The Business Litigators
The Business Litigators
The Business Litigators
The Business Litigators
Patrick Austermuehle and Andrew Murphy were selected by Super Lawyers as Rising Stars
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The world of big-money executive bonuses is one that most of us can only dream of, but it was the subject of a recent opinion by the Illinois Appellate Court. The First District held that under the Illinois Wage Payment and Collection Act, ABN Amro Inc. could not deny a former executive a $2-million bonus simply because he had no written compensation agreement. (Robert D. Schultze v. ABN Amro, Inc., 2017 IL App (1st) 162140)

Robert S. had held various executive positions with ABN subsidiary LaSalle Bank since 1983. He earned his salary and bonuses under an oral employment agreement. If Robert and his team met certain performance goals, he could expect to receive a multiple of his salary as a bonus.

In 2007, ABN promoted Robert to managing director and chief operating officer of Global Markets North America Division. He was then asked to manage the $21-billion sale of LaSalle to Bank of America and the $93-billion sale of ABN to Royal Bank of Scotland and two other banks, as executive lead of the ABN North America Transition Leadership Team.

Based on the bonuses paid to his predecessors in the COO job combined with his significant added responsibilities, he expected a bonus of $2-$5 million for 2008. When he learned in March 2009 that his 2008 bonus was only $200,000, he objected as the amount was not in proportion to the responsibilities he had assumed, and was much lower than his recent annual bonuses. Continue reading

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It’s hard to see how a children’s clothing store could be a competitor for a brand that sells high-end men’s and women’s clothing. But that’s allegedly what Trunk Club told a former employee who wanted to go to work for Mac & Mia, which Trunk Club said would be in violations of the non-compete agreement she had signed with them.

A subsidiary of Nordstrom’s, Trunk Club is a personal styling service for men and women, while Mac & Mia uses personal stylists to help sell children’s clothing. Molly Dowell worked as a personal stylist at Trunk Club for about six months before leaving, citing concerns about the future of the company. Nordstrom’s recently reduced Trunk Club’s value to half of what the clothing giant paid for the personal styling company, saying it had not been performing as well as Nordstrom’s had hoped it would. That, combined with the recent departure of Trunk Club’s CEO, suggests Dowell’s concerns for the company may have been well-founded. Continue reading

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Online reviews can have a powerful effect on a business these days. Before trying a new product or service, the first thing most people do is check online for reviews other customers have posted about the company and/or their products/services. Websites like Yelp were invented for that very purpose, but reviews have spread to other places online, including Google and social media platforms, such as Facebook and Twitter.

In addition to showing users individual reviews, they generally also display an average rating out of five stars at the top, and just a few one- or two-star reviews is all it takes to have a significant effect on a company’s overall ranking.

Because you’re never going to please everyone, companies have started retaliating against these negative reviews by putting “gag” clauses in their contracts with their customers. These are generally included in the Terms of Service, which most people accept without reading. Our time is limited and few people see the point in reading through a lengthy contract every time they go to buy something or view a website (in some cases, companies state that simply using a site counts as agreeing to their terms of service).

But companies have been enforcing these “gag rules,” whether customers were aware of them or not. Some of them charge a fine for each negative review. At least one company sued a couple for an exorbitant $1 million for posting a one-star review. That case was dismissed, but even such outlandish cases require people to spend the time and money to defend themselves in court – or take down their reviews. Continue reading

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In an age where people are paying and utilizing services online, a certain standard which is regulated by law and expected by clientele needs to be met.  That is why when a man from Illinois has decided to sue an online service for paying monthly fees for a service which he is claiming had multiple inactive or dead profile accounts.

In the complaint which is filed in a Federal Court, the service repeatedly asked him pay between $9.99 and $19.99 per month to connect with users who “liked” his profile after the creation of a free account, upon which, he immediately began receiving messages from other users who had supposedly liked his profile. To learn the identities of those who had liked his account, however, the plaintiff was prompted to pay for a premium, or “A-List,” service. The plaintiff alleges that right after the payment of $44.99, he knew something was amiss. Shortly thereafter, upon reviewing the profiles of individuals whose identities were previously hidden, the plaintiff allegedly discovered that most if not all of these people were associated with inactive or ‘dead’ accounts, making interaction or dating impossible.

It is alleged that the actions constitute a breach of contract and violate both the Illinois Dating Referral Services Act and the Illinois Consumer Fraud and Deceptive Business Practices Act with potential to seek class-action status. Continue reading

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Shortly after having paid a total of more than $300 million in fines and settlement payments for allegedly opening fake accounts for its customers without their knowledge or consent, Wells Fargo is once again back in the spotlight for allegations of fraud.

This time the allegations are in regards to the bank’s auto lending business, which allegedly signed up and charged customers for car insurance they may or may not have needed or been made aware of. According to the class action lawsuit, most of the approximately 570,000 customers involved were not looking for a car loan from Wells Fargo, but got one anyway after they had chosen an automobile.

Wells Fargo required borrowers to maintain comprehensive car insurance, like almost any other auto loan company. Unlike other auto loan companies, Wells Fargo allegedly bought insurance for its customers who did not have comprehensive insurance, then charged them for it. Wells Fargo even admitted to buying insurance for customers who already had coverage.

National General has also been named as a defendant in the lawsuit, as it is the company from which Wells Fargo purchased insurance on behalf of the customers it deemed were underinsured (whether they were or not). The bank then charged their customers for that insurance, regardless of whether those customers could afford the insurance Wells Fargo had bought for them.

