Boston Business Litigation Lawyer Blog

Non-solicitation agreements generally prevent employees from soliciting business from the employer's customers after the employee's employment has ended. In a recent decision from the Massachusetts federal district court, an ex-employee argued that he was not in violation of his non-solicitation agreement with his former employer if the former employer's clients were the parties to initiate the first contact with the ex-employee at his competing employer's company. Judge Woodlock rejected that argument.

In Corporate Technologies, Inc. v. Harnett, Harnett had worked as a salesman for Corporate Technologies, Inc. (CTI), an information technology solutions company, before leaving CTI to work for CTI's competitor, OnX USA, LLC (OnX). When Harnett first joined CTI, he signed a Non-Disclosure and Non-Solicitation Agreement in which he agreed to not divulge confidential information he learned while employed at CTI and to not solicit business from CTI's customers for one year following the termination of his employment with CTI. Specifically, Harnett was precluded from "directly or indirectly, alone or as a partner, officer, director, employee, independent contractor, [etc.] ..., solicit, divert or entice away existing customers or business of [CTI]."

On Harnett's first day at OnX, OnX sent an announcement about Harnett's new position to more than one hundred potential clients, which included Harnett's eight most active clients at CTI during the previous year. Four of those CTI clients responded to the announcement, and Harnett met with those clients to discuss and encourage their business with OnX. At least one of those four clients entered into an agreement with OnX for its services. Additionally, Harnett made efforts to secure a pricing discount arrangement with vendors in an effort to acquire the business of two more of those four clients.

CTI brought a lawsuit against Harnett and OnX, claiming that these actions were violations of Harnett's Non-Disclosure and Non-Solicitation Agreement, and sought a preliminary injunction to prevent Harnett from doing business with clients he had worked with at CTI. Harnett and OnX argued that, although Harnett had open business dealings with his former CTI clients, his interactions with those clients were not a violation of the agreement. They argued that, as long as the clients were the first to contact Harnett, the resulting business discussions could not constitute solicitation.

Judge Woodlock disagreed, labeling this argument as "an arbitrary distinction," and noting that Harnett's actions fell squarely within the agreement's description of prohibited activity. Judge Woodlock explained: "Since leaving CTI and joining OnX, [Harnett] has actively pursued business from these companies, seeking to convince them to do business with OnX. This necessarily involves solicitation - by encouraging the companies to purchase products and services through OnX - as well as enticement - by offering incentives to do so, such as better pricing, purportedly better products and services, and whatever other comparative advantage Harnett, as a salesman, would customarily use to attract clients to his new company. Neither the plain meaning of the word solicit, nor the plain meaning of the word entice requires some kind of first contact."

The court also pointed out that "Massachusetts courts do not draw a bright-line distinction between those actions following first contact by the client and those following first contact by the employee." It is true that a non-solicitation agreement will not prevent a company from receiving business initiated by the client, if there has been no direct or indirect participation in encouraging that business by the individual employee bound by the agreement. "However, this narrow carve-out from a non-solicitation agreement for receiving business does not allow a salesman to take active steps to persuade the client and actually solicit its business."

Here, as Judge Woodlock observed, Harnett and OnX together actively pursued Harnett's former clients at CSI, soliciting, encouraging, and attempting to persuade them to bring their business to OnX. This violated Harnett's agreement with CSI. Finding that CSI was likely to succeed on the merits of its claims against Harnett and OnX, and that CSI would suffer irreparable harm in the absence of injunctive relief, Judge Woodlock granted the injunction, enjoining Harnett from doing business with his former CSI clients for a period of one year, in accordance with the terms of his Non-Solicitation Agreement.

Last week, the Massachusetts Supreme Judicial Court (SJC) highlighted the importance of grammar to contract interpretation, proving that disregard for our elementary school lessons when drafting agreements can lead to liability where it was not otherwise expected.

In DeWolfe v. Hingham Centre, Ltd., the defendants - a real estate agency and its broker - listed a certain property for sale, advertising the property as "zoned as Business B," and providing a copy of the relevant zoning ordinance at the property location. The plaintiff, who had been searching for a location to open a six-station hair salon, saw the defendants' listing for the subject property, as well as the zoning ordinance made available at the property. Because the operation of a hair salon would have been a permitted use at a property zoned as "Business B," the plaintiff made a written offer to purchase the property. Thereafter, the plaintiff executed the defendants' standard form purchase and sale agreement. The agreement contained the following clause, titled "Warranties and Representations":

"The BUYER acknowledges that the BUYER has not been influenced to enter into this transaction nor has he relied upon any warranties or representations not set forth or incorporated in this agreement or previously made in writing, except for the following additional warranties and representations, if any, made by either the SELLER or the Broker(s): NONE."

