The Employment Law Group® Law Firm Publishes Article on Non-Compete Litigation

Wednesday, June 17th, 2009 | Noncompete Litigation | No Comments

Litigation News has published an article by Scott Oswald and Jason Zuckerman of The Employment Law Group® law firm on non-compete litigation.  The article discusses strategies for defending non-compete claims, including filing a declaratory judgment against the employer; asserting the “unclean hands” defense; seeking sanctions against an employer attempting to enforce an invalid non-compete; and potential claims available where an employer tries to enforce an invalid non-compete.  To read the article, click here.  Additional information on The Employment Law Group® law firm’s Non-Compete Litigation Practice is available at http://www.employmentlawgroup.net/PracticeAreas/NonCompeteLitigation.asp.

White House to Announce New Rules on Executive Pay

Wednesday, June 10th, 2009 | Executive Compensation, Federal Legislation | No Comments

Today, the Obama administration is scheduled to announce proposals that would give shareholders more input on executive compensation and ensure that corporate compensation committees have more independence when determining executive pay.  The first proposal, known as the “Say on Pay” proxy resolution would require all publicly traded companies to allow an annual, nonbinding vote for shareholders to decide on proposed executive compensation measures.  Additionally, the “Say on Pay” program provides that shareholders maintain the right to vote on the compensation for the top five company executives.  The second proposal which seeks legislation similar to the Sarbanes-Oxley Act, would give more authority and more exacting standards to corporate compensation committees, including the ability to hire independent compensation consultants and outside counsel. 

For more information on executive compensation, visit The Employment Law Group® law firm’s Executive Counsel Practice at http://www.employmentlawgroup.net/PracticeAreas/Executive-Compensation.asp.

Former Executive Wins $4.1 Billion in Employment Contract Dispute

Tuesday, June 9th, 2009 | Breach of Contract, Breach of the Implied Covenant of Good Faith, Executive Compensation | No Comments

A California Court has recently confirmed an arbitration award of $4.1 Billion for a former executive in a suit against his former employer, iFreedom Communications, Inc. (iFreedom).  The award, which is being touted as the largest damages award issued in an employment arbitration, stems from a dispute over a compensation agreement where iFreedom agreed to pay its former chief marketing officer a commission structure of five percent of gross sales, company stock, and other benefits in exchange for his experience in building marketing organizations.  According to the former executive, the company failed to pay him according to the compensation agreement and terminated him without cause when he confronted the company about the unpaid wages.  The arbitrator found in Chester’s favor, concluding that iFreedom and its founder were liable, among other things, for breach of contract, breach of the implied covenant of good faith and fair dealing, and failure to pay wages.  The arbitrator also determined that Chester demonstrated by clear and convincing evidence that the defendants engaged in “a pattern of despicable conduct,” and thus, an award of punitive damages was appropriate.

The massive award of $4.1 billion in this case is significant because it highlights the fact that employers can face severe penalties for failing to satisfy contractual obligations owed to employees.  The Employment Law Group® law firm has successfully represented and advised senior executives in employment-related contract disputes including breach of stock option agreements and compensation agreements.  For more information about the firm’s Executive Counsel Practice, click here.

Jury Awards $130 Million to Minnesota Dentists

Thursday, June 4th, 2009 | Breach of Contract, Tortious Interference | No Comments

A Hennepin County jury has awarded PDG P.A. (“PDG”), a Twin Cities dental group, more than $130 million in damages for multiple claims, including breach of contract and tortious interference.  The verdict stems from a dispute over a 1996 service agreement where PDG agreed to pay PDHC Ltd. (“PDHC”) certain fees in exchange for non-dental administrative services.  In 2006, PDG filed a complaint against PDHC, alleging that the company wrongfully engaged in conduct constituting the practice of dentistry in violation of Minnesota law and the parties’ service agreement.  PDG also alleged that after it terminated its contract with PDHC, the company tortiously interfered with its ability to transition patients to new clinics by refusing to provide copies of patient records and recruiting PDG dentists for a new venture in direct competition with PDG.  PDHC denied all allegations. After a month-long trial, the jury found for the plaintiffs and concluded that PDHC was liable among other things, for breach of contract, breach of fiduciary duty, and tortious interference.  Finding that PDHC acted with deliberate disregard when it tortiously interfered with PDG’s prospective economic advantage, the jury awarded PDG $42 million in punitive damages.  This verdict is significant because it reminds companies that there is no tolerance for the interference of plaintiff’s existing and prospective contractual relationships.  For information on The Employment Law Group® law firm’s practice go to http://www.employmentlawgroup.net/PracticeAreas/EmploymentContractDisputes.asp.