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Root Consulting Inc. v. William Insull, 2016 WL 806556 (N.D. Ill., March 2, 2016)

An officer and shareholder of a closely held corporation has a fiduciary duty not to compete with the company even if he is forced out of the organization.

William I. was sued by Root Consulting Inc. and fellow shareholders for breach of fiduciary duty after he formed a competing company and solicited business from Root customers, while still a vice president and shareholder of Root (Root Consulting Inc. v. William Insull (2016 WL 806556)). Root is an Illinois-based information technology company with operations in Illinois and Texas; William I. is a Texas resident. William I. claimed his employment ended in July 2013 when he was “frozen out” (or constructively terminated) by the other shareholders, and therefore he had no fiduciary duty to refrain from competition. However, U.S. District Judge Robert Blakey found that he remained vice president and 47.5% shareholder until February of 2014, and that he continued to do work for Root after his alleged termination date.

Under Illinois law, corporate officers owe a fiduciary duty to their corporation and to its shareholders and may not enrich themselves at the expense of the corporation. Under the “corporate opportunity” doctrine, a fiduciary cannot take personal advantage of business opportunities that arise from and rightfully belong to the corporation. The officer’s resignation does not relieve him of liability if he acquired the opportunity before his employment ended. Continue reading ›

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Ask almost anyone what a donut is and they’ll most likely describe it as a round pastry that’s fried and then usually glazed with sugar and sometimes various toppings, such as frosting and/or sprinkles. The definition usually consists of a hole in the center, unless the pastry is filled, but two bakeries have started making square donuts and are now fighting over the name “Square Donuts.”

A bakery in Terre Haute, Indiana (called “Square Donuts”) has been making donuts in a box-like form since the 1960s. When Family Express, a convenience store based out of Valparaiso, Indiana, started making their own square donuts in 2005, the Square Donuts sent a cease and desist letter, saying the name “square donuts” was proprietary.

Family Express responded that they did not think their use of the term “square donuts” constituted infringement. They didn’t hear back from Square Donuts so they continued making their box-like pastries. Family Express markets these oddly-shaped donuts on their website as one of their main offerings, saying they’re made every day before being delivered to all their outlets. They even posted a video that shows how the donuts are made, including a machine that cuts the pastries into squares.

The company talks up its oddly-shaped donuts as a unique attraction, despite the fact it has turned out that the shape of their donuts is not so unique after all. In fact, Family Express was about forty years behind another the Terre Haute-based bakery in making and marketing donuts in a new shape. Far from being the first to think of this, Family Express isn’t even the first in the state to make and advertise square donuts, much less the first in the country. Continue reading ›

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The U.S. Constitution gives every citizen the right to privacy, but it also grants the right to freedom of speech and courts frequently have to walk a fine line between the two. The law gets especially difficult to navigate when public figures sue journalists for defamation.

The writers of the Constitution recognized the value in not restricting the right of journalists to investigate and report on whatever they found newsworthy. Because of this, the law requires public figures to bear a higher burden of proof than private citizens when filing for defamation, including evidence that the publisher new the statements were false and made them with the intention of harming the public figure’s career.

The idea behind the law is that it is in the best interests of the public to have access to information on public figures. This is especially true of a democracy in which the public should have the right to know what the people they’re voting for are really up to, but the term “public figure” now includes all sorts of entertainers and athletes, in addition to politicians. Continue reading ›

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Almost everyone who has signed an employment agreement in the United States has most likely signed a noncompete agreement. They are agreements included in the contract that state that the employee will not work for a competitor of the employer in the event their employment is terminated for any reason. They usually include a geographical and a time requirement. For example, most such agreements restrict the employee from working for a competitor within five or ten miles of the employer for six months or a year after termination of employment.

Each state has their own laws governing employment contracts and noncompete agreements. California is the strictest and won’t uphold any noncompete agreements at all. Most courts will enforce noncompete agreements, as long as they protect only the employer’s “reasonable” business interests.

Courts recognize that employers have a legitimate business interest in their employees. They devote significant time and resources to training those employees, not to mention the trade secrets and clients those employees have access to. Noncompete agreements are a way for businesses to protect themselves from competitors who might try to poach employees, but courts will often refuse to enforce a noncompete agreement if the judge thinks it’s too restrictive. Continue reading ›

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Our Chicago car fraud and Lemon law attorneys near Lincolnwood and Elmwood Park 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, is a flood vechicle 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 630-333-0333 or contact us on the web by clicking here.

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Our Chicago car fraud and Lemon law attorneys near Elmhurst and Downers Grove 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 630-333-0333 or contact us on the web by clicking here.

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Our Chicago car fraud and Lemon law attorneys near Orland Park and Palatine have experience representing victims of title washing 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 630-333-0333 or contact us on the web by clicking here.

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Celebrities often have to deal with false reports about their personal and professional lives. It’s a known hazard of the job and each celebrity deals with it in their own way.

It’s rare that a celebrity will go so far as to file a defamation lawsuit against someone for making false statements because they’re very difficult to prove. The First Amendment of the U.S. Constitution grants us the right to free speech and courts have constantly had to balance that right with the right of individuals to protect their careers and reputations in the event someone makes defamatory statements about them.

One of the ways the courts strikes this balance is by requiring public figures to bear a higher burden of proof when filing defamation lawsuits. The law is based on the idea that free and open discussion of public figures is in the best interests of the public, and should therefore be encouraged. As a result, the law requires public figures to be able to prove the person or entity knew the statements were false at the time they were made, and that the defamatory statements had a significant negative impact on their career. Continue reading ›

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The following lists some of the key factors to consider as you face business dispute or shareholder dispute litigation:

• Business Litigation Goals. It is important to consider what you hope to accomplish through business dispute litigation. It is important to consider the ideal end result as you evaluate your options and litigation strategies. Unfortunately, the ideal end results often gets lost in the highly-charged emotions of litigation so it is important to set out your litigation goals at the outset and remind yourself of your optimal resolution through the partnership litigation process. Understanding your goals will also help you evaluate potential settlement offers.

• Litigation Strategy. It is important to know where you want to go so that you can then develop a litigation strategy, a legal map of sorts, on how you plan to reach your end goal. A business litigation strategy should be developed in close collaboration with your business litigation lawyer. At DiTommaso Lubin, our knowledgeable Illinois business lawsuit attorneys can help you analyze complex legal issues, such as potential violations of fiduciary duties, alleged breach of contracts, available accounting information, and civil procedure requirements, in order to develop the appropriate business litigation game plan.

Continue reading ›

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Like everything else, automated timekeeping systems have their advantages and disadvantages. On the one hand, they make timekeeping and bookkeeping much easier and less labor intensive, especially for large corporations with many employees. On the other hand, employers who use automated timekeeping systems need to make sure they have a system in place to make adjustments whenever an employee works longer hours than they were initially scheduled for.

Under the federal Fair Labor Standards Act (FLSA), overtime is defined as any time spent working after eight hours a day or forty hours a week. Most employees working in the United States are entitled to one and one-half times their normal hourly rate for all overtime worked. There are exceptions to the overtime requirement, but the FLSA is very specific about the types of workers that can be considered exempt from overtime.

According to a recent class action wage and hour lawsuit against Zillow Inc., the online real estate company allegedly failed to properly compensate its inside sales consultants for the overtime they worked. The class action lawsuit alleges Zillow used an automated timekeeping system and failed to make adjustments to the timekeeping records when employees worked through their breaks or after their scheduled shift had ended. Continue reading ›

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