Defamation is Bad, but it Doesn’t Justify Chilling Free Speech

Blocked in Canada

Our neighbors to the North are very American-like, until you get to issues of free speech. Most view Canada as the “least protective of free speech in the English-speaking world.” Reasonable minds can differ on some of Canada’s laws, such as prohibiting the media from identifying criminals until they have been convicted, but most of the law is still based on policies designed to prevent any criticism of the government. Canadians can be held liable by English-Canadian courts for comments on public affairs, about public figures, which are factually true, and which are broadly believed.

A recent parody video posted on You Tube illustrates just how lacking the concept of free speech is in Canada. The video is a fake cable company ad posted by Extremely Decent Films. It does not mention any cable company by name, and indeed it is specifically directed at American cable companies. Nonetheless, someone lodged a complaint in Canada, and that was sufficient to scare You Tube into removing the video, given the vagaries of Canada’s libel laws (although the video has since been reposted in response to articles such as this one).

Women Can be Fired for Being Too Attractive, Says Iowa Supreme Court

dental-assistantA seemingly horrible decision out of Iowa provides an extreme example of how discrimination is only actionable if it involves a protected class.

In a very rare move, the Iowa Supreme Court had already issued a ruling in this case but withdrew its own ruling to give it more consideration. On Friday it reissued the ruling, standing by it decision that a dentist acted legally when he fired an assistant because he found her too attractive.

The dentist fired the employee because he felt she was a threat to his marriage, and the court ruled that is permitted, even if the employee has not done anything to lead the boss to believe he would ever have a shot at a relationship. The court held that a firing under these circumstance does not amount to illegal sex discrimination because it is the result of feelings, not gender.

The court upheld the ruling of the trial judge, who dismissed a discrimination lawsuit filed against dentist James Knight, who fired his assistant Melissa Nelson, even though he admitted he always agreed that she had been a great employee for ten years she worked for him. The trial judge and the appeal court did not see the termination as having anything to do with gender, because Nelson was replaced by another woman, and Knight’s entire staff consists of women.

How to Fight Back Against Online Defamation

Aaron Morris

Always striving not to reinvent the wheel, I keep my eyes open for articles that do a good job of explaining basic legal concepts.  In that regard, I receve many calls from prospective clients who don’t yet know the fundamentals of pursuing an online defamation claim.  Many times, the callers want to sue Google since it is Google’s search engine that is revealing the sites that are posting the defamatory comments.  That is not possible (although we have had pretty good luck getting Google to cooperate in taking down blogs on their own service and in one instance Google agreed to stop indexing a particular magazine, but that is rare).

The following article [reprinted with permission] provides a brief outline of how to attack online defamation.  If you happen to be in New Jersey, contact the author for any action you need to pursue or defend.  If you’re here in California, or the action needs to be brought in California, then call Morris & Stone at (714) 954-0700.

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Individuals now have the freedom to inexpensively and easily share everything  from their art to their opinions online. However, the ease and anonymity  associated with posting information on the Internet, comes at the cost of  providing a perfect avenue for those seeking to abuse the system. Read the rest of this entry »

Top Ten Ways to Blow a Job Interview

Interviewing prospective employees is an amazing process.  How long does an interview last?  Ten minutes? Thirty minutes? Maybe an hour and a half if the interview is over lunch?  And yet, even over such a short amount of time, it is amazing how some interviewees cannot keep from revealing their true natures.  They are doing something that will likely change their live in a significant way, and they can’t put on a good show for even that small amount of time.

I don’t mean to imply that someone should put on a false front, but interviewing is like a first date; the other person knows you possess some flaws, but they want to feel like you respect them enough to forgo slurping your soup just this once.

So, make sure your phone is off before you walk into the interview.  Unless your wife is nine months pregnant, don’t even check who is calling.  Be super nice to the support staff, because they may well be asked about you.  Don’t be late, and don’t act rushed.

For a list of ways to blow an interview, go to Top Ten Ways to Blow a Job Interview.

“I Know Better Syndrome” Can Cost You Your Job

A case out of San Diego beautifully illustrates an issue that I frequently encounter with prospective clients, and provides a cautionary tale.

The fact pattern is so common that I have given it a name — the “‘I Know Better’ Syndrome”, or “Syndrome” for short.  The Syndrome arises when an employee takes a firm stand on some issue, to the point of refusing to do what they are told, believing that they have a better understanding of the law or company policies.

For example, the company policy will be that reimbursements can’t be made out of petty cash without a receipt. The boss tells an employee to reimburse another worker for a company lunch, and the employ refuses because the worker does not have a receipt. The boss writes her up for insubordination, but the employee will have none of that and goes to Human Resources to complain that she was written up when all she did was follow company policy. The next thing she knows, she is called in and terminated because her inflexible adherence to the strict letter of the policies has just become too much of an annoyance.

So it was in the San Diego case.  Here is a summary of the facts, as reported by Sign On San Diego. The Superior Court in San Diego is way behind the electronic curve so I could not review the actual court documents on file.  This summary is based on what was reported on Sign On San Diego and may not be entirely accurate. The point here is not the specific facts but the legal issue they illustrate.

