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Nobody likes getting a bad job performance review, but can an employee who receives one and later loses her job bring a winnable claim for defamation? Probably not, according to a recent decision issued by the Illinois First District Appellate Court.

Sandra G. was employed by the American Association of Nurse Anesthetists (AANA) in an executive position. Upon hire, Sandra signed an offer letter stating her employment was “at will” and could be terminated at any time. About a year and a half later, she was informed the budgetary funding for her position had been eliminated, ending her employment with AANA.

In 2010, she brought a complaint against AANA and one of their executives alleging defamation per se, invasion of privacy, and intentional interference with business expectancy, as a result of a negative job performance evaluation that preceded her termination. Defamation per se, or “on its face,” arises from statements falsely asserting that someone is involved in unlawful activity or is deficient in her professional abilities. In all defamation cases, a plaintiff must prove the statements were uttered to a third party. Continue reading ›

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A board member’s reporting of suspected corporate financial malfeasance to the SEC is protected from litigious retaliation by Illinois’ Citizenship Participation Act, but reporting it to shareholders is not.

Ditto Holdings, Inc. is a private shareholder-owned corporation whose sole subsidiary is Ditto Trade Inc., an online retail stock trading company. In 2013, Trade CEO and Ditto Holdings board member Paul S. allegedly discovered evidence of suspicious financial activity by Ditto’s chairman and CEO, Joseph F., including possible securities law violations. Records indicated Joseph had been diverting the company’s capital to himself personally and had spent $1.5 million for the benefit of himself and his family. Paul S. wrote to Ditto’s board revealing his concerns. After receiving a hostile response from the general counsel and another director, Paul S. reported his allegations to the Securities and Exchange Commission.

Shortly thereafter, Paul was notified the board had fired him as CEO of Trade for failing to obtain his brokerage license. After allegedly learning Joseph was attempting to have him removed from the board, Paul sent an e-mail to more than 200 Ditto shareholders, claiming to be the victim of retaliation for doing his duty as a board member. Paul was then informed he had been removed from the board by consent of the shareholders, and removed as executive vice president for his “destructive and reckless” actions. Continue reading ›

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If an Illinois employer drafts a post-employment restrictive covenant that is impermissibly overbroad, it cannot expect a court to modify it and enforce it, as a recent Third District appellate case illustrated.

Brian S. joined Deere Employees Credit Union (DECU) in 2009 as an investment advisor at its main branch in Moline, Illinois. His employment contract prohibited him from soliciting DECU’s clients or members for a two-year period following his termination. Brian resigned from DECU in 2015 and began working for a different financial services provider. He sent letters to up to 250 of his former DECU clients notifying them of his new situation.

DECU sued Brian for breach of the nonsolicitation covenants, seeking a preliminary injunction barring him from further contact with its members. Brian acknowledged his current clients included up to 17 DECU members, but argued the contract was unnecessarily broad, unenforceable as a matter of law, and could not be used to grant injunctive relief. The trial court found the covenants overly broad and unenforceable as written, but partly granted DECU’s request for injunctive relief by modifying the contract language and enjoining Smith’s contact with only those members he served while employed at DECU. Continue reading ›

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Some people claim that nothing is unique. That everything we come up with has already been done by many others and will be done again. But there’s a difference between great minds think alike and someone repeating something they’ve seen someone else do.

Copyright law exists to protect creative ventures and intellectual property. That can get tricky when it becomes difficult to draw the line between the things that constitute infringement and the things that are considered public domain. For example, an entire work, such as a song, article, or book, is eligible for copyright, but short phrases and individual words are not.

Writing software code is not much different from writing anything else. On the one hand, it requires a certain amount of creativity and, although two people may write code that does essentially the same thing, they will not write it in exactly the same way. On the other hand, there are only so many ways they can tell a computer how to do something. If some of those ways are protected by copyrights, it severely limits the options coders have for trying to do the same or similar things.

This debate is at the heart of a lawsuit Oracle Corporation filed against Google for allegedly stealing code written by Java and using it in Google’s Android. In its complaint, Oracle alleges purchasing Java was the most significant and lucrative purchase it has made, and that everything produced by that company should therefore be protected as Oracle’s property. Because Google has made an estimated $21 billion in profit from Android since it launched in 2007, Oracle is claiming $9 billion of that money. Continue reading ›

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A plaintiff seeking to recover on a breach of fiduciary duty claim against a business partner must be able to show more than just evidence of his partner’s bad conduct, but must also demonstrate that he suffered measurable damages as a result of the conduct.

For almost a decade, JAP, Inc. and Today’s Sushi Corp. jointly owned and operated trendy Chicago eatery Sushi Wabi, cashing in on the burgeoning national sushi craze. In 1998, Angelo G., owner of JAP, and Angela L. and Susan T., owners of Today’s Sushi, entered a limited partnership agreement to open the Randolph Street restaurant, with each entity owning about half of the enterprise. The venture capitalized on Angela and Susan’s experience operating sushi restaurants, with JAP providing most of the investment funds. The partnership agreement gave each partner full power of management and control of the operation of the business by unanimous consent. Angelo’s brother Franco was made manager of Sushi Wabi and put in charge of daily decision-making, with Angelo to be consulted on “major” decisions. Things soured when Angela and Susan attempted to remove Franco as manager. JAP brought breach of fiduciary duty and conversion claims against the pair, and filed for an accounting and dissolution of the partnership. In its complaint, JAP alleged 19 separate bases for breach of fiduciary duty and demanded consequential and punitive damages. Continue reading ›

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In the court system of the United States, it is possible for plaintiffs who have not suffered a measurable injury but have suffered an intangible injury such as invasion of privacy or loss to reputation or humiliation to file a lawsuit against another party. This means even if the plaintiff has not been physically injured or suffered any financial loss, they might still have an opportunity to make someone pay up for violating the law.

