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Non-compete clauses have been included in employee contracts for decades now. These provisions ensure that employees do not walk off with valuable trade secrets or client lists and take them to a competitor. Putting such a clause in employee contracts makes sense, but only up to a point. A standards noncompete contract will prohibit an employee from working for a competitor within a certain geographical radius for a specified period of time. Six months to a year is pretty standard, but that time limit has been growing lately.

Non-compete agreements were first used largely by technology companies who need to guard their developments very closely. If an employee left to work for a competitor and took everything they knew about their former employer with them, the new employer would have an unfair competitive advantage. It therefore makes sense that companies would try to protect their business interests by preventing employees from going directly to work for a competitor.

The problem that employees have been facing lately is that non-compete agreements have spread beyond just those working in tech and sales. Now, everyone from camp counselors to hair stylists are being required to sign non-compete clauses. Hourly workers in these kinds of positions cannot afford to give up a year or two of work to wait for their non-compete agreement to expire and they have started to speak out against the restrictions that their employers are placing on them.

California and North Dakota already ban non-compete agreements. Now it looks like Massachusetts may be joining their ranks. Governor Deval Patrick has proposed legislation banning noncompete agreements except in a few situations. A committee in the Massachusetts House has already passed a bill incorporating the governor’s proposals, but the new law isn’t in the clear yet and supports and opponents of the bill are fighting furiously over the new measures it would impose. Continue reading ›

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With American legislature changing on a daily basis, it is not surprising to find that many of the laws out there contradict each other and courts are often called upon to determine which statute takes precedence. Such was the case in a recent lawsuit involving auto-calls made on behalf of State Farm.

In May 2007, Clara Betancourt applied for a car insurance policy with State Farm Mutual Automobile Insurance Company. While she was applying for the car insurance policy, a State Farm agent asked her if she would like to pay using a State Farm credit card. Betancourt agreed and the agent used the information provided by Betancourt for the car insurance application to apply for the credit card on Betancourt’s behalf. Betancourt provided the agent with her home phone number, her cell phone number, and her work phone number.

Betancourt testified that she provided these phone numbers to State Farm as emergency contact information to be used only “for an emergency or something serious.”

The three phone numbers that Betancourt provided all belonged to Fredy Osorio, with whom she has lived for many years and with whom she has a son.

When Betancourt failed to make a timely payment of the minimum balance on her credit card in November 2010, State Farm authorized FMS Inc., a collection agency, to attempt to collect the debt. State Farm provided FMS with Betancourt’s phone numbers and FMS proceeded to make 327 auto-dialed calls to these phone numbers in a six-month period. State Farm alleges that at no time did anyone answering the phone say that the number did not belong to Betancourt. By contrast, Osorio testified that he told State Farm agents to “Please stop calling” on two occasions. Continue reading ›

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Companies need investors to fund the company’s progress. As a result, in the same way that companies try to play up the positive attributes of a product they are trying to sell, while leaving out the negative, so companies often paint themselves in a better light to try to attract shareholders. However, because shareholders are investing their money (rather than giving it away), companies maintain certain obligations to their shareholders.

When a company fails to hold up their end of the deal in treating fairly with their shareholders, investors have the option of suing the company for damages. When multiple shareholders are wronged, they can file as a class action, giving them greater leverage in the courts. Companies have long looked for ways to put a stop to class actions before they can attain class certification. Now it looks like they have finally gotten a foothold, but how significant that foothold is, remains to be seen.

A group of shareholders of Halliburton Co. filed a class action securities lawsuit against the company, alleging that Halliburton misled investors about cost overruns, its exposure to asbestos liabilities, and the benefits of its 1998 merger with Dresser Industries Inc. According to the lawsuit, by providing false information (or failing to reveal crucial information), Halliburton allegedly caused prices of its shares to increase artificially. Continue reading ›

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The federal Fair Labor Standards Act (FLSA) applies to all employees working in the United States and regulates things like minimum wage and overtime. For example, under the federal law, all hourly employees must be paid at least $7.25 per hour. Any time that an employee works more than eight hours in a day or forty hours a week, the employer is required to compensate the employee the proper overtime compensation of one and one-half times her normal hourly rate for all overtime worked.

In addition to the FLSA, every state has their own laws to protect employees working within that state. Large corporations who do business in multiple states need to be sure that they are acting in accordance with all of the relevant labor laws in order to avoid a lawsuit.