Shari Watson, a Chula Vista council aide, was told to deposit a $2,400 check from Cox Communications, made out to “The City of Chula Vista/International Friendship Games”. This bothered Watson, because Cox had only agreed to a $1,000 sponsorship for the event.  Watson could not reconcile why Cox would be sending a check for $2,400.  Watson asked Deputy Mayor Rudy Ramirez if she could call Cox to see if the check was made out in error, but he told her to go ahead and deposit it and let the finance department work out any problems.

Freeze.  Right there is the moment in time that employees fall prey to the I Know Better Syndrome.  Read the rest of this entry »

Judges Must be Wary of Anti-SLAPP Appeal Trap

Anti-SLAPP Appeal Platypus

Rare North-American SLAPP Platypus

A few months back I won on an anti-SLAPP motion that I brought long after the case was filed. The thing is, I was not representing the Defendant initially, but when I was retained the first thing I saw from my review of the case was that the case was a quintessential SLAPP.  No discovery or anything beyond the complaint and answer had occurred, so I persuaded the court to allow me to bring a SLAPP motion well beyond the normal 60-day deadline.  I won the motion, the case was over, the client celebrated with champagne, and all was good with the world.

That case got some publicity, and now it seems like every attorney thinks they can file an anti-SLAPP motion at any time during the litigation, even on the eve of trial. It just happened to me today. Our case is nearly two years old, and the trial is about a month away.  All of a sudden, defense counsel decided that our action is a SLAPP, and it would be an unforgivable miscarriage of justice to allow this matter to go to trial without first bringing an anti-SLAPP motion. Indeed, this was such an emergency, that defense counsel had to go into court on an ex parte basis to ask the court to shorten the notice period to bring the motion because there is not enough time before the trial.  An ex parte application requires a showing of irreparable harm, and defense counsel so argued.

The anti-SLAPP motion, which was attached to the ex parte application, was utterly without merit, which is not surprising given that if the complaint was a SLAPP the defendant’s counsel certainly would have been able to reach that conclusion in the prior 22 months. Not surprisingly, the application DENIED.

Why would an attorney do such a thing? Read the rest of this entry »

Morris & Stone Gets Triple Damages and Attorney Fees for Theft

When is a breach of contract also fraud? When the party never intended to perform.

When do you get triple damages and all of your attorney fees for fraud? When you hire Morris & Stone (although your results could differ).

Breach of contract is easy to spot, but business owners are often confused about what constitutes fraud. Someone fails to pay all the money owed on an invoice, and the client wants us to add a cause of action for fraud. That’s probably not fraud.

The elements of fraud are (1) a misrepresentation of a material fact; (2) made with the intention that the party rely on that representation to his detriment; (3) reasonable reliance on the misrepresentation; and (4) damages. As you can see from the above elements, in the case of a contract, for there to be fraud the fraudulent intent must exist at the time of the contract. If a person enters into a contract intending to perform, if he later fails to perform, that breach will not transmute into fraud no matter now egregious and flagrant his breach. To prove fraud, you must show that at the time the defendant entered into the agreement, he had no intention of performing.

We went her one better. We sued for fraud, because we could see no indication that the money ever went into the business venture. We felt that would be sufficient to show that at the time of the contract the defendant did not intend to perform. He was free to argue that he intended to invest the money at the time of the contract and therefore it was not fraud, but how would he explain that the money was never used for the intended purpose? As we suspected, defendant fought us on discovery, and when we compelled him to respond, he could not provide any proof that the money had ever gone to the business.So how do you get into the mind of the defendant to determine if he intended to perform when he signed the agreement? Thankfully, California courts have held that the behavior after the contract was signed can be used to show that the defendant never intended to perform. In our case, the defendant borrowed a significant amount of money from our client, and pursuant to the agreement that money was to be invested in a business venture. The money was never repaid, and our client hired us to recovery the money.

But here is where we got really creative. Read the rest of this entry »

The Legality of the “Tip Jar”

Back in June of 2009, I wrote about the Starbucks tipping case. Some rascally class action attorneys had won a huge payday, claiming that Starbucks was violating the sanctity of the community tip jar. You see, Labor Code section 351 states that no “employer or agent” shall take any part of the gratuity “left for an employee by a patron.” An “agent” is defined by section 350(d) as anyone who can hire or fire, or who controls the acts of the employees.”

The attorneys managed to convince a Superior Court Judge in San Diego that when Starbucks permitted “supervisors” (you know, the ones that make 25 cents an hour more because they’ve been there the longest) to take a cut of the community tips, that violated section 351. The judge awarded $105 million in damages for this outrage. Since Starbucks would need to sell like a hundred Caramel Macchiatos to cover that, it appealed.

