When officers of a corporation misrepresented the capacity of the corporation to meet requirements of an RFID manufacturing project, the district court allowed some claims for breach of contract, quantum meruit, and unjust enrichment to proceed. The court also dismissed some claims against the individual officers of the corporation, based on questions regarding the existence of valid contracts between the client and the officers.

A-1 Packaging Solutions, Inc. is a corporation that selects and provides RFID (Radio Frequency Identification) technologies from a variety of manufacturers to provide custom solutions for customers. Fiberteq hired A-1 to design an asset and inventory tracking system for its facility in Danville, Illinois. A-1 contacted several manufacturers and distributors who provided the relevant technology, in search of options to complete the system.

Dr. William Davidson and Jan Svoboda, the Chief Technology Officer and President of Firefly RFID systems, were one company contacted by A-1. In response, Davidson and Svoboda told A-1 that Firefly had expertise in RFID hardware and deployments, and had the capability to build the system that A-1 had designed. As part of the negotiation, A-1 specified to Firefly that any rights to the software created by Firefly were required to be transferred to A-1. Firefly agreed. A-1 then retained Firefly to assist in designing and building the RFID system for Fiberteq. Continue reading ›

After a “professional sugar baby” went on a campaign of revenge targeting her ex-boyfriend, the district court awarded $7.5 million in damages to the ex-boyfriend. The woman’s actions spanned 17 months and included multiple defamatory postings on her social media accounts, as well as the creation of many fake social media profiles in the ex-boyfriend’s name, which she used to distribute false and harmful content to her ex-boyfriend’s personal and business contacts.

John Doe is a 45-year-old technology professional employed as a Senior Director at a consulting firm. Jessica Jiahui Lee is a 19-year-old part-time exotic dancer and “professional sugar baby” who enters into relationships with affluent men in exchange for gifts, travel, and a life of luxury. Doe met Lee in or around February 2017 while traveling to Las Vegas, Nevada for business. The two began a casual dating relationship in March 2017, which lasted for approximately seven months. Continue reading ›

After signing a non-compete agreement with his employer, president of a consulting firm resigned after less than a year, joined a competitor, and began to solicit his former clients and employees. The consulting firm sued, arguing that the ex-employee was bound by the terms of the non-compete and had breached his employment agreement. The Illinois Appellate Court found that the noncompete clause was unenforceable because the employee had not worked for at least two years after signing it, and the only consideration given in exchange for agreeing to the noncompete was continued employment.

Axion RMS, Ltd. is a company specializing in insurance brokerage and employee benefits consulting services. Michael Booth was hired by Axion in October 2010 as Vice President of Sales. He was later promoted to President of Axion in 2014. Booth and Axion entered into an employment agreement when he was hired, and the agreement included a noncompete clause that restricted Booth from soliciting Axion’s clients or employees during his employment and for a period of two years following termination of his employment.

In December 2015, Booth resigned from Axion in order to begin work with at HUB International Limited, a competitor of Axion. Axion later sued, alleging that, shortly after joining HUB, Booth began directly or indirectly contacting and soliciting Axion’s existing clients and customers, as well as several Axion employees. Booth filed a motion to dismiss the complaint in the circuit court. In his motion, Booth cited several cases from the Illinois Appellate Court which held that, where the only consideration given to an employee in exchange for signing a non-compete agreement is continued employment, the employee must work for at least two years after signing the covenant in order for there to be adequate consideration. Booth argued that, as he had resigned from his position less than a year after agreeing to the non-compete, it was unenforceable. Continue reading ›

Although the number of women attending law school has outnumbered the number of men attending law school for several years now, it seems those women have a harder time climbing the corporate ladder than their male counterparts once they graduate from law school. According to a recently proposed class action lawsuit against Jones Day, the law firm allegedly maintains a fraternity-type culture that consistently treats men better than women – especially women who are pregnant and/or already have children.

The proposed class action gender discrimination lawsuit was filed by Andrea Mazingo, Nilab Rahyar Tolton, and four other women who have chosen to remain anonymous, on behalf of all female associates who are working for or have worked for Jones Day in Irvine, California. Despite the fact that the firm hires the same number of male and female associates, their situations allegedly vary drastically once they get the job. Female associates are allegedly paid less than their male counterparts and are significantly less likely to make partner. The law firm also allegedly has a practice of regularly firing women who get pregnant and retaliating against women who speak up.

By contrast, the lawsuit alleges male associates were consistently mentored, groomed for partnership, and given better assignments and more access to clients than their female counterparts. Mazingo alleges she was encouraged to wear high heels, another plaintiff claims she was told to smile more, and another was allegedly referred to as “eye candy.” Continue reading ›

Last month, the United States Supreme Court issued a unanimous opinion resolving a long-standing circuit split concerning when a copyrighted work is considered “registered” for the purposes of initiating a copyright infringement lawsuit. The Supreme Court held that a lawsuit for copyright infringement can only be filed after the U.S. Copyright Office actually issues a registration certificate for the work.

The case, Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, centered on whether Fourth Estate, an online news organization, could sue Wall-Street.com for copyright infringement after the defendant canceled its license agreement but continued to display Fourth Estate’s content on its website. The fourth Estate filed its infringement suit after it had filed applications to register the articles with the Register of Copyrights but before it received registration certificates for the articles. Continue reading ›

The district court granted summary judgment to a bank on a breach of contract claim where a bank customer was precluded from suing bank for payment of fraudulent checks because customer did not report fraud within 90 days of receiving statement containing copy of first fraudulent check, and account agreement specified that fraud was required to be reported within 90 days.

