Non-Compete Counsel: January 2014

Friday, January 24, 2014

Clients Behaving Badly

"The only thing I don't like about being a lawyer is the clients." How many of us attorneys have heard that one?

I tend to disagree, for the most part. I've had the great fortune of working for some really great people and organizations. But they can't all be roses, can they? Clients can sometimes make our jobs very difficult; they can be rude, disorganized, slow payers ... I'm sure I don't need to elaborate.

But all of that is manageable. What I struggle with are clients who behave badly. And in the context of a non-compete or trade secrets lawsuit, bad client behavior can lose an otherwise winnable case.

Take, for example, the client who was a defendant in a trade secrets case who downloaded client information in the middle of the night using a copy of the key he returned when he was resigned the day before. He had no non-compete. But I think you know what happened. He was ordered to return the information, he was barred from contacting anyone on the client list he took, and he was taken out behind the court house and beaten (well, not beaten, but I certainly tried to put the fear of God into him).

Or what about the client with a non-compete that prohibited him from working for a specific, named competitor? That shouldn't be too hard to understand, right? WRONG. Even though everybody knows you can't do indirectly what you can't do directly, my client formed a company of which he was the sole member and employee and his new company worked for that competitor. Um .... that's pretty hard to defend.

Even when bad behavior doesn't lose a case, it can certainly be embarrassing. My favorite example is the client who literally took his work laptop with him when he walked out the door of his former employer. You shouldn't do that. I told him he would have to give it back and that I would offer it up at the hearing.

But at the preliminary injunction hearing, my client informed me for the first time that he would give all of the former employer's information back, but that he really, really wanted to keep the laptop. His reason? Porn. Yup, his laptop was filled with it. To the brim. It was everywhere. My poor, poor IT guy. He was tasked with segregating all of the former employer's information from my client's "personal" information. IT guy couldn't looked at me without blushing ever again.

I'd be willing to bet you, dear readers, have some whoppers. So let 'em rip. Don't tell any tales out of school. Change all names to protect the ~~innocent~~ guilty. But do tell - what's your favorite "Client Behaving Badly" story? I'll feature them in a future post.

Liza Favaro
Non-Compete Counsel

* Disclaimer: The ideas and opinions shared on this site are my own and are not attributable to my employer. No amount of interaction on this site will create an attorney-client relationship. If you have a legal question and you ask it here, I will also answer it here (if I can), but such answers do not guarantee results and do not create an attorney-client relationship. If you wish to contact me directly, you may do so at efavaro@gmhlaw.com.

Tuesday, January 14, 2014

Female Attorneys: Own It!

It's Off-Topic Tuesday again, and I'm hot on this female attorney topic. I think I'm fascinated by it because it's so ironic: female attorneys (myself included) are often called bitchy, as I explained in this post, but we are also often treated with kid gloves - sometimes by the very same people who put us in the "bitch" category! It's baffling.

And yet, when I see the way in which women are depicted in the media, maybe it's not so baffling. From the seemingly smart, yet well-endowed, women who appear on Fox News Channel to Hillary Clinton and the infamous comments regarding pantsuits, the fact of the matter is that men have no clue how to treat smart female attorneys (or any smart woman, for that matter). And so they do what's easy - they emphasize appearance. And when appearance is emphasized, brains become an afterthought and before you know it, female attorneys are - in the minds of the men with whom we work - mythical creatures who are to be feared and coddled all at the same time.

Take Megyn Kelly - Fox News Channel's current fair-haired girl. It took Google all of about two seconds to direct me to this article, where Ms. Kelly has that "after sex" look about her - you know the one. The article is discussing Ms. Kelly's return to work after maternity leave. "And not a day too soon," the article reads. "She's even sporting a new snazzy haircut." Really? REALLY? Megyn Kelly graduated from law school with honors and spent nine years at the well-regarded law firm Jones Day. As an anchor for Fox News, she covered the 2012 presidential election, the 2013 government shutdown, and the Sandy Hook Elementary School shooting. It takes brains and guts to do what she has done and continues to do. And yet ... her new haircut is somehow news.

Now I suppose one might argue that Ms. Kelly has brought some of this on herself. After all, she did pose for the picture referenced above, and she definitely doesn't seem like the type who would be caught without makeup. But the media analyzes Hillary Clinton's appearance on a regular basis, when it's obvious that Hillary doesn't give a rip about how she looks. Her pantsuits, scrunchies, and eyeglasses are somehow news, as this article aptly describes, despite her list of credentials so long it would take me days to list them here.

