Category: Litigation

Why Selecting the Right Company Swag is so Important for Your Business and Brand

I recently went to use a pen that I got at a conference from a law firm service provider. It’s my favorite pen. It writes perfectly, it never leaks, it has the perfect consistency and it is a bright color, so I can always find it in my purse.

On the flip side, I have another pen, from a top 10 Am Law ranked law firm with profits of more than $3 million per partner per year that ran out of ink the second time I used it. It’s flimsy and plastic. I was surprised that a firm of this caliber would give out hundreds of these pens to their clients, recruits and prospects.

It’s incredibly important that each touchpoint your target audience has with your brand is truly reflective of your brand.

That means even the pens you hand out at a conference (when we go back to conferences), the coffee you serve, the way the bathrooms look and the tidiness of the reception areas (including ensuring the plants in the reception area are healthy looking) need to be well thought out.

And the kind of swag (or promotional items or tchotchkes as I prefer to call them) you choose to represent your company is much more important than you may think. It’s part of your outward facing brand and can be an easy way to gain positive visibility for your organization.

Let me give you an example. I was a guest in a summer share a few years ago in the Hamptons. One of my housemates walked into the house wearing a baseball hat that said “MoFo.” I said, “do you know what that stands for?” and you can guess yourself what he replied. I told him that MoFo was actually a global law firm. He was shocked. He said he had been given the hat by a lawyer friend of his about 10 years prior and didn’t know (or ask) what the abbreviation stood for. He just assumed it stood for – well you know what.

This is a great example of how the wording and branding on a swag item can make all the difference.

Once I told him MoFo was the name of a major law firm, the hat lost its “cool” quotient to him. Later that summer I saw his once beloved hat thrown on a heap of beach gear in the basement. The MoFo hat had been demoted.

Company SWAG is the abbreviation of “Stuff We All Get” (I personally didn’t know that until I researched this article). It is free stuff and giveaways that employers give out to their current employees, alumni, recruits and clients.

As with so many things in marketing, one size doesn’t fit all, so it’s important to have multiple promotional pieces from which you can choose. Many firms keep closets full of promotional items and have an online catalog to make it easy for employees to choose items when they need them.

It should go without saying that your company branding should appear on every promotional piece.

So, how do you choose awesome company swag that your clients and other target audiences actually want?

There’s a huge difference between being thoughtful with your company swag items and just putting your company logo on the cheapest or coolest items you can find. The benefits of doing the former go way beyond what you might think.

Investing in high-quality swag has the potential to earn you extra brand impressions, build awareness, cultivate strong company culture, and build good rapport between your brand and your prospects.

  • Make sure it’s well-made: The number one rule when considering company swag is making sure it’s high-quality. While the initial excitement of a new or free thing might last a week or so, if it’s not something of true value, people will be over it just as quickly. When you take the time to pick out swag items that are worthwhile, people are going to use it far beyond the first week, giving your swag more longevity and the chance to garner more impressions. If it falls apart, so does your reputation.

  • Think outside of the office. Find something that is useful even outside of the office – it doesn’t always need to be a pen or a flash drive!

  • But sometimes the tried and true works. I have an umbrella from Paul, Weiss, Rifkind, Wharton & Garrison given to me for Employee Appreciation Day many years ago when I worked there. This is the Mercedes Benz of umbrellas. It still works after two decades! It even has a cool wind technology that doesn’t allow it to bend during crazy storms. I carry it with me whenever there’s a bad rainstorm. We always had high-end umbrellas stowed away as giveaway items at several law firms when it rained for client events. Don’t underestimate the power of a good quality basic like an umbrella or a tote bag. Just put your logo on it so you get free publicity. You want your brand to be associated with high-quality items, because you are a high-quality company.

  • Keep your company culture at the forefront when choosing swag items. This one really doesn’t need an explanation. Make sure the items you select truly represent you and your organization.

  • Consider thoughtful details. When planning what kind of items you want to order for company swag, think about which items you can use to relay small details about your company and/or its culture.

  • Make sure your logo/brand name is on each item – and that it’s not too big and not too small. Remember promotional items are walking advertisements for your organization. I still get stopped on the street sometimes when I wear a tote bag from one of my prior law firms – someone will inevitably ask me if I am a lawyer and it’s a nice starting conversation point. I am not a huge fan of doing special logos for an anniversary or special event – I think it’s smarter from a brand and cost perspective to stick to the basics, especially if you are not a household name.

  • Extra points if you can work yourself (or your clients) into the item. Intellectual property law firm Amster Rothstein & Ebenstein has one of the coolest promotional items I’ve seen in years. It’s a metal straw – but it’s not because it’s trendy as a metal straw – it’s because they helped the client obtain the patent for that straw. They actually have the patent number on the item – which is super cool too. So, if you did something novel like this – by all means please use it as your promotional item. And if your clients create items that you can use – even better. Why not support them? It helps to build stronger relationships. One of my prior firms had a program where they would source promotional items and startups from small businesses the firm represented. What a great way to support small businesses and your clients!

Taking the time to pick out the right swag will enhance your brand and reputation, promote your company culture and promote positive buzz your organization.

I’d love to hear more about the promotional items your firm is using.

Article By Stefanie M. Marrone of Stefanie Marrone Consulting

For more legal marketing news, click here to visit the National Law Review.

Copyright © 2022, Stefanie M. Marrone. All Rights Reserved.

The Supreme Court Is Poised to Weigh in on a False Claims Act Circuit Split

Three pending petitions for writ of certiorari have asked the U.S. Supreme Court to resolve a split among the federal courts of appeals as to the pleading standard for False Claims Act (“FCA”) whistleblower claims.

The FCA creates a right of action whereby either the government or private individuals can bring lawsuits against actors who have defrauded the government. 31 U.S.C. §§ 3729 et seq. Under the FCA, a private citizen can act as a “relator” and bring an action on behalf of the government in what is known as a qui tam suit. The government can elect to intervene, which means participate, in the suit; if it does not, the relator can continue to litigate the case without the direct participation of the government. 31 U.S.C. § 3730. Private individuals can receive a portion of the action’s proceeds or settlement amount. 31 U.S.C. § 3730(d).

The petitions ask the Court to clarify the level of particularity required under Federal Rule of Civil Procedure 9(b) (“Rule 9(b)”) to plead a claim under the FCA. Rule 9(b) requires plaintiffs alleging “fraud or mistake” to “state with particularity the circumstances constituting fraud or mistake.”

