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Last week, the NFL sought to end the political controversy surrounding some players kneeling during the national anthem by enacting a policy fining teams if players kneeled during the Star-Spangled Banner.

Under the new policy, players could stay in the locker room while the national anthem of the United States is played. Shortly, thereafter, players wrongfully asserted that the new policy violates their First Amendment protection of “freedom of speech.”

The problem with the players’ constitutional argument is that the Constitution only applies to “State actors.” The state action requirement stems from the fact that the constitutional amendments protecting individual rights are mostly phrased as prohibitions against government action. The First Amendment to the United States Constitution sets forth, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech, or the press, or the right of the people peacefully to assemble, and to petition the Government for a redress of grievances.” The Fourteenth Amendment, which was ratified after the Civil War, made most of the liberties set forth in the Bill of Rights applicable to the States.

Continue Reading NFL’s Anti-Kneeling Policy Does Not Violate Players’ Constitutional or Employment Rights

The termination of a shareholder’s employment may constitute oppression under N.J.S.A. 14A:12-7(b)(1)(c). That is because a person who holds a share in a closely held corporation often does so “for the assurance of employment in a closely-held corporation in the business.” Muellenberg v. Bilkon Corp., 143 N.J. 168, 180-181 (1996). That is because, a shareholder may have a “reasonable expectation” of continued employment. See, Brenner v. Berkowitz, 134 N.J. 488, 508 (1993).

When representing the minority, it is important to develop why the employee/shareholder had a reasonable expectation of continued employment. Of course, when representing the corporation or majority, counsel should present evidence that the employee/shareholder did not have a reasonable expectation of continued employment.

Continue Reading Can the Termination of a Shareholder’s Employment be Oppression?

On July 5, 2016, the United States District Court of Appeals for the Ninth Circuit issued a decision in the case entitled United States v. Nosal. The case involved a former employer and others using the password of another employee to hack into his former employer’s database in order to access and take information which belonged to his former employer.

The decision has gained a lot of attention and press because Mr. Nosal’s criminal conviction was based upon his use of another employee’s passwords. There are a large number of articles and blog posts warning that the holding in the case could result in the criminal prosecution of an individual who uses a friend’s Netflix or HBO GO password to access those sites. While that could be one result of the decision, I believe the holding in the Nosal case does not currently go that far. Per the Ninth Circuit, “this appeal is not about password sharing. Nor is it about violating a company’s internal computer use policies.” Rather, the case revolves around accessing a protected computer with the intent to defraud as defined in the Computer Fraud & Abuse Act (CFAA), 18 U.S.C. § 1030.

Continue Reading Does Recent 9th Circuit Court of Appeal Decision Make It a Crime to Share Passwords to Online Accounts?

Several months ago, I blogged about the Rodriguez v. Raymours Furniture Co., 436 N.J. Super. 305 (Super. Ct. 2014)case. The case addressed an important issue – whether or not an employee’s could enter an agreement to shorten the statute of limitations period from 2 years to six months to assert an employment discrimination claim pursuant to New Jersey’s Law Against Discrimination (LAD). Yesterday, the New Jersey Supreme Court held that the statute of limitations period could not be reduced by agreement. Continue Reading NJ Supreme Court Says Employees Can’t Agree to Shorten Statute of Limitations

On December 18, 2015, Comedian Bill Cosby’s wife, Camille, filed a motion in Federal Court seeking to quash a subpoena, which served by the attorneys representing the women who sued Mr. Cosby.  The complaint against Mr. Cosby was initiated on December 10, 2014, by Tamara Green (see attachment here).  Six additional Plaintiffs were added to the lawsuit filed in the United States District Court for District of Massachusetts, Western Division through various amendments.  Recently, Mr. Cosby filed counterclaims against the Plaintiffs.

Although each of the seven Plaintiffs alleges that they were sexually assaulted by Mr. Cosby several decades ago, the present lawsuit only asserts claims against the comedian for defamation, invasion of privacy, and intentional infliction of emotional distress.   Plaintiffs likely did not include claims for the alleged sexual assaults because those claims are barred by the applicable statutes of limitations.  Plaintiffs alleged that when they publicly accused Mr. Cosby of sexually assaulting them in 2014, Mr. Cosby directed his representative to make six statements denying the allegations.  The complaint alleges that those comments in response to the allegations are the basis for their claims.

On December 9, 2015, Bill Cosby’s wife of over fifty years was served with a deposition subpoena seeking to take her deposition in January, 2016.   Although, Mrs. Cosby is not a party to the case, Plaintiff’s counsel contends that her deposition is proper because she served as her husband’s business manager and issued a public statement on her husband’s behalf.

The Federal Rules require counsel to “meet and confer” to discuss and hopefully resolve discovery disputes before filing a motion.  According to Mrs. Cosby’s motion, counsel discussed the subpoena and their disputes.  Unfortunately, those discussions did not resolve the dispute.  On December 18, 2015, Mrs. Cosby filed a motion to quash the subpoena.