The Court of Appeal said, “hold the foam.” The flaw in the logic is obvious (understanding that I always have perfect 20-20 hindsight with court decisions).  When I sit down at a restaurant, enjoy my meal and the service, and then leave a tip, I am leaving a tip for my specific server. However, when I order a latte at a Starbucks and drop my change into the tip jar, who am I tipping? I’m certainly not intending to tip only the barista. At that point, I don’t even know who is going to prepare my beverage (or even if it will be tip worthy). It is probably far more likely that I’m tipping the friendly cashier that accurately took my order and retrieved my scone. Or perhaps my intent was to tip the person that cleaned the washroom where I washed my hands before stepping up to the counter. As you can see, in the case of a community tip jar, we can never truly know who generated the tip, so it makes much more sense to assume that it is my intent to tip everyone working there, who have all joined to make this such a special coffee experience, from the supervisors down. Hell, I wouldn’t even mind if the owners took a cut, because after all they are the ones that hired the fine people who cleaned the restroom, who took my order, who retrieved my scone and who made the Venti, whole milk, extra hot latte that Aaron drank.

Indeed, the Court of Appeal concluded that the purpose behind section 351 was not so much to quibble about splitting up the tips, but rather to “prevent a fraud on the tipping public” by prohibiting an employer from giving a tip left for a server to someone not intended by the tipper. There is no such fraud with the Starbucks tip jar.

Recently, the California Supreme Court put another crack in the ol’ tip jar. Read the rest of this entry »

California Supreme Court Rejects Virtually All Non-Competition Agreements

Herein I violate the conventional wisdom that blog posts should be short, because I want a very detailed discussion of non-compete agreements available to both employees and employers.  But in case you have time only for a quick takeaway, I first provide a summary and then the long tome.

Summary:

In a ruling long awaited by the employment law sector, the California Supreme Court effectively rejected the use of most non-competition agreements in California.

In Edwards v. Arthur Andersen, the unanimous court held that Business and Professions Code § 16600 gives California workers great freedom to switch jobs, to compete against old employers and to solicit former clients. “In sum, following the Legislature, this court generally condemns noncompetition agreements,” Justice Ming Chin wrote. “Under the statute’s plain meaning, therefore, an employer cannot by contract restrain a former employee from engaging in his or her profession, trade, or business unless the agreement falls within one of the exceptions to the rule.”

Although the business litigation attorneys at Morris & Stone have long advised that this ruling was coming, this ruling finally creates a brighter line distinction by the state’s highest court. Any non-compete agreements that don’t fall under one of the statutory exemptions are void.  Previously there was still a potential loophole by which a non-compete agreement could be found enforceable. The Federal Ninth Circuit had ruled that section 16600 contained a “narrow restraint” exception that allowed companies to use non-compete agreements so long as the pacts only restricted “a small or limited part” of their employees’ future ability to work.

In Edwards, accounting firm Arthur Andersen argued that the Ninth Circuit’s “narrow restraint” exception validated the company’s non-competition agreement, which tax manager Raymond Edwards signed in 1997. In 2002, following upheavals at Arthur Andersen, banking corporation HSBC offered Edwards a job on the condition that he and Arthur Andersen terminate his non-compete contract. Edwards refused to sign the termination agreement because it required him to give up all future legal claims. Arthur Anderson had recently been indicted in connection with the Enron debacle, and Edwards was justifiably concerned that if he was later pulled into the controversy, he might be giving up any indemnity claims against Arthur Anderson if he signed the termination agreement. Arthur Andersen fired Edwards for his refusal to sign the termination agreement, and HSBC rescinded its job offer. Edwards sued both companies for interfering with his career.

“Contrary to Andersen’s belief, however, California courts have not embraced the Ninth Circuit’s narrow-restraint exception,” Justice Chin wrote. “We reject Andersen’s contention that we should adopt a narrow-restraint exception to §16600 and leave it to the Legislature, if it chooses, either to relax the statutory restrictions or adopt additional exceptions to the prohibition-against-restraint rule under §16600.”

Unfortunately, the Supreme Court, in a footnote, declined to address a trade-secret exception to §16600. The most common dispute when an employee goes to work for a competitor is the issue of clients. The former employer will claim that the client list is a trade-secret, and therefore the employee cannot call on those clients. The employee will claim that there is nothing special about the clients. These competing claims can seriously impact the employability of that employee, because prospective employers do not want to have to worry about who is being solicited by their employees. This decision will place great emphasis on California’s Uniform Trade Secrets Act, a statute that gives employers the right to protect certain company information, including client lists.

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In Depth Analysis: Read the rest of this entry »

Deviant Employees Protected from Termination

As you know, Megan’s Law set up a website that lists registered sex offenders.  Before extending an offer of employment, one might think that checking that website would be a quick way to make sure a sex offender is not being hired, especially if the job involves contact with children.  One would be wrong.

California is an at-will employment state, meaning that employers can terminate employees for any reason or no reason at all. Although there are statutory exceptions prohibiting employers from taking adverse employment action on the basis of race, gender, and other protected groups, a loophole in Megan’s Law serves to make sex offenders a protected group giving them rights that other employees do not have. Read the rest of this entry »

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