Johnson v. Bethany Hospice and Palliative Care LLC, Case No. 21-462

In their petition for a writ of certiorari, the petitioners in Johnson asked the Supreme Court to take up the issue of whether Rule 9(b) requires FCA plaintiffs “who plead a fraudulent scheme with particularity to also plead specific details of false claims.” The Eleventh Circuit earlier affirmed the district court’s dismissal of an FCA claim based on the plaintiffs’ failure to plead “specific details about the submission of an actual false claim” to the government. Estate of Helmly v. Bethany Hospice & Palliative Care of Coastal Georgia, LLC, 853 F. App’x 496, 502-03 (11th Cir. 2021).

In particular, the relators alleged that several doctors purchased ownership interests in Bethany Hospice and Palliative Care, LLC (“Bethany Hospice”) and were allocated kickbacks for patient referrals through a combination of salary, dividends, and/or bonus payments.  Id. at 498. Among other allegations, the complaint alleged that both the relators had access to Bethany Hospice’s billing systems, and, based on their review of those systems and conversations with other employees, were able to confirm that Bethany Hospital submitted false claims for Medicare and Medicaid reimbursement to the government.  Id. at 502.

The Eleventh Circuit held that the allegations were “insufficient” under Rule 9(b)’s heightened pleading standard for fraud cases.  Id. Even though the relators alleged direct knowledge of Bethany Hospice’s billing and patient records, their failure to provide “specific details” regarding the dates of the claims, the frequency with which Bethany Hospice submitted those claims, the amounts of the claims, or the patients whose treatment formed the basis of the claims defeated their FCA claim.  Id. In addition, the relators did not personally participate or directly witness the submission of any false claims.  Id. The Eleventh Circuit also found unpersuasive the relators’ argument that Bethany Hospice derived nearly all its business from Medicare patients, therefore making it plausible that it had submitted false claims to the government.  Id. “Whether a defendant bills the government for some or most of its services,” the Eleventh Circuit stated, “the burden remains on a relator alleging the submission of a false claim to allege specific details about false claims to establish the indicia of reliability necessary under Rule 9(b).”  Id. (internal quotation marks omitted). Because the relators did not do so here, the Eleventh Circuit affirmed the dismissal of the case.

United States ex rel. Owsley v. Fazzi Associates, Inc., Case No. 21-936

The Sixth Circuit took a similarly hardline approach in United States ex rel. Owsley v. Fazzi Associates, Inc., 16 F.4th 192 (6th Cir. 2021), ruling in favor of a strict interpretation of Rule 9(b).  The petition for a writ of certiorari in Owsley asks the Court to take up the same question as in Johnson.

In Owsley, the relator alleged that her employer used fraudulently altered data to make its patient populations seem sicker than they actually were in order to increase Medicare payments received from the government.  Id. at 195. The complaint “describe[d] in detail, a fraudulent scheme,” and alleged “personal knowledge of the billing practices employed in the fraudulent scheme.”  Id. at 196 (internal quotation marks omitted). But the Sixth Circuit ruled that these allegations were not enough under Rule 9(b). Instead, to bring a viable FCA claim, a relator’s complaint must identify “at least one false claim with specificity.”  Id. (internal quotation marks omitted). A relator can do that in one of two ways: first, by identifying a representative claim actually submitted to the government; or second, by alleging facts “based on personal knowledge of billing practices” that support a strong inference that the defendant submitted “particular identified claims” to the government.  Id. (emphasis in original). Here, though the relator alleged specific instances of fraudulent data – such as upcoding a patient with a leg ulcer to include a malignant cancer diagnosis – she did not identify particular claims submitted to the government.  Id. at 197. “[T]he touchstone is whether the complaint provides the defendant with notice of a specific representative claim that the plaintiff thinks was fraudulent.”  Id. The Owsley relator, the court held, failed to meet that critical touchstone.

Molina Healthcare v. Prose, Case No. 21-1145

The Seventh Circuit adopted a more flexible pleading standard in United States v. Molina Healthcare of Illinois, Inc., 17 F.4th 732 (7th Cir. 2021). As in Johnson and Owsley, the petition for a writ of certiorari asks the Court to weigh in on the Rule 9(b) standard under the FCA. It also presents an additional question about the requirements for an FCA claim under the implied false certification theory.

In Molina Healthcare, the relator brought an FCA claim against Molina Healthcare (“Molina”) for violating certain requirements of its Medicaid contract. The relator alleged that Molina, which had previously subcontracted with another entity for the provision of certain nursing home services, continued to collect payment for those services from the government even though it no longer provided them. Molina Healthcare, 17 F.4th at 736. Molina Healthcare received fixed payments from the government for different categories of patients. It received the highest per capita payment for patients in nursing facilities: $3,180.30.  Id. at 737-38. The relator alleged that Molina Healthcare knowingly continued to collect this rate from the government when it no longer provided a key service to nursing home patients.  Id.

The relator brought an FCA claim against Molina based on three theories of liability: (1) factual falsity (i.e., presenting a facially false claim to the government); (2) fraud in the inducement (i.e., misrepresenting compliance with a payment condition “in order to induce the government to enter the contract”); and (3) implied false certification (i.e., presenting a false claim with the “omission of key facts” instead of “affirmative misrepresentations”).  Id. at 740-741.

The Seventh Circuit held that the relator’s allegations satisfied Rule 9(b)’s pleading requirement under all three theories. First, as to factual falsity, the Court found that the relator provided sufficient information as to the “when, where, how, and to whom” Molina made the allegedly false representations.  Id. at 741. Though the relator did not have access to the defendant’s files, the information he provided “support[ed] the inference” that Molina had submitted false claims to the government.  Id. Second, as to fraud in the inducement, the Seventh Circuit found that the relator’s “precise allegations” regarding “the beneficiaries, the time period, the mechanism for fraud, and the financial consequences” again satisfied Rule 9(b)’s standard.  Id. at 741. The complaint also included details about Molina’s chief operating officer’s statements that indicated that Molina “never intended to perform the promised act that induced the government to enter the contract.”  Id. at 741-42.  Third, as to the implied false certification theory, the court found that the plaintiff adequately alleged that Molina knowingly omitted key material facts while submitting claims to the government.  Id. at 743-44.

The Supreme Court Invites Comment from the Solicitor General

Facing what appears to be a major circuit split, the Supreme Court invited the Solicitor General to file a brief “expressing the views of the United States” in Johnson in January 2022 and in Owsley in May 2022.

The Supreme Court invites the Solicitor General to comment on only a handful of the approximately 7,000 to 8,000 petitions for writ of certiorari that the Court receives in a year. In the 2021 Term, for example, the Solicitor General filed what it calls a “Petition Stage Amicus Brief” in only 19 cases. Four Justices must vote to issue an invitation to the Solicitor General.