Mrs. Cosby’s motion to quash makes two central arguments to stop her deposition: (1) pursuant to Massachusetts’ law, she is not permitted to testify about private communications with her husband; and (2) because she was not present when the alleged activities between her husband and his accusers took place, she does not have any information about the accuracy of the Plaintiffs’ underlying accusations of sexual assault, and any information she has about the denial of those claims would come from privileged communications with her husband.  The motion also seeks to limit questions, so as not to harass Mrs. Cosby.

In Mrs. Cosby’s motion to quash, Camille Cosby argues that she is disqualified from testifying about certain confidential communications with her husband, Bill because Massachusetts’ law protects and promotes martial communications in two ways:  spousal privilege, which is applicable in criminal actions only, and spousal disqualification, which is applicable in both criminal and civil actions.   The Federal Rules of Evidence incorporate the applicable State privilege laws.  Because the case was filed in the place where the Cosby allegedly reside the Court is likely to apply Massachusetts’ privilege law.

Based upon my experience handling complex civil litigation in both federal and state courts, I believe the Judge deciding the motion will not allow Mrs. Cosby to testify about confidential communications between the spouses.  Nevertheless, I believe that any communications which are not subject to the martial (or other) privilege will be “fair game” for the deposition.  For example, if the couple discussed the allegations with other people who are not within other categories of privileged communications (lawyers, martial counselors, etc.) then it is likely Mrs. Cosby would be required to answer those questions.  Assuming I am correct, counsel for Mr. and Mrs. Cosby will need to object to questions which seek disclosure of privileged information and instruct the witness not to answer those questions.

Martin Shkreli, the controversial CEO of Turning Pharmaceuticals, and his attorney were indicted in an alleged securities fraud scheme. On December 14, 2015, a grand jury paneled in Brooklyn, New York, returned a seven-count indictment against Martin Shkreli. Mr. Shkreli is charged with seven counts of securities fraud and conspiracy. His attorney, Evan L. Greebel is charged with a single count of wire fraud conspiracy. Greebel and Shkreli also face a United States Securities and Exchange Commission (“SEC”) civil complaint. The SEC commenced an eight-count civil suit against Shkreli, and contains a single aiding and abetting count against Greebel. Shkreli is accused of running a Ponzi scheme that allegedly funneled money from Retrophin, Inc. to deceived investors in a series of ailing hedge funds. Attorney Greebel is charged with aiding the alleged scam. Continue Reading Martin Shkreli Arrested for Alleged Securities Fraud Scheme

Last week, former University of Southern California Head Football Coach Steve Sarkisian filed a 31-page lawsuit in Los Angeles Superior Court against his former employer. The lawsuit alleges that Coach Sarkisian’s employment was unlawfully terminated. Furthermore, Coach Sakisian alleges that USC discriminated against him by not making a reasonable accommodation to address his disability – alcoholism. The former USC coach is seeking damages in excess of $30,000,000, plus the reinstatement of his employment.

Coach Sarkisian’s employment with USC was terminated on October 12, 2015, after taking an indefinite leave of absence. Coach Sarkisian took this leave of absence in order to seek treatment for alcoholism.

Alcoholism is a recognized disability under both California’s Fair Employment and Housing Act (FEHH) and the federal American’s with Disabilities Act (ADA). The law prohibits employers from discriminating against employees with disabilities that limit a major life activity. Employers are required to make “reasonable” accommodations in order to help the disabled employee overcome their recognized disability. Often Courts find that an accommodation is unreasonable if it substantially disrupts the employer’s business practice or requires an alteration to any essential job responsibilities.

Continue Reading Analyzing Coach Steve Sarkisian’s Employment Discrimination Lawsuit Against USC

Recently, the New Jersey Supreme Court decided an important case that further protects employers from disloyal or “faithless” employees. The central issue in Kaye v. Roseflelde is whether “a Court may order the equitable remedy of disgorgement of an employee’s compensation when the employee has breached their duty of loyalty to the employer, but the employer had not sustained any economic loss.” The Kaye decision is an extension of Cameco Inc. v. Gedicke, 157 N.J. 504(1999), which allowed Courts to disgorge (or give back) compensation earned if the employee caused their employer to suffer damages.

The facts of Kaye are fairly simple and straightforward. Kaye hired his former attorney, Mr. Roseflelde, to work directly for his timeshare companies. During the course of a twenty-plus day trial, Kaye was able to demonstrate that Mr. Roseflelde committed many serious acts of misconduct during working hours when he acted on his own behalf instead of his employer’s best interests.

Continue Reading New Jersey Supreme Court Holds That Trial Courts May Order the Disgorgement of “Faithless Employee’s” Compensation

Several months ago, I published a blog which discussed an important case that could affect employment discrimination litigation in New Jersey.

