Monday, December 9, 2013

War Stories: My First Loss

This story has nothing to do with whether the non-compete agreement at issue was enforceable.  But it was a humbling experience with a happy ending, and since it's Christmas time, I figured a warm-and-fuzzy story was in order!
It was the dead of winter and I was bored out of my mind at work.  After two years of trying cases all over the State of Michigan (very successfully, I might add), I was itching for a good, juicy trial. 
In walks two cardiologists who had a falling out with the practice they joined immediately after they became doctors.  They came to my office on a Wednesday morning after being sued for breach of the non-competition provision in their employment agreements.  There was no question they had breached and I was ready to advise these clients to stipulate to an injunction and call it a day.  But my clients had a pretty good story as to why they were practicing at the hospitals referenced in their non-compete clause: their boss - in an effort to keep them when they expressed a desire to leave the practice - promised not to enforce the non-compete against them, if only they'd stay a bit longer.  Hmmmm.  That was an interesting twist and with a little discovery, this made the case defensible!  Folks, this is the stuff lawyer dreams are made of. 
The hearing was two days after this initial client meeting.  In typical fashion, his honor declared that since my clients asserted that their boss had waived the non-compete provision, there existed a question of fact that necessitated an evidentiary hearing.  Hooooray!    As a defendant in a motion for preliminary injunction, this is precisely the result the lawyer wants.  It usually buys some time while the parties talk and often can lead to settlement.  At a minimum, I figured an evidentiary hearing would at least delay the entry of an injunction against my clients.  And it held the promise of a trial-like experience.  I was giddy. 
But my excitement turned to terror when the judge rejected my request for discovery on this issue and instead ordered that the evidentiary hearing take place in two hours.  TWO HOURS.  No one can get ready for an evidentiary hearing that quickly, could they?  I had known my clients for all of 48 hours.  I didn't know all of the facts.  The issues related to the treatment of cardiology patients and hospital administration.  This was complex stuff.  But the judge had a good reason to expedite the process: patient care was at issue and so was my clients' ability to make a living.  In his mind, these issues needed to be decided here and now. 

For the first time since I was a baby lawyer, I was afraid.  I'm good at trial work because I know how to properly prepare a case.  I work and re-work the story, organize and re-organize the trial structure, and shape and re-shape the legal arguments to the point where by the time the trial arrives (which is usually a good 12-18 months after a case is filed), I can try the case in my sleep.  I have never been a "trial by fire" kind of attorney and this situation took me way outside my comfort zone. 

I had a serious talk with my clients about the risks of proceeding with the hearing.  The judge might not buy the waiver argument.  Even if he bought it, since waiver was an affirmative defense, we had the burden of proof and we had no independent evidence to corroborate my clients' story.  And there was no way we would get any evidence in the two hours before the hearing.  Despite the risks, the clients were on board.  And I'm always up for a challenge.  So we went for it.
I spent my limited prep time shaping my clients' story: I knew the Plaintiff's principal  would never concede that he waived the non-compete.  But I knew that if I told a great story, the judge might see things my way.  

That prep session was the fastest two hours of my life.  I ran into the courtroom just as the judge was taking the bench, took my seat, and listened as the Plaintiff spent the next hour bashing my clients.  It was uncomfortable.  It was painful.  It was not at all uncommon in my experience, but my clients were mortified.  One of them had sweat dripping down his face.  The other couldn't look me in the eye.  Their ability to work rested on this hearing.  Their future was literally in my hands. 
We told a pretty darn good story.  These were two young doctors with families to feed.    Both were foreign and came to this country in search of the American dream.  They were genuine, articulate and convincing.  Each of them testified in a manner that was consistent with the other.  I was so, so proud of both of them.

At the end of the hearing, it was the word of the Plaintiff against the word of my clients.  And this was precisely the problem: in a he said/she said scenario, the party with the burden of proof loses.  And it was for this reason that I lost this hearing.   
This one hurt.  I would have looked like such a hero had I brought home a win for these clients!  But alas, this is not the movies, the good guys didn't win, and I was disappointed.  And it was the first time I had lost a hearing where evidence was taken.   

So why do I say that this story has a happy ending?  Because of the clients.  They took the loss like the wonderful men they are.  They didn't blame me.  They didn't blame the system.  They immediately re-grouped, came up with a plan B, and are practicing medicine in other hospitals today.  It's not often that I get to know clients as intimately as I got to know these guys in such a short period of time.  And it's also unusual for clients to handle a loss with such grace and dignity.  On that day, I learned from those clients how to handle losing a case.  

Nearly a year has passed, and I've suffered more losses.  But my reaction to those losses is a testament to what these clients taught me.  This isn't personal.  This is business.  A good business person picks herself up when she falls down and she moves on.  And a good business person isn't afraid of losing because she's lost before.  My first loss has made me a better lawyer and, I'd like to think, a better person.  In this business, there can be no happier ending. 

Liza Favaro 
Non-Compete Counsel 

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