The Solicitor General’s view on whether the Court should grant certiorari has often been extremely influential. In the 2007 Term, for example, the Court denied certiorari in every case in which the Solicitor General recommended that approach. By contrast, it granted certiorari in 11 out of the 12 cases in which the Solicitor General recommended a grant. More recent data confirm that the Solicitor General’s recommendations as to whether the Court should grant certiorari remain highly influential. One study found that between May 2016 and May 2017, the Supreme Court followed the Solicitor General’s recommended approach in 23 cases (85%). At the same time, even the act of requesting the views of the Solicitor General dramatically increases the chances that the Court will take up a case. For example, between the 1998 Term and 2004 Term, one study found that the Court was 37 times more likely to grant certiorari in cases where it had invited the Solicitor General to file an amicus brief.

The Solicitor General Urges the Court to Decline Review

On May 24, 2022, the Solicitor General filed its brief in Johnson; it has yet to comment on Owsley. The Solicitor General’s amicus brief in Johnson urges the Court to deny certiorari. The Solicitor General notes that certiorari might be warranted if the courts of appeals applied a rigid, per se rule that required relators to plead “specific details of false claims.” But instead, the brief argues that the courts of appeals have “largely converged” on an approach to FCA pleading requirements that allows relators “either to identify specific false claims or to plead other sufficiently reliable indicia” to support a “strong inference” that the defendant submitted false claims to the government. According to the Solicitor General, the “divergent outcomes” among the circuit courts are merely the result of those courts’ application of a “fact-intensive standard” to various distinct allegations.

The petitioners in Johnson filed a supplemental brief in response to the Solicitor General’s views. They argue that the Solicitor General misinterpreted the Eleventh Circuit’s pleading standard, which effectively requires a relator to allege specific details about false claims to survive a motion to dismiss. In other words, the petitioners argue that in the Eleventh Circuit, the Solicitor General’s “purported” rule that a relator can either allege details about specific false claims or identify reliable indica that false claims were presented are “one and the same.”

Though the Court did not invite the Solicitor General to comment in Molina Healthcare, the petitioners in that case also filed a supplemental brief in response to the Solicitor General’s amicus in Johnson. “Everyone but the Solicitor General agrees that the circuits are hopelessly divided over whether Rule 9(b) requires a relator to plead details of false claims,” the brief argues. The brief notes that the Third, Fifth, Seventh, Ninth, Tenth, and D.C. Circuits do not require plaintiffs to plead specific details of actual false claims; by contrast, the First, Second, Fourth, Sixth, Eighth, and Eleventh Circuits require relators to plead specific details. Accordingly, the brief urges the Supreme Court to resolve the “widely acknowledged circuit split” over Rule 9(b)’s pleading standards.

The Solicitor General has a history of urging the Court to reject certiorari in FCA cases. According to the petitioners’ supplemental brief in Molina Healthcare, since the 1996 Term, the Solicitor General has recommended against review in eleven out of the twelve FCA cases in which the Court invited the Solicitor General’s views. Still, the Court granted certiorari in three of the cases in which the Solicitor General recommended against review.

Given the Supreme Court’s apparent interest in the FCA pleading standard – as evidenced by its calls for the Solicitor General’s views in Johnson and Owsley – there is a chance that it will grant certiorari in at least one of the three cases pending before it. Depending on when the Solicitor General weighs in, the Court may decide to grant certiorari in the fall of 2022.

Any Supreme Court decision that clarifies the pleading standard for FCA cases will likely affect a relator’s ability to successfully litigate qui tam actions in which the government does not intervene more than in cases in which the government does intervene. When a relator files a qui tam action, the government investigates the alleged fraud. If it intervenes in that action, it can file a complaint to include evidence it has discovered in that investigation, allowing it to meet the more stringent version of the Rule 9(b) pleading standard. Relators, however, often do not have access to the same evidence that the government does, such as specific claims data, making it far harder for a relator to meet the more stringent version of pleading standard.

Until the Supreme Court decides to weigh in, qui tam relators will continue to have an easier time satisfying the requirements of Rule 9(b) in those circuits with relaxed pleading standards. In the meantime, and whether the Court takes one of these petitions or not, any FCA whistleblower should seek legal counsel to help her identify the type of factual information that would meet the pleading requirements of the courts that apply a strict pleading requirement.

Article By Kayla Morin of Katz Banks Kumin LLP

For more litigation legal news, click here to visit the National Law Review.

Katz Banks Kumin LLP Copyright ©

How To Help a Jury Understand Complex Litigation

We hear this quite a bit from our clients. An attorney, when introducing us to his pending complex litigation matter, tells us up front, “This is a complicated case.” It’s code for, “I don’t think jurors will understand this case.”

We hear it again in opening statements: “This is a complicated case.” So now, the attorney knows it’s a complicated case; the consultants know it’s a complicated case; the jurors know it’s a complicated case. Great. What now?

Here are a few ideas to help you connect your complex litigation to the jurors and make them more comfortable hearing it.

Change the Question

Instead of asking, “How can I make jurors understand my complex case?”, how about asking, “How can I simplify my case for the jurors (and the judge and the witnesses)?” This basic reframing can change your focus—instead of concentrating on the complexity, you and your team begin to think about simplification. There’s a big difference.

Don’t Tell the Jury It’s a Complicated Case

When you tell a juror the case is complicated, they hear one of two things: “They think I’m too stupid to understand this” or “This is going to be way above my head.” The first can cause them to feel offended and the second tends to stop them from listening. Finding ways to explain the unfamiliar in familiar terms helps them understand the concepts underlying your case. Characterizing the case does no good for anyone.

Tell the Jury a Story

 

 

 

Try thinking about your case as a story: What tale do you want to tell? Or think of it this way: If someone at a dinner party asked about your case, what would your side of the story sound like?

We all think in stories, especially from the jury box. Jurors want to know what happened between these opposing parties that landed them in court, not a list of evidence and intricate facts. Instead, tell a story that answers jurors’ questions about motives for the lawsuit and the significance of your case, which should (again) simplify the details. Talking in stories makes your complex litigation more jury-friendly.

There’s a saying that goes, “What you focus on expands.” Ultimately, the key to helping jurors understand your complicated case lies in focusing not on its complexity, but on its simplicity.

Article By Robert Gerchen of IMS Consulting & Expert Services

For more litigation legal news, click here to visit the National Law Review.

© Copyright 2002-2022 IMS Consulting & Expert Services, All Rights Reserved.

