and guitarist Randy Wolfe had long harbored suspicions that the better-known rockers had lifted the introduction of his 1968 instrumental composition “Taurus,” to be used in their hit. Wolfe passed away in 1997, but his trust filed the lawsuit in 2014. If the suit had been decided in the plaintiff’s favor, the trust might have received several million dollars. Estimates suggested that the song has generated more than $500 million thanks to its popularity.

The jury decided in Led Zeppelin’s favor. However, Jimmy Page and Robert Plant along with Warner/Chappell Music, the song’s publishing company, had expended considerable money in fighting the lawsuit. Once they prevailed, they decided that they were entitled to recoup those expenses from the unsuccessful plaintiff.

Ultimately, Judge Klausner found that the songwriters and publishing company were not entitled to legal fees and miscellaneous costs related to their defense because the initial lawsuit was not frivolous. The defendants contended that the lawsuit was merely an attempt to obtain easy money from famous musicians and that an award of legal fees to the defendants would discourage other potential plaintiffs from embarking on similar efforts.

The judge was not swayed by these arguments, stating that he had found sufficient validity in the lawsuit to allow it to go to trial. By definition, this meant that the suit could not be categorized as frivolous. Moreover, the judge asserted that there was no evidence suggesting that the Wolfe trustee had acted with “nefarious motives.”

The Led Zeppelin copyright infringement lawsuit contains many fascinating and instructive components. The most important of these may be how crucial it is to preserve and defend intellectual property rights. Whether you are an inventor or are being accused of profiting from someone’s else’s innovation, you need competent legal counsel to protect yourself.

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Most people think Snapchat is just a fun messaging app. They use it to send photos and videos that self-destruct seconds after being viewed. Snapchat also features an app that makes it possible to creatively alter photographs. Known as “Lenses,” this app is what makes it possible for the photo’s subject to sport floppy dog ears, hearts instead of eyes or a floral headband. Now, this capability is at the center of a potential class action lawsuit.

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Illinois residents Jose Martinez and Malcolm Neal filed a complaint in Los Angeles in May of 2016, arguing that Snapchat violated their state’s Biometric Information Privacy Act. The law is aimed at preventing biometric identifiers from falling into questionable hands and sprang from concerns about how the necessary technology used to collect biometric identifiers might be used without the user’s knowledge or permission.

The lawsuit contends that Snapchat is collecting and maintaining detailed biometric information on their customers. This is being done without the knowledge and consent of the users, which is contrary to Illinois’ law.

Snapchat categorically denies the allegations, arguing that their service is not capable of collecting complex biometric information that would allow them to identify the face of one user as opposed to another. Instead, they say that the technology involved is merely for object recognition, which makes it possible for the program to determine which objects in a photo are faces and where the eyes, nose and mouth are located. Moreover, Snapchat denies that they are in any way storing the data that is used in the Lenses app.

Snapchat is not the first social media platform to be sued over similar technology. Both Facebook and Google are facing legal battles relating to face-recognition software that automatically identifies particular people in photographs.

This lawsuit is only in its beginning stages. It was moved to the federal courts in July 2016, and Snapchat may be facing stiff fines if their software is determined to be guilty of violating Illinois’ law. This incident demonstrates the powerful need for businesses to understand the laws of states where they will be operating.

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An online charter school in Ohio filed a lawsuit against the state’s Department of Education in an effort to block an attendance audit.

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The Electronic Classroom of Tomorrow, known as ECOT, advertises that it enrolls more than 15,000 students. This means that the facility is larger than most of the traditional public school districts. The tremendous number of students entitles ECOT to approximately $107 million in annual funding from the state.

ECOT is unlike traditional schools in that students log on via the Internet. Officials from the Department of Education want to audit ECOT’s attendance records to determine whether or not they genuinely have 15,000 students and whether or not those learners are meeting the 920 hours threshold that is mandated by state law. This means that students would have to log in for approximately five hours each day.

ECOT consultant Neil Clark argues that students are not required to complete 920 hours of classroom time. He asserts instead that 920 hours of learning opportunities are required to be presented. Moreover, Clark says that the government never asked for “documentation of log-in durations” in prior audits to determine how much funding ECOT would receive. Clark also suggests that the government is trying to retroactively apply new standards that do not apply because of the contract between ECOT and the government.

ECOT is not the first charter school to experience political turmoil recently in Ohio. In 2015, a smaller online school was found to have misrepresented its attendance numbers, with the result being that they had to return 80 percent of the money they had received from the state.

Officials at ECOT may be trying to avoid a similar fate. However, they are wise to ask that the Department of Education live up to an existing contract. Neil Clark declares that the school “successfully passed audits in 2003, 2006, 2011 and ten other audits” that were conducted by a different accrediting body. According to his statements, ECOT is not against being audited, they simply want the government to do so within the terms of their contract.

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Megan Messina, a 42 year-old executive at Bank of America, is suing her employer for gender discrimination and whistleblower retaliation. The complaint was filed in a Manhattan federal court in May of 2016.

Gender%20Discrimination%20105366239-001.jpgMessina began working at Bank of America in 2007. Before that, she spent a decade at Salomon Smith Barney. Her education and experience enabled her to attain a position as the co-head of the structured credit products division. The complaint alleges that Messina was treated unfairly by Bank of America from the beginning of her employment. In particular, her complaint outlines the interview she had with her supervisor when she was promoted to her current position.

She alleges that the supervisor asked her questions about the color of her eyes and whether or not she dyed her hair during the meeting. Moreover, Messina points out that while her male co-head met with the supervisor up to three times a day, she met with him exactly twice in her entire tenure. The complaint also argues that Messina was not included in important department emails and meetings, despite the fact that surveys showed she was outperforming many of her male co-workers.

Messina compares her own pay to that of her departmental co-workers, all of whom are male. In particular, she notes her $1.5 million 2015 bonus, comparing it to the $5.5 million received by the male co-head of her department. The complaint also details several department business deals that may have run afoul of the law. When Messina brought these matters to the attention of supervisors, she was essentially told not to rock the boat. Ultimately, she was forced by the bank to take a leave of absence.

Messina’s case illustrates important points that employers must be aware of. It’s sensible to treat all allegations of wrongdoing seriously. Moreover, it’s important to be proactive when it comes to matters of equal treatment and compensation. Doing so can prevent an employer from occupying a similar position to the one in which Bank of America now finds itself.
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