Week Ending 3/14/14: The Employers Strike Back

Alan Schorr’s Employment Case of The Week ending March 14, 2014

My apologies to my blog readers as my two week vacation evolved into a month-long sabbatical from blog writing. I am back in the saddle and ready to write again. But a lot of important employment news has occurred during the sabbatical, and rather than concentrate on one Case of the Week, I will endeavor to catch everyone up and resume individual case reviews next week. My focus this week is on three separate counter-attacks lodged by employers, which, after having been caught engaging in bad acts, have taken action against the employees who defeated them.

J-M Manufacturing Co, Inc. v. Phillips & Cohen, LLP, MID-L-0792-14 (Middlesex Co., Feb. 10, 2014)

In a case that is ominous to law firms representing whistleblowers, a company who has been on the losing end of several lawsuits brought by the False Claims Act specialist law firm Phillips & Cohen, LLP have sued the whistleblower and the law firm in New Jersey Court, alleging that they stole hundreds of documents which were used in the litigation against them. Just a few months ago, a federal jury in California found J-M violated the False Claims Act by selling PVC pipe of questionable quality to government entities for water and sewage systems.

John Hendrix is the relator in a series of False Claims Act cases. In January, one of those cases settled with J-M’s parent company, Formosa Plastics, for $22.5 million, of which Hendrix will reportedly receive between 15-25 percent of the recovery. J-M filed nine counts, including conspiracy and racketeering against Hendrix and his law firm. We will be following this case.

State v. Saavedra, 433 N.J. Super. 501, (N.J. App. Div., December 2013)

The case against Phillips & Cohen will be strongly influenced by the Court’s continuing rulings in State v. Saavedra. (See my previous blog article on this case here). In that case, the Appellate Division, in a 2-1 decision with strong dissent, held that a whistleblower who had accessed and copied documents could be charged with criminal offenses of second degree official misconduct and third degree theft of movable property. The Supreme Court, this week, granted Ms. Saavedra’s Petition for Certification, which was necessary because this was an interlocutory appeal to begin with. The Court also stayed the criminal proceedings pending appeal. With whistleblowers like Mr. Hendrix and Ms. Saavedra enduring greater and more frequent counter-attacks from their employers, we will be closely monitoring the Supreme Court’s rulings in this case.

Gulliver Schools, Inc. v. Snay, 2014 Fla. App. LEXIS 2595 (Ct. Of Appeals Florida, Feb. 26, 2014)

Patrick Snay settled an age discrimination and retaliation lawsuit against his employer, Gulliver Schools, Inc. for $150,000. The settlement agreement contained a confidentiality provision which prohibited him from publicizing the fact that the case had settled or disclosing the amount. Violation of the agreement would require Mr. Snay to refund $80,000 of the settlement. Only four days after the settlement agreement was signed, Snay’s “college-age” daughter, who apparently is not studying brain surgery, posted on her Facebook site:

“Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

The Facebook message went out to at least Ms. Snay’s 1200 Facebook friends, many of whom attend Gulliver Schools.

The School refused to pay the $80,000.00. Snay moved to enforce the agreement, and the lower court enforced the agreement. The Florida Appellate Court, however, ruled that the clawback provision was enforceable. In a footnote, the Appellate Court confirmed that the daughter did not go to Europe that summer.

The take away from these cases is that employers are mad as hell, and increasingly, they are not gonna take it any more. Law firms and clients need to be aware that defendants in employment cases may very well bite back and need to carefully avoid providing such opportunities. The other important lesson is that discussing cases on Facebook and other social media is the dumbest thing a client (or attorney) can do. We make sure that each of our clients signs an agreement that they will not discuss the case on social media. We actually prefer that clients drastically restrict their use of social media during lawsuits, and recommend the same to others who are similarly situated.

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