Supreme Court’s Decision In Famous Hale & Norcross Mining Case

Having read Professor Stephen Bainbridge‘s post about the origins of the judicial doctrine that directors must act on an informed basis, I passed along a reference to the California Supreme Court’s in Fox v. Hale & Norcross Silver Mining Co.,  108 Cal. 369, 41 P. 308 (1895).   The Hale and Norcross mine was a famous silver and gold mine in Nevada’s Comstock mining district.  Samuel Clemens (aka Mark Twain), who had worked in Virginia City, Nevada, even bought shares in the mine on margin, as he related in Chapter 15 of his autobiography:

“One day I got a tip from Mr. Camp, a bold man who was always making big fortunes in ingenious speculations and losing them again in the course of six months by other speculative ingenuities. Camp told me to buy some shares in the Hale and Norcross. I bought fifty shares at three hundred dollars a share. I bought on a margin, and put up twenty per cent. It exhausted my funds. I wrote Orion [his brother and the first and only Secretary of the Nevada Territory] and offered him half, and asked him to send his share of the money. I waited and waited. He wrote and said he was going to attend to it. The stock went along up pretty briskly. It went higher and higher. It reached a thousand dollars a share. It climbed to two thousand, then to three thousand; then to twice that figure. The money did not come, but I was not disturbed. By and by that stock took a turn and began to gallop down. Then I wrote urgently. Orion answered that he had sent the money long ago–said he had sent it to the Occidental Hotel. I inquired for it. They said it was not there. To cut a long story short, that stock went on down until it fell below the price I had paid for it. Then it began to eat up the margin, and when at last I got out I was very badly crippled.”

Samuel Clemens disappointing investment predated by a number of years the litigation that resulted in the California Supreme Court’s opinion.

The Hale and Norcross mine was located in Nevada, but the corporation that owned it was incorporated in California.  That is why the shareholders sued the directors in the Golden, rather than the Silver, state.  The Supreme Court’s decision was big news.  The day after the decision was issued, The San Francisco Call published this lengthy article that not only described the case, but also published the decision itself and a drawing of the plaintiff, M.W. Fox.

Article By Keith Paul Bishop of Allen Matkins Leck Gamble Mallory & Natsis LLP

For more Supreme Court and litigation legal news, click here to visit the National Law Review.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP

Unfashionably Late: Seventh Circuit Rejects Misappropriation Claim Premised On Prototype Created Eleven Years Prior

The Seventh Circuit recently affirmed summary judgment in favor of a former employee and his new employer on claims for misappropriation of trade secrets relating to a prototype of an actuator created eleven years prior, holding that the inference that the defendant used his knowledge of the prototype more than a decade later was “barely conceivable” and “exceptionally unreasonable.” REXA, Inc. v. Chester, — F.4th —, 2022 WL 2981167, at *6 (7th Cir. 2022) (internal quotation marks omitted).

In 2002, Mark Chester, an engineer at Koso America, Inc. (“Koso”), participated in a project to create a new valve for a hydraulic actuator. An actuator is a component of a machine that produces motion. While the project was unsuccessful, it did produce an experimental prototype of another actuator. Koso shelved the experimental prototype due to the improbability of commercial success. The following year, Chester left Koso.

After more than a decade had passed since Chester worked on the 2002 project for Koso, Chester and his new employer, MEA Inc. (“MEA”), built a new actuator prototype, later known as the Hawk. Chester and MEA filed a related patent application, which was approved in part. REXA, Inc. (“REXA”), a company affiliated with Koso, brought suit against Chester and MEA for misappropriation of trade secrets under the Illinois Trade Secrets Act (“ITSA”), among other claims. REXA argued that Chester and MEA’s actuator incorporated and disclosed confidential designs contained within the prototype Koso developed in 2002. The district court granted summary judgment in favor of Chester and MEA. REXA appealed.

On appeal, the Seventh Circuit affirmed summary judgment in favor of defendants on the misappropriation claims. First, the Seventh Circuit agreed that REXA failed to identify a concrete trade secret, as the Court was unable to determine which aspects of the 2002 designs are known to the trade, and which are not. The Court explained that several aspects of the 2002 actuator prototype are widely known in the industry, which by definition, is not sufficiently secret to qualify for protection under the ITSA.

Second, the Seventh Circuit held that even if REXA had identified a trade secret, REXA had not established that defendants misappropriated trade secrets when MEA filed its patent application or developed the Hawk actuator. With respect to MEA’s patent application, the Court explained that REXA’s allegations “rest on a series of untenable inferences.” Id. Indeed, eleven years had passed since Chester worked on the actuator prototype, and it was undisputed that he never saw or took any documents with him when he left Koso. Additionally, REXA did not cite any case where a court “inferred” a misappropriation of trade secrets despite a lack of evidence that the defendant seized or possessed documents, nor could the Seventh Circuit find any such case. As such, the Court found the lack of evidence, coupled with the eleven-year gap, “renders the inferences that REXA asks us to draw exceptionally unreasonable.” Id.

Regarding the design of MEA’s Hawk actuator, the Seventh Circuit held that the 2002 prototype did not include features of the patent application that made the Hawk both a non-obvious improvement over prior art and commercially valuable. Thus, Chester and MEA could not have misappropriated trade secrets contained within the 2002 prototype.

REXA serves as an important reminder that trade secret claimants must identify with specificity the elements that distinguish the alleged trade secret from general knowledge in the field or public domain. Additionally, REXA confirms that, at least in the Seventh Circuit, courts are hesitant to draw inferences supporting misappropriation claims without any evidence the defendant seized or possessed documents from the plaintiff, particularly if a significant period of time passes before the alleged misappropriation occurs.

Article By Mikela T. Sutrina and Jenna G. Crawford of Sheppard, Mullin, Richter & Hampton LLP

For more intellectual property legal news, click here to visit the National Law Review.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.

THE NEXT TCPA MEGA-TRIAL APPEARS TO BE SET: Coldwell Banker and Realogy Appear to Be Headed to the Jury On $225MM TCPA Claim

As I reported a couple months back, a Court in California certified a TCPA class action against brokerage giant Realogy related to calls made by Coldwell Banker agents, amongst others.

The classes have enough members to put at least $225MM at stake in the case (and it could be a lot more.)

Well just last Thursday the Court just denied Reaolgy’s request to seek reconsideration of the certification ruling. So Realogy appears to be stuck in a certified class action, which is barreling toward trial.

In fact, the Court just issued an order setting a pretrial conference for November 10, 2022, and trial is set for November 28, 2022!

In the meantime, the Court also just denied motions challenging the Plaintiff’s expert Anya Verkhovskaya, meaning that she’ll get to testify at trial.