And so you can see my confusion. No female attorney wants to be a "bitch." None of us wants the emphasis on our appearance. So how do we female attorneys make sure we are treated with respect, rather disparaged or simply thought of as window dressing?

In my humble opinion, just own it. Own the fact that you are a woman, however that looks for you. If it's in your nature to be a "bitch," go for it. (Although I highly doubt acting this way all the time is in anyones nature - it just takes so much effort, no?) If you want your appearance to be emphasized a-la Megyn Kelly, make sure when you show up to court wearing a killer skirt suit, you don't forget your killer argument. If you really want to be known for your brain, be prepared and know your stuff. But whatever you do, don't try to be something you're not.

And here's the thing: "owning it" means that sometimes, people won't like you. If your hallmark is kindness, clients who want a bulldog may go elsewhere. Let them. If you are super aggressive and it pisses off your opponent, so be it. If people make comments about your appearance, who are you to stop them?

The point is that there's a lot of pressure on female attorneys, but I think most of it comes from ourselves. It's time we relax, embrace our female characteristics, and stop apologizing for them.

How have you learned to "own it"?

Liza Favaro

Non-Compete Counsel

Thursday, January 9, 2014

The Right Side of the "V": Why I'd Rather Bust Non-Competes

On which side of the “v” do you prefer to sit? For business and employment litigators, we usually don’t have a preference. By the time the parties decide to litigate, everyone has a complaint and a party’s designation as “plaintiff” or “defendant” is really just a question of timing: he who gets to the courthouse first is the plaintiff.

But when it comes to non-compete cases, I am decidedly more comfortable on the right side of the “v.” Call me lazy, but I find defending former employees and their new employers to be a far easier task than representing the party seeking enforcement of a non-competition agreement. Here’s why:

Most Non-Competes Are Sloppily Written.

Sloppily? Yes, that’s the word I choose to use in this instance because, quite frankly, there is no other way to describe it. So often non-competes are borne of bad cut-and-paste jobs from the internet. As I explained in this post, this is a very, very bad idea.

Non-competes should be narrowly tailored or they are invalidated. A sloppy non-compete will contain a three-year duration, when one year will suffice. A sloppy non-compete might include a world-wide geographic restriction even when a ten-mile radius will do just fine. A sloppy non-compete can literally prohibit a former employee from making a living. Good luck enforcing that.

Sloppiness can go the other way, too. Consider this scenario: a home healthcare agency’s non-compete provision prohibits contact with patients, but not referral sources. This makes zero sense. Home health care agencies operate off of referrals. It seems unfair for a former employee to contact a referral source on behalf of a new employer and suggest patients be referred to the new employer, doesn't it? But without a contractual prohibition against contacting referral sources of the former employer's, the plaintiff’s case becomes far more difficult. After all, non-compete agreements must be express agreements. And I have yet to see a common-law unfair competition claim stick.

Most Employees Are Not That Important.

Employees - particularly mid-level employees - are fungible. Unless a former employee is the lifeblood of a business (a key salesperson with personal relationships with your biggest customers or the inventor of your product), chances are that the employer seeking enforcement of a non-compete is not really trying to protect a business interest, but is instead trying to send the former employee (and current ones too) the “don’t mess with me” message.

I once represented one such employer. The defendant-former employee sold heavy manufacturing equipment on my client's behalf and left to go work for a manufacturer of similar (but not identical) equipment. The customers the former employee serviced in his new gig were different from those he serviced with my client, but my client insisted on suing him anyway. My client wanted to send a message to employees that violating employment agreements is not without consequences.

The judge's denial of my motion for a preliminary injunction was not surprising, but his reasoning was: he simply could not see how a lowly salesman who wasn’t using his customer contacts from his previous employer could possibly pose such a threat that he had to be put out of work. Seriously. In the judge’s mind, the former employee wasn’t important enough for my client to worry about (and, truth be told, the judge was right). I’ve since used this argument several times and it has worked remarkably well, given the right set of facts. Remember, a non-compete must protect a legitimate business interest. It can’t just prevent competition.

The Economy Sucks (Still).

I know many of us don't view judges as human, but I promise you they are. And because they are human, I have seen many of them bend over backwards not to put someone out of work. Michigan – where I practice – has the third highest unemployment rate in the United States. And it just became a right-to-work state. These two forces have created a perfect storm for employers – as long as their departing employees haven’t done anything inherently bad (read: steal confidential information), it’s likely that a judge will find some way of enabling that employee to keep working, even if it’s for a perceived “competitor.”