Recently, Kindred Healthcare (which is based in Kentucky) and its subsidiaries, Professional Healthcare at Home and NP Plus, have been hit with a class action wage and hour lawsuit brought by two employees of the company working in California. The lead plaintiffs, Emma Hawkins and Ginger Rogers, are both caregivers who provide non-medical care to the elderly, ill, and disabled on behalf of Kindred Healthcare.

Kindred contracts out workers like Hawkins and Rogers to assisted living and rehabilitation facilities. According to the lawsuit, these caregivers are made to work 12-hour shifts, seven days a week, without any of the meal and rest breaks that they are entitled to under California labor law. Continue reading ›

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When considering filing a lawsuit against a company or individual, it is advisable to first make sure that you have a strong case. The first things to check are that you are covered under the relevant law and that you have a valid claim for loss of a certain monetary value. It is important to note that deciding not to buy something because the price was too high does not constitute a loss.

Ben Hoch-Parker disagrees. He and Josh Finkelman filed a class action lawsuit against the National Football League for allegedly violating the New Jersey Consumer Fraud Act (NJCFA). The lawsuit alleges that the NFL withholds 99% of its Super Bowl tickets from the general public. According to the lawsuit, the NFL gives 75% of the big game tickets to the 32 NFL teams. Five percent goes to the host team, 17.5% to each team that is represented in the Super Bowl, and the remaining 29 teams each get 1.2% of the tickets. Another 25% of the game tickets are then allegedly given to broadcast networks, media sponsors, the host committee, and other insiders.

Once the NFL’s member clubs have their tickets, the NFL allegedly places no restrictions on the sale of those tickets, allowing the NFL franchises to auction off their ticket allotments to the highest bidding ticket broker. The lawsuit alleges that, “The broker then sells the tickets for exorbitant amounts on the secondary market.”

The lawsuit is filing a claim for this allegedly illegal practice because the NJCFA states that at least 95% of tickets must be sold to the general public. Instead, the lawsuit alleges, every year, the NFL prints “tens of thousands of Super Bowl tickets, yet it only allocates a meager one percent of these tickets for release to the general public through a lottery system, forcing all other fans into a secondary market for the tickets where they must pay substantially more than the ticket’s face value to attend one of the most popular and iconic sports events of the year.” Continue reading ›

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The federal Fair Labor Standards Act (FLSA) mandates that all employees working in the United States must be paid at least the federal minimum wage of $7.25 per hour. This is true regardless of how the employee is paid. While some workers are paid per piece or on commission, the wages paid to these employees, calculated against the amount of time they spent working, must average out to at least $7.25 per hour.

The FLSA also requires that all non-exempt employees who work in excess of eight hours a day or forty hours a week must be paid the proper overtime compensation of one and one-half times the employee’s normal hourly rate. This also remains true for workers who are paid on commission or on a piece-rate basis. The employer must calculate the employee’s normal hourly rate based on the wages earned and the time spent working, in order to come up with an overtime rate for the employee.

There are many advantages to a company classifying an employee as an independent contractor. The company gets to avoid paying taxes and benefits such as health insurance. However, the law has very specific requirements for the kinds of workers that can be classified as independent contractors. For example, an independent contractor must have more freedom than an employee, such as the ability to choose when and where they perform their work and the type of clothing that they wear while working. Independent contractors also get to choose how many and which clients they work for. Continue reading ›

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Many people are intimidated by the idea of making large purchases, such as a new home or car. This is because these kinds of purchases often come with all sorts of extra fees, which can be confusing for consumers. Not everyone is aware of what constitutes a fair deal and auto dealerships sometimes take advantage of this by adding fees to a customer’s purchase without a clear explanation of what those fees are for.

Such was allegedly the case with Panhandle Automotive Inc., which does business as Bay Lincoln Hyundai Mitsubishi. Jesse Page, who represented the class of plaintiffs, filed the lawsuit against the car sales company after having bought two cars from the dealership. For each purchase, Page was allegedly charged $49 for an electronic filing fee and $489 for a delivery fee.

Of the electronic filing fee, Panhandle allegedly gave $12 to a third party that performed the electronic filing and kept the rest. Panhandle’s electronic filing fee was later raised to $147. Panhandle allegedly got to keep all of the delivery fees.

Bill Bielecky, the attorney who represented the class of plaintiffs, said that fees like this are common among car dealerships in Florida, but that they add little or no value to the consumer.