TCPAWorld hasn’t seen a true mega trial–i.e. a trial of a certified class action with nine (or ten) figure exposure in some time. Will be extremely interesting to see where this goes.

And while Realogy has added new counsel recently, I don’t see any true Czar-level “monster trial lawyer” types on their side just yet. (Maybe I’m missing it.)

Definitely don’t want to walk into this unless you’re loaded for bear folks.

Anyway, I’ll keep an eye on this one. I suspect it will settle for some ridiculous number. But if not I may send Kiera down to take notes on the trial. We’ll see.

Article By Eric J. Troutman of Troutman Firm

For more communications, media, and internet legal news, click here to visit the National Law Review.

© 2022 Troutman Firm

August 2022 Legal Industry News Updates: Law Firm Hiring and Expansion, Industry Awards and Recognition, and Women in the Legal Field

Welcome back to another edition of the National Law Review’s legal news roundup! We hope you remain safe, healthy, and cool as the summer winds down. Read on below for the latest in law firm hiring and expansion, industry awards, and a spotlight on women in the legal industry!

Additionally, be sure to check out the latest episode of our podcast, Legal News Reach, featuring Chris Fritsch, founder of CLIENTSFirst Consulting!

Law Firm News and Updates

Sunstein LLP has added attorneys Shane Hunter and T.J. Clark as partners. Previously the founders of Hunter Clark PLLC, an intellectual property law firm, both attorneys focus their practice in this field: Mr. Hunter assists individuals in developing billion-dollar companies and helps to protect their intellectual property. Mr. Clark’s practice focuses on patent prosecution and intellectual property portfolio counseling for software and web-based business methods, biomedical devices, and semiconductor processing.

“Shane and T.J. bring impressive backgrounds as engineers and skills as attorneys that greatly complement our firm’s focus on helping technology clients leverage their diverse IP portfolios,” said Chair of the Sunstein Patent Group, Kathryn Noll. “They are a great addition to our team.”

Insurance attorney Graham Pulvere has joined Wilson Elser’s Birmingham office as a partner. Mr. Pulvere’s practice focuses on litigating insurance coverage and bad faith actions. With experience representing clients in areas such as legal malpractice actions, bar disciplinary proceedings, and errors and omissions actions against insurance agents and brokers, he will be joining the Insurance & Reinsurance Coverage and the Professional Liability & Services practice group as well as the London Practice.

London Practice Chair David Holmes said, “Graham has significant experience working with the London market on first-party and bad faith matters and will add to our strong ability to handle complex coverage and bad faith matters not only in Alabama but also in Mississippi and Louisiana.”

Steptoe & Johnson welcomes associate Evan Janc to the business litigation practice group. Practicing in the firm’s Dallas office, Mr. Janc has experience representing clients in construction litigation, public finance, and real estate in front of Texas state agencies and government entities. Evan also analyzes and drafts construction contracts and real estate agreements.

Sidley Austin LLP added Jay Jariwala, Senior Director, Regulatory Compliance to the firm’s Food, Drug, and Medical Device Compliance and Enforcement practice. Joining the firm’s Washington, D.C. office, he previously served in the FDA’s Center for Drug Evaluation and Research, Office of Compliance, and Office of Manufacturing Quality. Mr. Jariwala brings more than 13 years of regulatory and leadership experience to Sidley.

Raj Pai, partner and global leader of Sidley’s Food, Drug, and Medical Device Compliance and Enforcement group, said, “We’re happy to welcome Jay to our growing team of former FDA officials who have world-class experience and insights. Jay’s background will strengthen our team’s ability to help clients understand, assess, and address compliance concerns effectively.”

Industry Awards and Recognition

Benjamin F. Wilson, former Chairman of Beveridge & Diamond PC, has been honored with the 2022 Environmental Achievement Award from the Environmental Law Institute. Recognized for his visionary leadership and service to local communities over the span of his entire career, Mr. Wilson has provided representation on a wide range of clients on environmental matters, both at Beveridge & Diamond and in other private practices. He has previously served in the Civil Division of the U.S. Department of Justice, and he established the African American General Counsel and Managing Partner Networks in 2012, as well as founding the Diverse Partners Network in 2008.

“Ben is a remarkable environmental lawyer whose impact reverberates so far beyond his immediate circle. An astounding number of people call him a mentor, and his lasting impacts are felt not only in the legal profession, but across diverse communities nationwide,” said Jordan Diamond, President of the Environmental Law Institute. “He spent a career championing the interplay of environmental and civil rights, and we are all better for it.”

Twelve attorneys at Clifford Law Offices have been recognized by Law Bulletin Media as Leading Lawyers. They are as follows:

According to the Leading Lawyers website, less than five percent of all lawyers licensed in each state have received this prestigious distinction. Recipients are selected based on external attorney surveys that ask which of their peers they would most likely recommend to a family member or friend.

Lawmatics has recently been ranked as a high performer in G2’s Summer 2022 Grid®️ Report for Legal Practice Management Software. G2, formerly known as G2 Crowd, is a peer-to-peer review site that collects information for various types of business software; to qualify for the Grid®️ Report in the Legal Practice Management category, the product must:

  • Manage law firm client information

  • Store relevant legal documents

  • Integrate with or provide functionality similar to legal case management solutions

  • Be designed for independent law firm use

In addition to the high overall satisfaction rating that Lawmatics boasts, the Summer 2022 report also found that 100% of Lawmatics customers rated the service 4 or 5 stars, 92% stated they were likely to recommend Lawmatics to their peers, and 90% believed their quality of support goes “above and beyond.”

Women in the Legal Field

The American Bar Association awarded five legal practitioners with the 2022 Margaret Brent Women Lawyers of Achievement Award at the ABA Annual Meeting in Chicago on August 7th. The prestigious award has been given to numerous pioneers in its more than 30-year history, including former U.S. Supreme Court Associate Justices Sandra Day O’Connor and Ruth Bader Ginsburg. This year, the recipients were health law and bioethics innovator Michele Goodwin, IP expert and radio personality Christina L. Martini, AbbVie executive Laura J. Schumacher, corporate executive and DEI leader Wendy Shiba, and Myra C. Selby, the first African-American woman to serve as Associate Justice for the Indiana Supreme Court.

“We are honored to recognize this spectacular group of women who have been trailblazers throughout their careers,” says Maureen Mulligan, chair of the ABA Commission on Women in the Profession. “They are role models for all women in the legal profession.”