Designer Direct, Inc. has a bank account with PNC Financial Services Group, Inc. Three of Designer Direct’s officers are authorized signers on its bank account. Between October 2016 and May 2017, Designer Direct’s former office manager, Kristiana Ostojic, forged one of those officers’, Stephen Rebarchak, signature on thirty-nine checks drawn on the account. Each check was made payable either to Ostojic or KO Development. The sum total of the fraudulent checks was $185,421.94

Ostojic deposited each check at either US Bank or JP Morgan Chase. The checks were then eventually presented to PNC for payment and were processed during the normal course of business through an automated system. PNC mailed account statements to Designer Direct each month. Each statement identified checks drawn on the account by date, check number, and amount. PNC also included copies of drawn checks with each statement.

Rebarchak reviewed all of the statements sent by PNC but did not see the electronic check copies because Ostojic intercepted the online statements and removed the check images before he could see them. When Rebarchak did finally see one of the checks, in May 2017, he was immediately aware of the fraud and notified PNC the next day. Designer Direct eventually sued PNC in federal district court in the Northern District of Illinois for breach of contract, alleging that PNC breached the account agreement by failing to exercise ordinary care in the payment of the checks. Continue reading ›

Employers in New Jersey must review their current policies and practices to ensure compliance with a new statutory prohibition on the inclusion of non-disclosure provisions in employment contracts or settlements involving discrimination, harassment, or retaliation claims. The new law, signed by New Jersey governor, Phil Murphy, on March 18, 2019, and effective immediately, states that employers cannot insist that employees keep confidential the details of such claims or settlements. The law makes clear though that it should not be construed as prohibiting employers and employees from entering into non-compete agreements and confidentiality agreements relating to proprietary information, such as non-public trade secrets, business plans, or customer lists or information.

The law renders any provision in an employment contract that waives “any substantive or procedural right or remedy relating to a claim of discrimination, retaliation or harassment … against public policy and unenforceable against a current or former employee who is a party to the contract or settlement.” The law also does not permit prospective waivers of any right or remedy under the New Jersey Law Against Discrimination, or any other state statute or case law. The new provisions, however, do not apply to collective bargaining agreements. Continue reading ›

Although non-compete agreements were originally invented to keep executives from running off to competitors with trade secrets and/or client relationships, many businesses have started taking advantage of noncompete agreements by including them in employment contracts with all their workers – even those at the bottom rung of the corporate ladder.

Workers earning minimum wage (or close to it) doing things like making sandwiches and entering data into a computer system are being made to sign employment agreements that prohibit them from working in any capacity for a similar company. Despite the fact that these are unskilled jobs (often held by people who don’t even have a high school diploma), and certainly don’t include access to any important trade secrets, workers are being made to sign such agreements as a condition of employment. And when agreeing to all the terms of the contract is the difference between getting the job and going without a paycheck, most workers don’t consider it much of a choice.

Although signing the employment contract might get them the job, it makes it much harder for them to move up the corporate ladder because the non-compete agreement often means they can’t leverage their experience to get a better paying position with another company. Their options are to try to move up the ladder in their own company or stay in their position where they’ll continue to earn the same low wage.

If employees try to take a new job in violation of the non-compete agreement, they can be prevented from doing so or even made to leave their new job after they’ve settled into it. In many cases, the clause prevents workers from even looking for new employment or asking for a raise for fear of retaliation from their employer. And when they’re not allowed to seek out a similar position with another company that pays better, they have no leverage to ask for a raise. Continue reading ›

As fewer physicians are forming their own practices, they are finding one potential disadvantage to hospital or physician group employment: non-compete agreements. Physician employment contracts, particularly for specialists, increasingly include non-compete agreements or non-solicitation agreements (sometimes referred to collectively as restrictive covenants). This can lead to expensive, protracted legal disputes when doctors attempt to leave one physician group for another or desire to form their own practices. Further, many patients lose contact with their doctors when they switch practices. In a recent survey of nearly 2,000 primary care doctors in 5 states, 45% of the physicians surveyed had covenants-not-to-compete or other restrictive covenants in their employment agreements.

As large health systems look for ways to remain profitable, many are turning to physician practices to expand specialty offerings and attract new patients (or obviate the need for patients to go to other hospitals or practice groups for different medical needs). From 2015 to 2016, hospitals acquired 5,000 physician practices and employed more than 14,000 physicians, according to a study conducted by the Physician Advocacy Institute. According to the study, between 2012 and 2016, hospital-owned physician practices doubled and there was a 63% increase in hospital-employed doctors. Nothing in recent health care trends indicates an end to this movement. Continue reading ›

Where a class of consumers sued an energy company for breach of contract, fraud, and unjust enrichment, the district court dismissed some, but not all, of the claims. The district court found that the consumers had sufficiently alleged that the energy company violated its agreement to charge rates for electricity based on market conditions and that the consumers had pled a claim for unjust enrichment in the alternative. However, the court found that the consumers failed to allege adequate details of a fraudulent scheme.

Verde Energy USA, Inc. was sued by a class of consumers in federal court for the Northern District of Illinois. The consumers alleged that Verde violated the Illinois Consumer Fraud and Deceptive Business Practice Act, breached its contract, or alternatively was guilty of unjust enrichment with respect to the class. The consumers’ complaint alleged that Verde had taken advantage of the deregulation of the Illinois energy market, convincing consumers to switch from their prior energy company to Verde by offering a teaser rate that was lower than the utilities’ actual rates for electricity. The consumers alleged that, after the teaser rate expired, Verde switched consumers to a variable rate that was not based on market conditions as required by the contract the consumers had with Verde. Continue reading ›