Published on:

When billions of dollars are on the line, the end of a personal friendship can jeopardize business investments, as well as personal relationships, especially when one party’s mental competence is called into question. That’s exactly what happened when Sumner M. Redstone, the head of a media empire that includes Viacom and CBS, among others, disinherited his former lover and long-time friend, Manuela Herzer, and banished her from his multi-million-dollar mansion, which she was set to inherit before he kicked her out and changed his will.

Herzer filed a lawsuit claiming that, at 93 years old, Redstone’s mental capacity had deteriorated to the point where he was no longer fully aware of what he was doing and that he was improperly influenced by his daughter, Shari Redstone, with whom he had been estranged and just recently reconciled. Herzer’s complaint alleged Shari is influenced solely by her father’s wealth, while both Sumner and Shari accuse Herzer of being the gold digger.

After hearing testimony from Herzer and Shari, among others, including video testimony from Sumner, the California judge in charge of the case dismissed it. Herzer plans to appeal that decision, but even if she doesn’t succeed, her complaint has had consequences that have reached all over the country. The question of Redstone’s mental capacity has lead high-level executives in his companies to question whether he’s mentally capable of effectively running all the companies under his vast media empire. Continue reading

Published on:

The U.S. Court of Appeals for the Seventh Circuit recently held that client victims of a lawyer’s fraud take precedence over a commercial lender in being paid out of funds owed to the lawyer’s firm. Attorney William C. of Indiana-based Conour Law Firm, LLC is serving a 10-year prison term for stealing $4.5 million from clients’ trust funds. His victims obtained a judgment against him in 2014. Timothy D., an attorney at Conour, had previously left to join the Ladendorf Firm, bringing 21 Conour clients with him who eventually generated over $2 million in fees. William’s victims, as well as the Conour Firm’s lender, ACF 2000 Corp., claimed the right to a portion of those funds. Writing for the Seventh Circuit in ACF 2006 Corp v. Devereux, No. 15-3037 (7th Cir. 2016), Judge Easterbrook summed up the ensuing battle: “This appeal presents a three-corner fight about who gets how much of that money.”

At issue was how much of the $2 million belonged to the Conour Firm for the services it performed before Timothy D. left, and how those funds should be divided between the victims and ACF 2000. At trial, the federal district court concluded that the Conour Firm was entitled to some $775,000 under principles of quantum meruit, and that ACF had priority of payment over the victims. Continue reading

Published on:

When someone makes a promise, many people will ask them to “put it in writing” as a way to make sure they follow through. These written documents then form contracts that can be upheld in court if necessary, but the courts don’t always agree to uphold a contract. Just because it was signed and agreed upon by both parties at one point in time does not necessarily make a contract legally binding.

One promise that employers are having an increasingly difficult time enforcing is the noncompete agreement. It’s an agreement included in an employment contract in which both the employer and the worker agree that the employee will not work for a competitor. Noncompete agreements were originally designed to protect the vested interest employers have in their high-level executives – the ones who are most likely to have access to sensitive information, trade secrets, and important relationships with clients. For these kinds of employees to leave with all that business and work for a competitor across the street could be disastrous for a company.

But in their efforts to make iron-clad noncompete agreements, employers sometimes overstretch and include requirements that make it unreasonably difficult for the employee to find any work at all after their employment ends. Continue reading

Published on:

In addition to defining things like overtime and the minimum wage, the federal Fair Labor Standards Act (FLSA) requires employers to maintain several other labor practices in order to make sure they are not taking advantage of their workers. For example, the FLSA requires employers to provide all their workers with detailed wage statements that list the pay period, the number of hours worked by the employee, the amount of wages earned, wages withheld, and wages paid. Employers are required to maintain records of all this information for at least seven years with the possibility of hefty fines from a court or a government body, such as the Department of Labor, if they fail to do so.