Benchmark Litigation has recognized three Bradley attorneys on their 2022 Top 250 Women in Litigation List.  Birmingham’s Leigh Anne Hodge, Nashville’s Lela M. Hollabaugh, and Huntsville’s Kimberly B. Martin were all selected due to their respected positions in the legal community and overwhelmingly positive client feedback.

Ms. Hodge leads Bradley’s Litigation Practice Group and is a member of the Healthcare Practice Group, where she assists clients with matters related to insurance, medical malpractice, licensing board hearings, and product liability. Ms. Hollabaugh is a lead trial lawyer who has worked on dozens of jury and bench trials while helping infrastructure clients with land acquisition, construction, and operations. She recently co-authored an amicus curiae brief for the U.S. Supreme Court related to the Natural Gas Act and 11th Amendment immunity. Ms. Martin handles international health product liability and white-collar claims.

Bradley Chairman of the Board and Managing Partner Jonathan M. Skeeters said, “We are proud of Leigh Anne, Lela, and Kim and congratulate them on their continued recognition as top female litigators. Their inclusion on this prestigious list is well deserved.”

Varnum LLP Partner Maureen Rouse-Ayoub has been featured in Michigan Lawyer Weekly’s 2022 Class of Influential Women of Law. The list celebrates women in the legal profession who have attained excellence in their field and made significant contributions through leadership, mentorship, and volunteering. When she isn’t leading Varnum’s Labor and Employment Practice team out of the Novi office, Ms. Rouse-Ayoub speaks about labor law issues at the Michigan Chamber of Commerce and works with the State Bar of Michigan Labor and Employment Section and Michigan Chamber of Commerce Health and Human Resources Committee. In her spare time, she volunteers with Northern Michigan Adaptive Sports, where she uses special tools and instructions to teach alpine skiing to people with disabilities. Rouse-Ayoub and her fellow awardees will be celebrated at a September 23rd ceremony in Detroit, followed by a September 26th magazine profile.

Article By Chandler Ford, Crissonna Tennison, and Shelby Garrett of the The National Law Review / The National Law Forum LLC.

For more legal marketing news, click here to visit the National Law Review.

Copyright ©2022 National Law Forum, LLC

5 Ways Legal Billing Software Increases Law Firm Revenue

In any business, keeping an eye on the bottom line is essential. For law firms, this can be a challenge, as there are many ways that money can be lost throughout a case. From inefficient time-tracking to inaccurate billing, there are many potential pitfalls. However, there is one solution that can help to increase law firm revenue: legal billing software. Choosing the right legal billing software is essential for maximizing its benefits. Consider time-tracking, billing accuracy, and customer service when evaluating different packages. Take a look at solutions built specifically for the legal industry to get the most out of your investment.

3 Common Ways Law Firms Lose Money

Time Tracking Issues

Many lawyers still rely on manual methods of tracking time by using spreadsheets or notepads. This antiquated approach to timekeeping is fraught with problems, including the potential for lost billable time and revenue, vulnerability to billing disputes, and high administrative costs.

With spreadsheet or notepad timekeeping, it is easy for lawyers to forget to record their time or lose track of their records, leading to lost billable hours and ultimately lost revenue for the firm. Manual timekeeping doubles the work since someone must manually enter all data into the system.

Manually keeping track of time leaves attorneys vulnerable to billing disputes. If a client questions a lawyer’s billing records, it can be difficult for the attorney to prove that the charges are accurate without detailed and meticulous records.

Invoicing Frequency

When it comes to law firm revenue, timely billing is everything. The longer you wait to send a bill, the longer you wait to get paid. Clients can’t pay a bill they haven’t received.

Not billing promptly sends the message to your client that prompt payment is not that important to you. Sending your invoices at the end of each month helps to avoid confusion or miscommunication and ensures that you and your clients are on the same page.

Billing Bottlenecks

Getting paid by clients is a significant problem for 61% of small law firms, according to 2019 research conducted by Thomson Reuters Legal Executive Institute. Law firms that don’t provide clients with various payment options, like online payments and accepting credit card payments, are more vulnerable to decreased law firm revenue due to not getting paid on time.

What is Legal Billing Software?

Legal billing software is downloadable or cloud-based that helps lawyers accurately track their time and invoice their clients. A robust software, like Bill4Time, will have the capability to track time, LEDES billing format, create custom invoices, accept online payments, and meet state bar regulations for billing. Law firms use dedicated legal billing software to improve their bottom line by improving invoicing processes and reducing inaccurate time management and billing bottlenecks.

What Billing Software do Law Firms Use?

Lawyers are always looking for ways to be more efficient and maximize their billable hours, so they prioritize cloud-based software solutions that have integrated time tracking, easy invoice options, and a client portal for online payments.

Law firms need industry-specific features like trust & IOLTA accounting which allows lawyers to reconcile trust accounts without a secondary application. They also look for software that provides LEDES billing, the most widely used e-billing standard for law firms invoicing corporate clients.

Why Does My Law Firm Need Legal Billing Software?

As a law firm, you know that time is money. Every minute spent on administrative tasks is a minute that could be spent on billable hours.

Automate the billing process

You, and your team, enter matter information as time-tracked once, and the software will take care of the rest, generating invoices and sending them out to clients on your behalf.

Manage your cash flow

You will always have a clear record of what has been billed and remains outstanding. You can responsibly allocate your resources to maximize your profits.

Track payments and expenses

Having this information organized and readily available can save you a great deal of time and hassle when it comes time to file taxes or apply for loans or lines of credit.

Billing automation will save you and your team considerable time each month, which can be spent growing your business.

How to Identify the Best Legal Billing Software

When choosing legal billing software, there are a few key factors to keep in mind.

Choosing a program compatible with your firm’s existing tech stack, including your law practice management software, is critical to success. Consider the cost, ease of use, and customer support options. Mobile access is also crucial for lawyers who can access their files on any device — iPhone, iPad, or Android.

And finally, security is always a top priority when it comes to sensitive legal information. Look for software that has industry-standard security protocols in place to protect your data.

By keeping these factors in mind, you’ll choose the best legal billing software for your needs.

Best Practices for Implementing a Legal Billing Software

There are many different types of legal billing software on the market, and it can be challenging to decide which one is right for your law firm.

When choosing new software for your law firm, there are a few important factors to remember:

  • You must ensure that the software is compatible with your existing legal practice management software.

  • Be sure to clearly understand your law firm’s billing policies before setting up the software to ensure everything is billed correctly.

  • The software should be easy to use, but you still need to take time to train your staff on how to use the new software.

  • You want a responsive and helpful company when you run into problems. If you run into issues, you can contact the support team.

A little upfront investment will pay off in the long run by preventing billing mistakes and increasing efficiency. Following these simple tips, you can set your law firm up for success with legal billing software.

