Employment Lawyer Scott Oswald Presents at DC Bar

Tuesday, June 15th, 2010 | Breach of Contract, Executive Compensation, Executive Compensation Attorney, Noncompete Litigation, Noncompetition Litigation, Severance Agreements | No Comments

On June 14, 2010, Scott Oswald, Principal at The Employment Law Group® law firm, spoke at a D.C. Bar CLE event entitled “Fundamentals of Employment Law:  Establishing the Employment Relationship.”  For more information about upcoming speaking engagements featuring the employment attorneys of TELG, click here.

Eastern District Court of VA Grants Motion to Dismiss Employer’s Non-Compete Complaints

Wednesday, November 18th, 2009 | Breach of Contract, Noncompete Litigation, Noncompetition Litigation, Tortious Interference | No Comments

On November 16, 2009, Judge Trenga of the U.S. District Court for the Eastern District of Virginia granted defendants’ Motions for Summary Judgment in a suit brought by an employer against former employees for breach of non-compete agreements.  The suit also alleged various breach of contract and tortious interference with business claims. 

In the case, Deltek, Inc. v. Iuvo Systems, Inc., the Court applied a balancing test.  The Court acknowledged Deltek’s legitimate interests in preventing former employees from competing with its proprietary services through the use of Deltek’s confidential and proprietary information as well as the employees’ Deltek funded training and expertise.  However, the Court found that the agreements were too broad and held that Deltek’s interests were eclipsed by the employees’ interests and public policy.  In deciding, the Court took an unusual approach of comparing the agreements of two employees which extended one and two years.  The Court drew a negative inference and found the existence of a one year agreement to suggest “that Deltek itself recognizes that a two year restriction is longer than its legitimate interests require.”

Employers have a legitimate interest in protecting their proprietary information and investment in their labor force.  This interest must be balanced with the public’s interest in promoting gainful employment and economic growth.  Anyone asked to sign a non-compete agreement should give it careful consideration and realize the potential for long-term consequences.

For information on The Employment Law Group® law firm’s Non-Compete Practice, click here.

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.

Homebuilder Agrees to Pay $4 Million to Former Executives in Breach of Contract Dispute

Friday, March 27th, 2009 | Breach of Contract | No Comments

Standard Pacific Corp. (“SPC”) has agreed to pay a total of $3.95 million to two former executives to resolve a breach of contract dispute.  According to the former executives, SPC breached their employment agreement when it allegedly violated the terms of a December 1, 2006 change-in-control agreement.  The settlement agreements call for lump sum payments to be made to the former chief financial officer and former executive vice-president in the amount of $2.4 million and $1.55 million, respectively.  The lump sum payments represent more than half of the maximum amount each executive could have received under their 2008 bonus arrangements and the December 2006 change-in-control agreement.  Additionally, each executive will receive a reimbursement of up to 24 months of COBRA/Cal-COBRA payments and 90 days to exercise any vested stock options.

The settlement agreements are significant because they demonstrate the willingness of some employers to readily resolve employment-related disputes to avoid litigation.  However, due to the complex nature of such disputes, executives who believe that the terms or conditions of their employment have been compromised by their employer should seek experienced counsel capable of handling such disputes. 

The Employment Law Group® law firm has successfully represented and advised senior executives in employment-related contract disputes including breach of stock option agreements, compensation agreements, and severance.  For more information about The Employment Law Group® law firm’s Executive Counsel Practice, click here.