Under Florida’s Deceptive and Unfair Practices Act, the fees would have been legal if the documents used by Panhandle had expressly stated that the fees would be profit for the dealership. According to Bay County Commissioner George Gainer, who owns Panhandle, the failure to include the language in the documents was due to an error.

Such seemingly small omissions can have large consequences, as in this lawsuit, which resulted in thousands of dollars in settlement costs. “It’s just a no-brainer,” said Bielecky. “They didn’t have the language: they were going to lose.”

Gainer feels differently about his case, though. He said in a statement that if they had continued to fight the lawsuit in the courts, “we’d have won the thing.” This attitude is reflected in the fact that, as part of the settlement agreement, Panhandle refused to admit to having done anything illegal. Instead of an admission of guilt, Gainer maintains that the settlement was merely a way to avoid the expenses of a litigation, which could drag on in the courts for months.

Circuit Court Judge Timothy McFarland, on the other hand, felt that both sides had an equally strong case. When he approved the settlement, McFarland noted that “this factor weighs in favor of settlement because it is unclear which party will prevail at trial.” By agreeing to a settlement, the class of plaintiffs receives some relief, while Panhandle gets to save face. Continue reading ›

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Although many people feel that they may have a greater degree of freedom on the Internet due to its anonymous nature, virtually anything posted online can be traced back to the original IP address which was used to upload the content. That IP address can often be used to identify the individual who created the post.

A lawyer recently won a defamation lawsuit against a former client over this very issue. The attorney, Jan Hinson, alleged that her client, Vivek Pampattiwar, lied to her when she asked if a divorce action was pending. Pampattiwar allegedly said that his wife had not filed a counterclaim for divorce in his maintenance action in a separate county, despite the fact that he knew otherwise. Pampattiwar also allegedly failed to inform Hinson that she was the sixth attorney to represent him in the litigation with his wife.

Hinson allegedly checked an online docket to verify that no counterclaim had been filed before she filed a divorce action on behalf of Pampattiwar in Gwinnett County. The online docket, though, was incorrect. Pampattiwar had brought documents to the consultation with Hinson that allegedly showed that counterclaims had, in fact, been filed, but Hinson never read those documents. When Hinson discovered the counterclaims, she dismissed the divorce suit, but then she took over representation for Pampattiwar in another litigation after his lawyer withdrew from the case.

Pampattiwar allegedly resisted dismissing the divorce that Hinson had filed based on misinformation, indicated that he would pay more to have the case litigated in Gwinnett County, and took documents from her office to try to impede the dismissal of the divorce. Hinson later sought to withdraw from the representation and her motion was granted. However, Pampattiwar allegedly begged Hinson to represent him during arbitration until Hinson agreed. Then in October, Hinson allegedly contacted the law firm because he was upset about his legal bills. The complaint which Hinson filed against him alleges that Pampattiwar told a paralegal that Hinson and her staff were crooks.

The very next month, Hinson noticed a sudden significant drop in business. According to her complaint, the phones of her law office “stopped ringing”. Her staff discovered negative reviews of the law firm on Kudzu.com which called her “a CROOK Lawyer” and an “Extremely Fraudulent Lady”. The reviews were traced to an IP address which was associated with Pampattiwar.

During his testimony in the trial, Pampattiwar denied that he had failed to notify Hinson of the counterclaims in the divorce and denied posting the negative reviews of her law practice. The court ruled in Hinson’s favor, with a jury award of around $400,000, and Pampattiwar appealed the decision. In the appellate court, Pampattiwar argued that Hinson should not have relied exclusively on the online docket.

The appellate court upheld the lower court’s ruling. Reginald Greene, representing Pampattiwar in the defamation lawsuit, called the award “improper and excessive”.
Hinson has said that her screening process for taking on new clients has become more stringent as a result of her experiences with Pampattiwar.

Continue reading ›

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Once a mistake in the engineering of a car is made known, the maker of the vehicle has a responsibility to fix the mistake. However, to try to remedy the mistake in new cars, without recalling old cars with the defect, is illegal, and in some cases, potentially fatal. This was allegedly the case with General Motors (G.M.) when it realized that the ignition switch in more than 2 million of its cars was faulty. The car company worked with Delphi, the supplier that made the part, to redesign the part so that the flaw was fixed, but neither party allegedly bothered to alert the public to the flaw, which existed in millions of cars which had already been sold.

When Brooke Melton’s Cobalt suddenly shut off, causing her fatal accident in 2010, her family sued G.M. and Mark Hood was hired to investigate the accident. Hood photographed, X-rayed, and disassembled the ignition switch in his attempt to figure out how the engine suddenly shut off. Then he bought a replacement part at a local GM dealership.