Increase Law Firm Revenue with Legal Billing Software

Ultimately, you can improve your firm’s bottom line and the client experience by investing in legal billing software. Here are five ways a legal billing software can help you achieve success:

1 ) Accurate Time Tracking

Time entry and expense tracking are crucial for any organization looking to boost productivity and improve profitability. Yet many organizations struggle with manually tracking time and expenses, leading to inaccuracies and lost data. The software makes tracking time and expenses by the user, client, or project easy.

Move beyond the notepad, and start tracking your time with a cloud-based software solution.

Whether on the go or at the office, easy time entry makes it simple to run timers simultaneously, record multiple time entries on one screen, and automatically convert appointments into time entries. You’ll always know your organization’s productivity and financial status with daily and weekly time summaries.

2 ) Automated Billing

Automated billing and online payments can make it easier for clients to pay their invoices, resulting in quicker payment turnaround times. Clients tend to delay payment if they don’t understand the invoice. Prevent this from happening by providing detailed and informative invoices.

With legal billing software, you can set up invoice templates with custom settings such as your billing policy and payment links to pay online —  you can even perform batch invoice creation to save administrative time.

You can even extend your brand while increasing workflow efficiencies by personalizing and creating branded invoices with your logo.

3 ) Online Payments

Online payments are becoming increasingly popular, and customers expect businesses to offer this option. You may even miss out on potential customers if you don’t offer online payments.

Online payments allow firms to quickly and easily receive payments from clients. This can be done via credit card, debit card, or even PayPal. In addition, online payments are more secure than traditional methods, such as mailing a check.

4 ) Custom Reporting

Real-time data is essential for any growing business and managing cash flow. You’ll want a solution with comprehensive reporting to manage your firm’s financial performance better and identify trends to ensure success—review payment history, balance due, collections, expenses, productivity, and summary reports.

Legal billing software should be able to run user activity reports, so you can get detailed insights into how your team works, including efficiency, expense, schedule, and internal tracked time.  This data can help you identify areas of improvement so your team can work smarter, not harder.

5 ) Enhanced Client Experience

Client portals are a great way to provide your clients with more information and control over their billing. Empower your clients to log in, view their account balances, make payments, and see a detailed fee history.

Grow Your Law Firm Revenue with Legal Billing Software

The legal industry is one of the most competitive and rapidly-changing fields. To succeed, law firms must be cutting edge in all aspects of their business – including billing. With so much at stake, it’s no wonder that more and more law firms are turning to legal billing software to help them stay ahead of the competition.

This article was authored by Dan Bowman of Bill4Time.

For more business of law legal news, click here to visit the National Law Review.

©2006-2022, BILL4TIME. ALL RIGHTS RESERVED.

5 Keys to SEC Compliance Success

The best way to avoid the scrutiny from the Securities and Exchange Commission (SEC) that can lead to significant legal liability is to strictly comply with all of the agency’s rules and regulations. Unfortunately, given the complexity of these regulations and the constantly changing legal landscape of securities laws, such as the Securities Act of 1933 and Securities Exchange Act of 1934, this is much easier said than done.

Here are five keys to SEC compliance.

1. Identify Your Particular Needs

It should be an obvious first step, but many compliance attorneys treat all clients the same and offer a one-size-fits-all approach to complying with the regulations promulgated by the Securities and Exchange Commission (SEC). While this might not be a terrible approach – so long as it is all-encompassing, it will keep your company in line with the SEC across the board – it can saddle your firm with concerns and extraneous internal rules that have no bearing on how you conduct business.

A great example is a cryptocurrency. The SEC is, belatedly, beginning to issue rules and regulations for financial firms that focus on and trade in Bitcoin and other cryptocurrencies. If your brokerage firm is not buying or selling securities in crypto-assets and has no plans to do so soon, then implementing compliance measures for cryptocurrency regulations has no benefit to your company. Those measures will, however, make the regulated securities professionals who work for your firm jump through pointless hoops in the ordinary course of their business.

Adopting a compliance strategy that more precisely meets your company’s needs will let your workers perform to their full capacity while still insulating your firm from legal liability or SEC scrutiny. It will just have to be updated if you choose to expand into new forms of securities trading.

2. Craft an All-Encompassing Compliance Strategy

Based on your firm’s precise regulatory needs, the next key to success is to come up with a compliance strategy that takes into account all of the SEC’s rules that could impact your company. Given the breadth of the SEC’s jurisdiction and the sheer number of regulations that it has put forth, this can take a while.

Once your firm’s legal requirements have been ascertained, the next step is to come up with ways that you can satisfy them during the day-to-day business activities at your firm. This is another reason why every compliance strategy should be tailored to your business – a compliance technique that works well and is easy for one firm may be onerous and inconvenient for another one.

As Dr. Nick Oberheiden, founding partner of the SEC compliance law firm Oberheiden P.C., often tells clients, “All SEC compliance measures should protect the securities firm from SEC liability. However, those measures should also be judged by how burdensome they are on the firm that is employing them. The least inconvenient method to adequately insulate your firm from liability is the best. Learning about a brokerage firm and understanding its strengths and weaknesses and its capabilities help compliance lawyers craft the best solutions for their clients. Unfortunately, one of the most common complaints that securities professionals have about attorneys is that they do not listen to their particular concerns. We strive to do better.”

3. Train, Train, and Retrain Your Workers

No compliance strategy is effective if it is not implemented. Training your employees and workers in the intricacies of the compliance strategy, explaining why it is important for them to follow it strictly, and describing the penalties for noncompliance is the next key to success.

Even here, though, it is not a matter of simply giving your employees a handbook of rules, policies, and procedures to memorize. Just like how the compliance strategy should be tailored to your firm, so too should the instruction materials be tailored to each type of worker at your company. While it can help to train non-regulated administrative staff how to detect the signs of financial misconduct or fraud, there is no reason to bog them down in the details of SEC regulations that only pertain to traders – doing so can overload them with irrelevant information and make them lose sight of what they need to know.

It is also important to remember that training is not a one-time ordeal. New hires must be onboarded and taught the rules of internal compliance. Existing workers should be retrained to keep them apprised of any updates and to ensure that they remember their roles in the compliance protocol.

4. Keep Your Compliance Strategy Updated

Keeping your compliance strategy updated is also essential when it comes to compliance inspections. An out-of-date compliance protocol may still cover many of the bases for SEC compliance. However, there will be gaps in the compliance requirements that you will be unaware of, giving you a false sense of security.

