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Most of us are familiar with that little box that pops up every time we visit almost any website. It usually says something about agreeing to the terms of service, which are sometimes listed in the box, while other times there’s a link to a full web page devoted to a long list of legal terminology that few people bother to read. More often than not, users check the box without bothering to read all or any of the terms of service so we can go about our business. Reading all the terms of every service we ever use could very well take up most or all our time so we tend to skip over them.

Recently, U.S. District Judge Jed Rakoff recognized this fact when denying Uber’s motion to compel arbitration that was filed in Manhattan federal court.

Spencer Meyer, an Uber customer from Connecticut, sued the ride share company’s CEO, Travis Kalanick, for allegedly participating in a price-fixing scheme with drivers that allegedly raised Uber prices during periods of high demand. Because Uber takes a certain percentage of every driver’s earnings, the lawsuit alleged both Uber and its drivers benefited from the allegedly calculated rise in prices. Although the consumer lawsuit was initially filed only against Kalanick, the complaint was later amended to include Uber as a defendant and that’s when the company asked the court to compel arbitration. Continue reading ›

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Despite the high number of lawsuits that get filed these days, actually taking a lawsuit all the way to trial isn’t as common as a lot of TV dramas would have you believe. It’s an expensive and time-consuming process, which means it’s usually a last resort for everyone involved. Most people try to use mediators or some other form of neutral third party before they resort to asking a judge to weigh in on their dispute.

Even after a lawsuit has been filed, the parties involved get together outside of court to negotiate a settlement agreement. If they can reach a consensus, then they can avoid the hassle of pursuing the trial and put an end to the matter. It’s certainly better than spending the considerable time and money involved in pursuing legal matters, but it takes more than just the two parties agreeing to a settlement in order to avoid trial: the judge presiding over the case has to approve the settlement agreement.

Settlement negotiations can take place any time between the filing of a lawsuit and the start of the trial, which means the judge usually does not have all the information when deciding whether to approve the settlement agreement. Nevertheless, the judge will have received at least the plaintiff’s complaint and some sort of response from the defense. The judge then has to use whatever information they have been given in order to make sure the settlement agreement is fair to both parties. Continue reading ›

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Most large companies have entire departments devoted to handling their public relations and part of their job description includes coming up with ways to counteract negative media attention. Most of those strategies don’t involve filing a defamation lawsuit against the news organization that published the unflattering statements, but that’s exactly what Hummingbird Defense Systems did after two news organizations reported a breach of the Arizona Counter Terrorism Information Center, an intelligence center that was set up by local government authorities after the attacks on the World Trade Center.

Hummingbird Defense Systems is a small firm located in Phoenix and run by Steve Greschner. In 2007, a Chinese national was hired by Hummingbird Defense Systems as a computer programmer, which allegedly gave him access to the Arizona driver’s license database and possibly to a list of investigators and intelligence analysts. When the employee allegedly returned to Beijing with two laptops, as well as additional hard drives, the security breach was not immediately reported to the state’s attorney general, despite the fact that it may have affected as many as 5 million Arizona residents.

At the time that Hummingbird Defense Systems hired the Chinese national, Greschner was allegedly dating a Chinese immigrant who had been naturalized as a U.S. citizen and she allegedly urged Greschner to hire the Chinese national. She was never charged as a spy, although she was allegedly a suspect for a while and a federal judge did revoke her citizenship status. Continue reading ›

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Non-compete agreements were originally created as a way for businesses to prevent competitors from poaching their employees. If a high-level executive who knows a lot about the company’s trade secrets and/or has established valuable relationships with clients takes those assets to a competitor working just around the corner, the result could be disastrous for the worker’s former employer.

In order to prevent that from happening, most employers include non-compete agreements in almost all their employment contracts. These agreements usually specify a geographical area in which the employee cannot work for a competitor in a given time frame (usually six months to a year).