In summary, the New Jersey Appellate Court, in the case Rodriquez v. Raymours Furniture Company, Inc., 93 A.3d 760 (App. Div. 2014), permitted an employee to reduce the statute of limitations period for an alleged violation of New Jersey’s Law Against Discrimination from 2 years to 6 months. In that case, the Appellate Court held that the reduced statute of limitations period was set forth in conspicuous, highlighted language in the employment application.

On December 1, 2015, the New Jersey Supreme Court entertained oral argument regarding the important issue of whether or not New Jersey employers may use contractual language in order to significantly reduce the statute of limitations period. Clearly, the enforcement of a shortened statute of limitations period would eliminate some litigation. The central question for the Court is whether or not parties via contract could reduce the legislature’s enactment of a 2 year statute of limitations.

The ultimate decision of the New Jersey Supreme Court will certainly affect employment discrimination litigation in New Jersey. Moreover, if the Court upholds the reduced statute of limitations, it could possibly affect other statutes of limitations. For example, there is a 4 year statute of limitations for a goods contract and 6 year statute of limitations for a non-goods contract in New Jersey. Assuming the decision is affirmed, could parties agree to reduce the time period for which breach of contract claims could be filed?

I will continue to monitor this case and will provide updates as developments are made. Stay tuned, and continue to check out the New Jersey Law Blog for other important legal issues that may affect you, your business, and your family.

On March 17, 2015, the Appellate Division issued an important decision which provides guidance to New Jersey Trial Courts asked to judicially expel a member of a Limited Liability Company. IE Test, LLC v. Kenneth Carroll (App. Div. 2015)

N.J.S.A. 42:2B-24(b)(3) permits the expulsion of a member of a New Jersey Limited Liability Company under certain circumstances. The Appellate Division in IE Test, LLC v. Kenneth Carroll, provides a wonderful analysis of expulsion of a member based upon wrongful conduct (N.J.S.A. 42:2B-24(b)(3)(a)) or that the continued membership was not practicable to continue the business (N.J.S.A. 42:2B-24(b)(3)(c)).

The material facts of the case were undisputed and straightforward. Defendant Carroll and Mr. Cuppo were co-owners of a predecessor limited liability company, Instrumental Engineering, LLC (“IE”). Unfortunately, in or about 2009, IE was experiencing serious economic problems. As a result of those problems, Carroll and Cuppo decided that IE should file a Chapter 7 petition for bankruptcy.

According to Carroll, he purchased some of IE’s assets from the bankruptcy trustee and transferred them to Plaintiff, IE Test, LLC for $5,000, which remained due and owing to him. Cuppo refuted the same. Unfortunately, there was no documentation supporting Carroll’s contention.

IE Test, LLC had three members, Carroll (33%); Cuppo (34%) and James (33%). In addition to the disagreement relating to the $5,000, sale of assets from IE, the three members could not reach agreement as to the terms and conditions of an Operating Agreement. In addition, several of the members testified during the course of their depositions that they could not work together and did not speak with one another.

The Trial Court Judge found that IE Test, LLC could not establish that Carroll engaged in wrongful conduct that adversely and materially harmed the company. Nevertheless, the Trial Court found that pursuant to N.J.S.A. 42:2B-24(b)(3)(c), it was not reasonably practicable to continue the business with Carroll as a member. Carroll appealed the Trial Court’s decision. In its decision, the Appellate Division provided a wonderful analysis of judicial considerations when determining whether or not to expel a member.

The Appellate Court first provided guidance on the standard for judicial expulsion of a member of a New Jersey Limited Liability based upon “wrongful” conduct. Pursuant to N.J.S.A. 42:2B-24(b)(3)(a), a Court may only expel a member if it finds that the member’s conduct was “wrongful” and “actually harmed” the limited liability company in an “adverse and material manner.”

Next, the Appellate Court discussed the standard to expel a member because the continued inclusion of that member may not be practicable to carry on the business. The Court held that N.J.S.A. 42:2B-24(3)(c), does not require proof that the member committed any wrongful conduct whatsoever. Rather, subsection (c) is forward looking, only requiring proof that the member’s conduct makes it “not reasonably practicable to carry on the business if the member remained.”

The Appellate Division articulated the following seven factors when deciding whether or not to expel a member based upon the not reasonably practicable on the business statute:

  1. Whether the management of the entity is unable or unwilling reasonably to permit or promote the purposes for which the company was formed;
  2. Whether a member or manager has engaged in misconduct;
  3. Whether the members have clearly reached an inability to work with one another to pursue the company’s goals;
  4. Whether there is deadlock between the members;
  5. Whether the operating agreement provides a means of navigating around any such deadlock;
  6. Whether, due to the company’s financial position, there is still a business to operate; and
  7. Whether continuing the company is financially feasible.

The Appellate Division, applying those factors, affirmed the Trial Court’s decision expelling Carroll pursuant to N.J.S.A. 42:2B:24(b)(3)(c).