The compliance strategy should not just be updated to account for new SEC regulations, though: It should also get updated whenever your brokerage firm branches out into new types of trading or adds a new kind of financial service to its portfolio. With that new line of business will likely come new SEC regulations to abide by.

5. Audit Yourself Regularly

Even if you have a good compliance program or plan, have trained workers to follow it, and keep the protocols updated, you are still moving forward blindly if you do not regularly conduct internal audits of your company to make sure that those compliance rules are working. Many compliance programs and strategies check off all of the boxes, only to lead to an SEC investigation that finds problems because a single worker did not actually understand how to correctly perform a job task.

These situations of compliance issues are incredibly frustrating. They can also be detected, identified, and corrected through a compliance strategy that includes internal auditing by outside counsel or an SEC compliance attorney with prior experience investigating securities fraud.

Article By Dr. Nick Oberheiden of Oberheiden P.C.

For more securities and SEC legal news, click here to visit the National Law Review.

Oberheiden P.C. © 2022

DOJ Forces $85M End to “Long-Running Conspiracy” to Suppress Poultry Wages

Three poultry processors and a consulting firm that circulated wage information among them have entered a consent decree with the Department of Justice to end a “long-running conspiracy to exchange information about wages and benefits for poultry processing plant workers and collaborate with their competitors on compensation decisions,” a violation of the Sherman Antitrust Act. The poultry companies — Cargill Inc. and Cargill Meat Solutions Corp., Sanderson Farms Inc., and Wayne Farms LLC – agreed to pay nearly $85 million. In addition to the payment, the producers must submit to antitrust monitoring for 10 years.

The decree brings a halt to the exchange of compensation information and deceptive conduct toward chicken growers designed to lower their compensation. The DOJ charged two of the poultry processors – Sanderson Farms, which was just acquired via joint venture between Cargill and Continental Grain Co., and Wayne Farms, owned by Continental – with violating the Packers and Stockyards Act. The companies engaged in deceptive practices via a “tournament system” which pit chicken growers against each other to determine their compensation. Jonathan Meng, meanwhile, president of the data firm Webber, Meng, Sahl & Company, is banned from the industry for his role as information broker for the producers.

Cargill is a privately held, multinational corporation based in Minnetonka, Minn. The corporation’s major businesses are trading, purchasing and distributing grain and other agricultural commodities. In 2021, Cargill generated revenue of about $134.4 billion. In the meat and poultry processing industry, Cargill’s $20 billion in revenue in 2021 put it in third place behind Tyson Foods Inc. ($43 billion) and JBS USA Holdings, Inc. ($39 billion) and one notch ahead of Sysco Corp. ($18 billion).

Just days before the settlement, Bloomberg Law reporter Dan Papsucn wrote, Sanderson Farms was acquired for $4.5 billion via joint venture between Cargill and Continental Grain Co. Wayne Farms was already owned by Continental. The acquisition combined the third and sixth-largest companies in U.S. chicken production to form the new Wayne-Sanderson Farms company. Before they were merged, Sanderson Farms and Wayne Farms annually were generating approximately $3.56 billion and $2.2 billion, respectively.

The DOJ’s investigation continues into the activities of several unnamed co-conspirators.  The government’s suit was filed in federal court in Maryland (U.S. v. Cargill Meat Solutions Corp., et al., No. 1:22-cv-01821 D. Md.).

Increased Federal Attention

The poultry industry case demonstrates that the antitrust law enforcers at DOJ, in addition to those at the Federal Trade Commission, remain dedicated to increasing competition in such concentrated labor markets. Worker mobility is something President Biden has promised to protect. FTC Chairwoman Lina Khan is considering new regulations to ban non-competes and to target them with enforcement actions, according to Wall Street Journal reporters Dave Michaels and Ryan Tracy.

Agreements entered without the cloak of legitimate competitive concerns by employers are called “naked” agreements. In 2016 DOJ and FTC jointly declared that naked wage-fixing or no-poaching agreements were per se illegal under antitrust laws. If the agreement is separate from or not reasonably necessary to achieve a larger legitimate collaboration between the employers, the agreement is deemed illegal without any inquiry into its competitive effects. Legitimate joint ventures (including, for example, appropriate shared use of facilities) are not considered per se illegal under antitrust laws. For these legitimate ventures the DOJ advocates the “rule of reason” or “quick-look analysis.” Also in 2016, DOJ said it would proceed with criminal actions against naked wage-fixing or no-poaching agreements.

Of course, support for the legitimacy of non-competes and no-poaching agreements splits along party lines. Sometimes the issue isn’t whether the agreements should be eliminated, but who should eliminate them. The question becomes: Is this the purview of the federal government or is it up to state legislatures?

Private Litigation

Private actions are another consideration for employers. Auto repair chain Jiffy Lube, which is owned by Shell Oil Company, recently agreed to pay $2 million to settle claims that it used illegal no-poaching agreements which prevented franchise owners from hiring current or recent employees of other Jiffy Lube franchises. The settlement will be shared among 1,250 hourly workers in the Philadelphia metropolitan area in Pennsylvania, New Jersey and Delaware.

According to the class action complaint, Jiffy Lube used these agreements to suppress wages and prevent workers from achieving better terms of employment. Employees had to wait six months after leaving one Jiffy Lube shop before attempting to work at another, according to the terms. Workers sued claiming this was a violation of the Sherman Antitrust Act.

The case was filed in U.S. District Court for the Eastern District of Pennsylvania (Victor Fuentes v. Royal Dutch Shell PLC, et al., Case No. 2:18-cv-05174, E.D. Pa.).

Employers Beware

As these cases demonstrate, many employers don’t realize (or may not care) that these types of arrangements can be considered anticompetitive or that their employment agreements can create substantial antitrust liabilities. In addition to public and private litigation, restrictive employment agreements can tank business deals. Imagine your M&A deal craters when a buyer discovers you have a no-poach agreement with competitors.  You might not have seen it as problematic until your prospective buyer walks away because of the risk and your once promising deal is over.

Employers and business owners who wish to protect themselves when employees leave for new positions need to be careful how they go about building their defenses because doing it wrong can mean both civil and criminal charges against corporations and individuals, as these cases illustrate. Critical questions need to be answered in employment agreements and business deals. Is the employer – such as a franchisor – trying to stop intramural poaching within its own system, effectively causing vertical restraint? Or is it trying to legitimately protect itself from losing employees to competitors, or horizontal restraint? These are questions best addressed by counsel with a sophisticated understanding of antitrust law, employment agreements, and mergers and acquisitions.

Article By Jennifer M. Oliver of MoginRubin

For more antitrust legal news, click here to visit the National Law Review.

© MoginRubin LLP