Many of the customers who were forced to pay for auto insurance they could not afford fell behind on their payments, to the point where some were forced to default on their loans, resulting in the repossession of their vehicles. Continue reading

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Producers are often viewed by the public as greedy opportunists who do little more than mooch off their artists, who are perceived as being ones who do the “real work.” But Quincy Jones, who produced some of Michael Jackson’s biggest hits, is now saying he was cheated out of millions of dollars he says the pop star’s estate owes him.

This is coming from a man who has already made millions off music and videos created by the music icon. Attorneys for Jackson’s estate tried to paint Jones as just another money grabber out for all he can get, but Jones and his attorneys painted a different picture. They accused the Jackson estate of deliberately misinterpreting the language of the contracts to avoid paying Jones his share of the profits. Continue reading

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Can a former employee breach a nonsolicitation agreement by posting his new job on his Facebook page or inviting former colleagues to connect with him on LinkedIn? It turns out that it depends on the nature of the communication. An Illinois appellate court recently considered the role social media plays in the world of corporate non-compete agreements.

Gregory G. was a branch sales manager in the Warwick, Rhode Island, office of Bankers Life, an Illinois company that sells insurance and financial products to seniors. In 2006 Gregory signed a non-compete agreement that barred him from soliciting any employee or client of that office for two years after his employment ended. Gregory left Bankers Life in 2015 and later joined its competitor, American Senior Benefits LLC, as a senior vice president.

In a breach of contract complaint, Bankers Life alleged that Gregory attempted to recruit employees from its Warwick office by sending LinkedIn invitations to three former co-workers, who would be able to see a job posting for his new employer on his LinkedIn profile page. Continue reading

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Furniture sold in Illinois through Bon-Ton Stores was the subject of a recent trademark infringement case before the Ninth Circuit Court of Appeals (Stone Creek, Inc. v. Omnia Italian Design, Inc., No. 15-17418 (9th Cir. 2017)).

Phoenix-area furniture maker and retailer Stone Creek, Inc., obtained state and federal trademark protection for the signature red oval encircling the words “Stone Creek” imprinted on its furniture. In 2003, the company entered an agreement with leather furniture maker Omnia Italian Design to sell Omnia furniture branded with the Stone Creek label in Stone Creek stores.

Stone Creek later learned that Omnia was using its brand mark without authorization on competing products, specifically furniture sold through Bon-Ton Stores in the Midwest. Omnia digitally copied the mark from Stone Creek products and used it in marketing and warranty materials displayed at Bon-Ton galleries. Stone Creek was tipped off when, among other things, consumers began contacting them about warranties for furniture purchased at Bon-Ton.

Stone Creek sued Omnia for federal and common-law trademark infringement and unfair competition. The district court found for Omnia on the ground that consumers were not likely to be confused by the mark as defined under the Lanham Act.

A “likelihood of confusion” under trademark law turns on whether a “reasonably prudent” marketplace consumer is “likely to be confused as to the origin of the good or service bearing one of the marks.” Determining factors include the similarity of the marks and the proximity of the goods, the recognition and distinctiveness of the protected mark, evidence of actual confusion, and common marketing channels. Continue reading

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The First Amendment of the U.S. Constitution does not protect defamation, but the requirements that speech must meet in order to qualify as defamation are very specific, and even more so for public figures. The primary objective of the First Amendment is to allow citizens (and especially the press) to speak freely about public figures in order to keep the public informed on what their elected officials and candidates are doing.

In June of this year, a gunman opened fire at a baseball stadium where Republican Congressmen were practicing for a charity baseball game. In an effort to write an editorial on the event and get it published quickly enough so as to still be relevant, the New York Times made some factual errors, but it quickly corrected them and apologized afterwards.

In trying to make a point about the level of hostility between the two political parties, James Bennet, the author of the editorial, mentioned the 2011 mass shooting conducted by Jared Loughner, which left Representative Gabrielle Giffords severely wounded. Bennet also mentioned a map of targeted electoral districts that Sarah Palin’s political action committee had previously circulated.

Palin promptly sued Bennet and the New York Times in New York federal court for defamation, claiming the editorial incorrectly connected her with the mass shooting, even though the publication she had no connection to the gunman, as the newspaper had previously said so in other articles it had published. Continue reading

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Our credit rating is too important to take any chances on it. All it takes is one bad report to lower your rating, which can then inhibit your ability to obtain a loan and make any large purchases you might need, such as a home or automobile. Unfortunately, such a situation can open opportunities for companies to practically hold consumers’ credit ratings hostage until they pay their bill – even an undated bill to which the customer was never alerted.

That’s what Mandi H. alleges happened after she canceled her account with CenturyLink at the end of 2015 as a result of poor service. At the time, her account showed Century Link owed her $26 and she did not receive any other bills or communication from CenturyLink.

It wasn’t until a few months later that Mandi H.’s credit-reporting services alerted her to the fact that there was a negative report on her credit history from a company called “CenturyTel.” Hanifen did not recognize the name, but she investigated and found it was an older name for CenturyLink. When she confronted CenturyLink, Hanifen alleges they showed her a bill for $127 – the bill contained no date and Mandi H. alleges she had never seen the bill before that time. Nevertheless, CenturyLink allegedly refused remove their negative credit report on her history and continues to demand she pay a bill she insists she never received.

Rather than pay the bill, Mandi H. has opted to sue CenturyLink. She is the lead representative for a proposed class action consumer lawsuit that was recently filed against CenturyLink in Boise, Idaho. The complaint alleges there could be as many as 5 million potential class members, with damages totaling between $600 million and $12 billion. Continue reading