Although non-compete agreements can be an effective way for companies to protect their legitimate business interests, some companies have become overzealous in their attempts to hold on to their workers and have included non-compete agreements in all their employment contracts, even with their lowest-paid employees. Continue reading ›

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A recent case in the Northern District of Illinois, Helfer v. Associated Anesthesiologists of Springfield (2016 WL 183501, addressed what a plaintiff must show to sustain a claim for retaliatory termination under the False Claims Act.

Donald H. was an anesthesiologist and partner at Associated Anesthesiologists of Springfield, Ltd. in Springfield, Ill., which provides anesthesia services for Memorial Medical Center. Donald’s employment agreement gave Associated the right to terminate him with 90 days’ notice.

Donald’s fellow partners had expressed their displeasure with him for taking it upon himself on several occasions to contact third parties, such as Memorial and the Internal Revenue Service, to discuss billing and other matters concerning Associated, without the authorization of the other partners. These communications had resulted in Associated being audited. Some time thereafter, in June 2009, Donald raised concerns with other partners and shareholders about Associated’s billing of Medicare. When his concerns went unresolved, he emailed the Center for Medicare & Medicaid Services directly, again without authorization from the partners. Continue reading ›

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It’s wonderful that the legislation in our country has made so many strides to recognize women’s rights to live and work alongside men without fear of harassment or intimidation. Unfortunately, as has happened with so many other progressive civil rights, what the law says, and what actually happens don’t always coincide.

Companies are not legally allowed to fire employees or refuse to hire candidates based on their gender or as the result of a discrimination lawsuit, but there are other ways employers can (and do) retaliate. Most women who speak out against male colleagues who have harassed them suffer from both personal and professional estrangement. It’s easy enough for employers to find seemingly unrelated reasons for firing their workers and almost impossible for those workers to prove the root cause of their dismissal really stemmed from the fact they dared to defend their own civil rights.

Even companies that publicly claim to support their female employees and condemn sexual harassment are rarely doing more than paying lip service to the law. For example, 21st Century Fox recently released a statement claiming they do not tolerate any behavior that is disrespectful or creates an uncomfortable environment for its employees, but the company has allegedly been failing to live up to that promise for decades. Continue reading ›

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A federal court in Illinois recently shot down an employer’s claim that having signed a HIPAA “privacy policy” deprived an employee of whistleblower protections.

In United States ex rel. Cieszynski et al. v. Lifewatch Services, Inc. (2016 WL 2771798), Matthew C. brought a qui tam action accusing his employer, LifeWatch Services Inc., of violating the False Claims Act by billing the government for heart monitoring services in violation of Medicare rules. Matthew had signed a confidentiality agreement when he was hired by LifeWatch in 2003, which prevented him from disclosing certain documents. Three years later he was asked to sign a “privacy policy” concerning HIPAA regulations.

In a counterclaim, LifeWatch alleged that Matthew breached his employment contract when he accessed certain confidential information and HIPAA-protected materials that he did not need to carry out his job duties, and that he disclosed the information to “third parties outside LifeWatch,” presumably the government and his own attorney, to support his allegations. Continue reading ›

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Because stock trading is full of opportunities for traders to take advantage of their positions, the law takes accusations of fraud very seriously, but it works the other way, too. Traders have to work hard to protect their reputations because their livelihood depends on it. As a result, stock traders tend to react quickly if they’re ever accused of insider trading or any other forms of fraud.

According to a recent defamation lawsuit, Allstate allegedly falsely accused four traders of illegally taking advantage of their insider trading knowledge by intentionally timing trades in such a way that would inflate their own bonuses. Daniel Rivera, the managing director of Allstate’s equity division, along with three senior portfolio managers, were the four employees accused and fired as a direct result of those accusations.

In October 2009, Allstate announced the work of its equity division would be outsourced to Goldman Sachs. In December of that same year, it fired Rivera and his three senior portfolio managers (Kensinger, Meacock, and Scheuneman) for allegedly violating Allstate’s code of ethics. Because the four employees were supposedly fired with cause, they were not eligible for severance pay. The timing is certainly suspicious, but if Allstate did this to save money and avoid paying four senior employees their severance packages, the plan, if this was the plan, a fact which Allstate surely denies, then the plan backfired. Continue reading ›

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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 ›

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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 ›

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