Most laws come with statutory provisions in which the statutory penalty for breaking the law is often written into the legislature itself. Sometimes it’s a defined number and other times it’s a range. Either way, they provide an opportunity for plaintiffs who have not lost anything tangible to file claims.

Businesses lately have been complaining about a slew of consumer class action lawsuits that focus on what they claim are mere technical violations of the law. One such case is that of Thomas Robins against Spokeo Inc., a people search engine. Robins alleged Spokeo had violated the Fair Credit Reporting Act (FCRA) by posting that he was employed, wealthy, and married, when in fact he was single and struggling to find work. Continue reading ›

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Americans love our convenience, but it often comes with a cost, even when we’re not aware of it. One example of the ways in which food manufacturers have catered to this desire for convenience is by selling pre-grated parmesan cheese so that it’s ready to go straight from the grocery store into a recipe or on top of pasta. It makes shopping for and using parmesan cheese much easier, but there’s a catch. There’s no way of knowing if what you’re eating is really cheese.

In 2012 the FDA found evidence that Castle Cheese Inc. was including non-dairy substances in its Parmesan cheese products. The FDA issued stern warnings, including accusations that Castle’s products marketed as Parmesan and romano were actually a mixture of various cheeses and other ingredients.

Castle, which insists that their consumers were never harmed and that it was merely a mislabeling issue, eventually went bankrupt. but the allegations against Castle have spread to other manufacturers of grated parmesan cheese.

One of the most common additives to grated parmesan is cellulose, an anti-clumping agent made from wood chips. Acceptable levels of cellulose range from 2-4%, but the FDA’s investigations have found much higher concentrations in various food products. Continue reading ›

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If you need to ask whether or not you can do a certain thing, the answer is probably no. When Thomas Dotoli and his wife drafted a contract to sell their companies to their daughter-in-law, Cheryl, they included a clause that allowed a court to modify the non-compete agreement if the court deemed it to be too broad. But not all courts have the authority to rewrite contracts.

Non-compete agreements are pretty standard in most business contracts. They’re designed to protect the business interests of both parties, ideally without infringing too much on the other party’s legitimate business interests.

In the contract in question, Cheryl, as the owner and operator of Associated Beverage Systems of the Carolinas, was prevented from doing business in either North Carolina or South Carolina for a period of five years after purchasing the companies from the Dotolis for $10,000. The contract provided that a court could revise the terms of the agreement if it found them to be unreasonable.

When Associated Beverage began conducting business in both North and South Carolina, the Dotolis sued Cheryl, her company, and Loudine, their son and Cheryl’s husband, for tortious interference as well as deceptive and unfair practices. Loudine was charged with breach of contract. Continue reading ›

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It’s almost always newsworthy when a friend or family member of a wealthy celebrity publishes a “tell all” book or files a lawsuit against the celebrity in question or against other people close to the celebrity. But all this gossip has to be taken with a grain of salt, especially if the person making the accusations never bothered to make them until after they were cut off from the celebrity. Money is a powerful motivator for a lot of people and it’s common for some to lash out after having been cut off.

The 92-year-old Sumner M. Redstone, a media mogul with a $42 billion media empire that includes CBS and Viacom, has been accused by his ex-girlfriend and long-time friend of losing his mental competence. The friend is 51-year-old Manuela Herzer, who first started dating Redstone back in 2000 when he was in the process of getting divorced from his first wife. Redstone asked Herzer to marry him, and although she turned him down, the two remained good friends and Herzer has reportedly been active in Redstone’s entertainment companies.

Herzer received gifts, real estate money, and tens of millions of dollars in cash from Redstone. She even moved into his $20 million mansion at his request, and he gave her the mansion in his will, along with an addition $50 million. Herzer helped make healthcare decisions for Redstone, along with Sydney Holland, whom he was dating at the time. Holland was ejected from the home in 2015 after admitting to having been unfaithful, at which point Herzer said she took over the management of Redstone’s healthcare.

That all ended suddenly last October when Herzer was ejected from both the mansion and Redstone’s will in one fell swoop. Continue reading ›

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Sports teams often make more money from the merchandise and apparel they sell, stamped with the team name and logo, than they do tickets to games. As a result, it makes sense that they have a vested interest in protecting the right to put their name and logo on clothing and merchandise, but a patent on the name of a state seems to many people to be a step too far.

The University of Kentucky, home to the basketball team, the Wildcats, is claiming that it purchased the patent for putting “Kentucky” on any clothing back in 1997. So when Colin Fultz filed for a trademark of his business’s name, “Kentucky Mist Moonshine,” he received a cease and desist letter from the University of Kentucky. The University says it does not object to the name of the whiskey, only to the word “Kentucky” being put on promotional hats, T-shirts, etc.

Fultz’s business is a distillery that makes and sells fruit-infused whiskey and he has had to fight for his business since it was still just a concept. His hometown of Whitesburg was a dry town up until 2007, so when Fultz started taking the first steps to getting his business up and running a few years ago, the City Council needed some convincing that the town was ready, not just for alcohol, but for a distillery. Fultz thought the biggest hurdle was over when the City Council just barely voted to let him have his distillery, but that was just the beginning.

The athletic official for the University of Kentucky, Mr. Schlafer, said they intended for the letter to open up negotiations between Fultz and the University. He insists the local college, which makes about $123 million every year from the athletic department, has a right to protect the Wildcat brand. Continue reading ›

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