Although the replacement switch that Hood bought had the same identification number as the old switch, it contained significant differences. A tiny metal plunger was not included in the replacement part and the switch’s spring was more compressed. According to Hood, there was also a difference in the amount of force needed to turn the engine on and off.
As Hood’s investigation progressed, he realized that both GM and Delphi had realized the mistake and changed the part some time in 2006 or early 2007. The new part made it less likely that the driver could bump the ignition key, causing the car to cut off power to the engine and deactivate the airbags.

Lance Cooper, the attorney representing the Melton family in the lawsuit, confronted Raymond DeGiorgio, the head switch engineer on the Cobalt, with the differences between the two switches. DeGiorgio acknowledged the differences between the two parts, but said that he could not explain why the new part had not been given a different identification number.
“I was not aware of the detent plunger switch change,” he testified in his deposition. “We certainly did not approve a detent plunger switch change.”

However, the paper trail tells a different story. In the federal filings for the recent recall of certain G.M. vehicles containing the defect, G.M. confessed than an engineer (whom they did not name) had in fact signed a document in April of 2006 which approved design changes in the switch. Government investigators have since requested that G.M. provide all documents related to the switch change and who within the company approved it.

Since Hood’s discovery of the allegedly clandestine part change, G.M. has issued a worldwide recall of 2.6 million vehicles, including Cobalts, Pontiacs, and Saturns. G.M. has said that it will replace the old part with the new one at no cost to vehicle owners. In the mean time, the company’s website contains a video which assures consumers that the old switches are still supposedly safe, so long as nothing is attached to the ignition key. A reported 13 deaths have occurred as a result of the faulty switches.

G.M. settled the lawsuit with the Melton family, but it is now facing a class-action lawsuit which consists of all owners of vehicles included in the recall. The research into the faulty part conducted by Hood will likely also play a role in that lawsuit.

Continue reading ›

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Although laws do exist to protect companies and individuals from harmful false statements, judges enforcing these laws must be careful not to violate the defendant’s right to free speech.

If a plaintiff believes that a defendant’s actions are causing harm, and must be stopped immediately, there are certain forms of emergency litigation which can be used to do this. When filing a complaint against a defendant, the plaintiff can also request that the court grant a preliminary injunction against the defendant’s harmful actions. This protects the plaintiff from any further harm the defendant might do in the months or even years that it can take for the court to reach a decision in the lawsuit. If the plaintiff is successful in proving that the defendant’s actions were harmful and illegal, the preliminary injunction may then become permanent. If, on the other hand, the defendant is successful in defending their case, then the preliminary injunction may be removed.

However, one situation in which courts are unlikely to grant a preliminary injunction is that of defamation. In Organization for a Better Austin v. Keefe, the Supreme Court ruled that it is unconstitutional for a court to issue a preliminary injunction to enjoin libelous statements.
This ruling is intended to protect individual consumers against large corporations that have a team of lawyers on their side. The corporation can act quickly to get a local judge to issue a preliminary injunction against the consumer before the defendant even has a chance to acquire her own counsel. Once that happens, the lawsuit is already going in favor of the plaintiff, even though it has just begun. The defendant is censored for the duration of the lawsuit, and any settlement negotiations which might take place do so in the context of the judge having issued a preliminary injunction against the defendant based on the likely outcome of the trial.
While the Supreme Court’s ruling applies to preliminary injunctions all over the country some states have laws which forbid even a permanent injunction to be issued against defamatory statements. In Missouri, for example, the local law points out that the state constitution makes such an injunction an impermissible prior restraint, although certain exceptions to this do exist.
In addition to state and federal laws protecting freedom of speech, some homeowner’s and renter’s policies include coverage which protects the homeowner or renter from accusations of libel. This turned out to be the case when Cooney posted a video on his YouTube page which made some statements about Jim Butler Chevrolet. Butler took these statements to be libelous and had his large law firm file a defamation lawsuit and petition a judge to issue a temporary restraining order against Cooney and his video. The judge complied before Cooney even had a chance to acquire his own attorney.

When he did manage to find legal representation, the lawyer advised Cooney to check his homeowner’s policy. Sure enough, it included libel coverage. They were able to get the judge to dissolve the temporary restraining order and to deny a preliminary injunction. Cooney was then able to restore his video to his YouTube page while the lawsuit progressed.

Continue reading ›

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