In addition to the FLSA, each state has its own laws protecting the employees that work within its boundaries. California not only has a higher minimum wage than the federal limit, but also requires employers to provide all their non-exempt hourly workers with regular meal and rest breaks throughout the day: one paid, uninterrupted rest break after every four hours of work and one unpaid, uninterrupted meal break for every five hours of work. For every day an employee does not take one of these breaks, for any reason, they are entitled to one hour’s worth of wages, in addition to all wages, tips, bonuses, etc. earned that day.

California labor law also requires employers to provide their workers with all the wages they’ve earned within a timely manner (72 hours) after their termination of employment. If an employee provides at least 72 hours notice prior to the termination of their employment, then all their wages are due upon termination. Continue reading

Published on:

 

Our Chicago automobile fraud and Lemon law attorneys near Wheaton, Warrenville and St. Charles have experience representing victims of  odometer roll backs, title washing, fake or improper certifications of rebuilt wrecks and other used car scams. We bring individual and class actions suits for defective cars with common design defects and auto dealer fraud and other car dealer scams such as selling rebuilt wrecks as certified used cars or misrepresenting a car as being in good condition when it is rebuilt wreck or had the odometer rolled back. We also see cases where new car dealers conceal that the car has been in accident while in their possession or used car dealers who put duck tape in back of the check engine light to conceal serious engine or emission problems.  Super Lawyers has selected our DuPage, Kane, Kendall, Lake, Will and Cook County Illinois auto-fraud, car dealer fraud and lemon law lawyers as among the top 5% in Illinois. We only collect our fee if we win or settle your case. For a free consultation call our Chicago class action lawyers at our toll free number (877) 990-4990 or contact us on the web by clicking here.

 

Published on:

A recent trade secrets case in the U.S. District Court for the Central District of Illinois may make individuals think twice before they attempt to recruit a proxy to get around a noncompete clause. (Orthofix Inc. v. Melissa Gordon (2016 WL 1170896))

Medical device company Orthofix Inc. sued former sales representative Melissa G. for violating the non-solicitation, unfair competition, and nondisclosure provisions of her employment contract; appropriating trade secrets in violation of the Illinois Trade Secrets Act (ITSA); and tortious interference with its business relations.

Orthofix sells “bone growth stimulators,” which purportedly promote the healing of broken bones, to physicians. Melissa worked for Orthofix from 2007 until March 2013. Melissa’s sales territory was central Illinois, later expanding to Chicago, and her job involved keeping detailed notes on physician clients. Upon hire, she signed an agreement promising not to do business with Orthofix customers or compete with the company for one year following separation, nor disclose its trade secrets or confidential information. Continue reading

Published on:

What happens when an employee brings substantial expertise and business contacts in a specialized area to a new employer, then the employer changes ownership and attempts to enforce restrictive covenants against him? A recent Illinois appellate case AssuredPartners, Inc. v. Schmitt, 2015 IL App (1st) 141863 (2015) does not bode well for employer plaintiffs.

William S. was a wholesale broker in the lawyers’ professional liability insurance market (LPLI). In 2006 he became a senior vice president for ProAccess, a New Jersey-based insurance brokerage with offices in Chicago. William had formerly been a broker for ProQuest, where he built an extensive network of contacts and brokered millions of dollars in LPLI transactions with insurers in the U.S. and United Kingdom. He signed an employment agreement with ProAccess which provided that the restrictive covenants contained therein did not apply to LPLI activity, in acknowledgement of his pre-existing connections in the area.

In late 2011, ProAccess was acquired by AssuredPartners LLC. According to William, he was told he had to sign a new, more restrictive employment agreement to retain his job and that he could not alter any of its provisions. Schmitt resigned from AssuredPartners in 2013 and began brokering LPLI under a new retail brokerage, and, purportedly, soliciting ProAccess business and customers. AssuredPartners sued William to enforce the restrictive covenants. He filed a counterclaim seeking a declaratory judgment that the covenants were unenforceable as a matter of law. The circuit court found the covenants overbroad and unreasonable because William was “prevented from any business activity related to any type of professional liability insurance, not just LPLI.”