So Where Does This Leave Us?

I want to make myself perfectly clear: a well-crafted, narrowly tailored non-compete agreement can and should be enforced. But the facts have to line up just right for this to happen. My War Stories posts set up a nice contrast in this regard. But rare is the occasion that a client proactively puts a solid non-compete agreement in place. Such measures are the key to a successful suit to enforce a non-compete, are they not?

What is your preference: employer or employee? Which side of the “v” are you on?

Liza Favaro

Non-Compete Counsel

Tuesday, January 7, 2014

Female Attorneys: Stop Calling Us Bitches

On this Off-Topic Tuesday, I want to re-visit the topic of female attorneys again. We’ve looked at this issue several times in the last several weeks in this post and this post. But those were more academic discussions about the direction female attorneys are taking their careers. This discussion is a little more concrete and a lot more frank. So let me give you the warning now: if the word “bitch” freaks you out, you might want to re-visit the blog on a day when I’m discussing more tame topics. But for the rest of you, saddle up. It’s about to get real up in here.

How can female attorneys navigate that fine line between being so nasty that her colleagues widely refer to her as a “bitch” and being such a pushover that her clients and colleagues refer to her as “not aggressive enough”? It’s tricky for sure and no attorney – particularly a litigator – wants to be in either category.

Today, I am going to start with “bitch” – if I had a nickel for every time one of my colleagues referred to a female attorney they are dealing with as a “bitch,” I would be a rich woman. Having been referred to as a “bitch” myself, I can safely say that the vast majority of female attorneys that my male colleagues disparage in this way are actually lovely people. A female attorney who I had the pleasure of trying a case against a couple of years ago is an adoring wife, loving mother and she and I had many pleasant discussions about girly things such as shoes, appropriate court room attire and the frustrations of styling one’s hair in the dead of winter. She is also a brilliant attorney. And trust me, you don’t want to cross her in court because she’s smart, she’s always well-prepared and she’s not shy about pointing out the flaws in her opponent’s position. For this, I admire her. I guarantee male attorneys far and wide have called her a “bitch.” After all, I am cut from the same cloth she is and I’m called that word frequently enough that I’ve considered putting it on my bar card.

But am I – is my female colleague/friend – a “bitch”? I actually ~~dusted off the dictionary~~ looked it up online and here’s how Merriam- Webster defines that word:

: the female of the dog or some other carnivorous mammals

a: a lewd or immoral woman

b: a malicious, spiteful, or overbearing woman —sometimes used as a generalized term of abuse

: something that is extremely difficult, objectionable, or unpleasant

Ok, we are not dogs and most of us are not lewd or immoral women (at least not openly, I hope!). So when people call female attorneys “bitches,” what they are really saying is that we are “malicious, spiteful or overbearing,” maybe even “abus[ive].” They are saying we are “difficult, objectionable, or unpleasant.”

How is being a smart, well-prepared and outspoken person the equivalent of being malicious, spiteful, overbearing or abusive? How is knowing the law, understanding how the facts apply to the law and clearly stating my position difficult, objectionable or unpleasant?

The short answer is that I am none of the things Merriam-Webster offers to define the word “bitch.” And neither are any of the female attorneys I’ve encountered. In my (not-so-humble) opinion, “bitch” is a code word ill-mannered attorneys use when they get schooled by a female. It is for this reason that when people refer to female attorneys that way, it says far more about the speaker than it does the subject.

As I was drafting this post, it occurred to me that the male attorneys I’ve encountered who have referred to me or other female attorneys that way are bottom feeders. They have self-esteem issues and it hurts their fragile egos when a female attorney gets the better of them. Mercifully, I’ve been blessed to work primarily with polished, professional attorneys who recognize that a person’s gender has nothing to do with their legal ability.

But, dear readers, the trolls are out there. And they will say nasty things. And it has nothing to do with me or you. But that doesn’t mean it doesn’t hurt. And it doesn’t mean we can’t fight back.

So I ask you: what should a female attorney do to ensure she’s not widely known in the legal community as a “bitch”? More importantly, how can female attorneys find the sweet spot between being a “bitch” and being such a pushover that she’s viewed as "not aggresive enough" to do her job? More on that next week. In the meantime, sound off! I'd love to hear from you!

Liza Favaro

Non-Compete Counsel