On appeal, AssuredPartners argued it had a legitimate protectable business interest in its “customer expiration” list, which contained information about LPLI customers and which it claimed William “blatantly” stole and used to siphon business away from ProAccess. The plaintiffs contended the noncompetition provision at issue was no broader than necessary to protect the company’s interest in the list. Continue reading

Published on:

Before now, if an organization had its trade secrets stolen, its only recourse was usually to bring an action against the perpetrator in state court under the Uniform Trade Secrets Act, which was adopted by most states to provide a uniform civil remedy for trade secret theft, or under state criminal laws. The only federal protection for trade secrets was criminal sanction under the Economic Espionage Act of 1996. That changed this May, when President Obama signed into law the Defend Trade Secrets Act, which gives owners of trade secrets a new federal civil cause of action for misappropriation of their proprietary information. The law is intended to provide an alternative to the current patchwork of state laws governing the issue, but not replace them; unlike the federal Copyright Act, for instance, DTSA does not pre-empt state law.

DTSA allows a plaintiff to seek relief in federal court for misappropriation of trade secrets “by improper means” related to a product or service in interstate or foreign commerce. Improper means is defined as theft, robbery, misrepresentation, espionage, or breach of a duty to maintain secrecy. The law establishes civil remedies such as injunctions and damages for actual loss and unjust enrichment, or a “reasonable” royalty where an injunction is not feasible. If a trade secret is “willfully or maliciously” misappropriated, damages may be doubled. Trade secrets are broadly defined to include all forms and types of information that the owner has taken reasonable measures to keep secret, and which derive independent, actual or potential economic value from being unknown to the public. Continue reading

Published on:

Many of us have heard of art historians debating whether a new-found painting was created by a certain artist, but it’s much more rare to hear of such a debate over a painting allegedly created by an artist who’s still living. Even more rare is the owner of a painting suing the artist he claims painted it, but that’s exactly what Robert Fletcher, a 62-year-old retired corrections officer, is doing.

Fletcher was working in a correctional facility in Thunder Bay, Ontario in 1975 when he met a young man named Peter Doige who was from Scotland and was taking classes at a local college. Doige was brought to the prison farm Fletcher worked at on an LSD charge, and Fletcher says he saw Doige creating a painting of a rocky desert scene using acrylic and canvas and offered to buy it from him. Continue reading

Published on:

A corporate defendant waives the right to enforce an arbitration clause in an employment agreement if it asserts an affirmative defense to a complaint that is unrelated to arbitration. So ruled the First District Appellate Court of Illinois in a recent breach of employment contract case called Koehler v. Packer Group Inc., 2016 IL App (1st) 142767.

Michael K. was CEO of Packer Engineering, a subsidiary of The Packer Group. When he reported evidence of alleged financial improprieties on the part of Packer’s chairman to the company’s board, he claims he was dismissed in retaliation. He filed suit against the company for breach of his employment contract, and also against various Packer officers individually for tortious interference with contract, claiming they induced the company to breach the contract. The defendants argued that, pursuant to the contract’s terms, Michael’s claims should have been resolved in arbitration.

Michael’s four-year employment agreement contained an arbitration clause waiving the right to resolve disputes in court. The contract was signed by Michael, Packer’s chairman, and several Packer executives. Michael claimed that after he refused to go along with the alleged financial improprieties, he was offered the option of demotion or termination and chose termination. In his complaint, he sought future salary and bonus compensation plus punitive damages. In its answer, Packer asserted the affirmative defense of Michael’s own breach of the employment agreement, then later moved to dismiss the complaint on the grounds that the arbitration provision deprived the court of jurisdiction. The individual defendants argued that the arbitration clause also applied to Michael’s suit against them for tortious interference, claiming they had signed the agreement in their corporate and not individual capacities. The circuit court ruled that Packer waived its contractual right to arbitrate when it answered Michael’s complaint without asserting the right.   Continue reading