Shortly after the transaction closed, the plaintiff learned that the property was zoned as "Residential B," rather than "Business B," and that a six-station hair salon was not among the permitted uses of the property. The plaintiff sued the defendants, alleging misrepresentation and violation of the Massachusetts Consumer Protection Statute. The defendants, however, relied upon the "Warranties and Representations" clause in the purchase and sale agreement, arguing that the clause relieved them of any liability for prior misrepresentations.

The SJC disagreed. Turning to both the standard rules of contract interpretation and the standard rules of grammar, the SJC concluded that the clause permitted the plaintiff to rely upon prior written representations, made by either the seller or the broker, that were not set forth or incorporated in the agreement.

First, in applying standard rules of grammar, the SJC examined the phrase "nor has he relied upon any warranties or representations not set forth or incorporated in this agreement or previously made in writing." Specifically, the SJC focused on the adverb "not" as it appeared before two phrases linked by the conjunction "or," noting that under such circumstances, the word "not" is applied to both such phrases. Thus, the SJC interpreted the clause to mean that the buyer has not relied upon any warranties or representations that (1) were not set forth or incorporated in the agreement, and (2) were not previously made in writing. The defendants' representation that the property was zoned as "Business B" was not a representation set forth in the agreement, but it was previously made in writing. Because the representation did not meet both conditions, the clause did not preclude the plaintiff from relying upon it.

Moreover, the SJC noted that, to interpret the clause as preventing reliance on any representations that were not expressly contained in the agreement, regardless of whether those representations had been made in writing, would render the phrase "or previously made in writing" meaningless, because the clause would have the same meaning with or without that phrase. Because it is a basic rule of contract interpretation that every word be given effect whenever reasonably practicable, the SJC rejected this alternative interpretation.

Following this analysis, the SJC concluded that the clause did not shield the defendants from liability for the written misrepresentations made prior to execution of the purchase and sale agreement. Though it may well have been the defendants' intent to shield themselves from such liability, the language selected to accomplish that result, when closely scrutinized, failed to do so.

This case had commenced in November 2006. After more than six years of attorneys' fees and other litigation costs, including visits to the Massachusetts Appeals Court and the SJC, the defendants now face the possibility of a trial and a judgment against them. With the appropriate use of words and grammar and a strong understanding of the rules of contract interpretation, a well-drafted "Warranties and Representations" clause could have avoided this result.

Arbitration Language in Employment Contract Held Permissive, Not Mandatory

A New York employee brought an employment discrimination claim against his Massachusetts employer in federal court in New York. Despite the ongoing federal case, the employer filed a complaint in Massachusetts Superior Court, alleging that the parties were compelled by the language of the employee's employment agreement to arbitrate the discrimination dispute. Parker Scheer was retained to handle the Massachusetts action.

Parker Scheer successfully argued that the language of the employment agreement's arbitration clause, which stated that "the parties have the choice to arbitrate" claims arising out of or relating to the employment agreement, was permissive rather than mandatory language. The superior court held that the language merely gave both parties the option to arbitrate; it did not rise to an agreement to arbitrate. Because the employee opted not to arbitrate and instead to file his claim in the federal district court in New York, the parties could not be compelled to submit the matter to arbitration. Upon Parker Scheer's motion, the court dismissed the employer's Massachusetts court action.

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$1.45 Million Settlement in International Breach of Contract Case

Parker Scheer represented its client, a foreign multi-national business, as the claimant in an arbitration of its claims against the respondent, an American company. The claimant alleged that the respondent agreed to manufacture and timely deliver to the claimant certain security screening equipment that met the technical and functional specifications provided to the respondent. However, the delivery of the respondent's equipment was significantly delayed, and the equipment was out of compliance with the specifications and unable to integrate with the security screening system in place at the delivery site, all in violation of the parties' contract.

Less than eight months after commencing arbitration proceedings in an international forum, the parties reached a settlement with a value of $1.45 million in favor of Parker Scheer's client.

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$33,750 Judgment Obtained in Full Recovery of Deposit

Parker Scheer represented its client in the client's attempt to purchase the assets of a local restaurant and club. Pursuant to the client's offer and the parties' execution of an asset purchase agreement, the client made a deposit on the purchase in the amount of $33,750. Prior to closing the transaction, the seller breached a number of provisions of the agreement. Accordingly, the client duly terminated the transaction, and demanded return of its $33,750 deposit, pursuant to the terms of the agreement. The seller refused to release the client's deposit.

Parker Scheer filed suit on behalf of their client against the seller on the grounds that the seller breached the parties' agreement. Parker Scheer obtained a judgment against the seller for the return of the full amount of the deposit to their client.

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Unpaid Commissions Recovered in Full

During his employment, Parker Scheer's client earned commissions in the amount of $10,000 as a result of the business that he brought to his employer during the fourth quarter of 2012. Following his resignation from employment, the employer refused to pay the client these commissions, in violation of the Massachusetts Wage Act.

On behalf of its client, Parker Scheer successfully recovered the full amount of unpaid commissions from the employer, short of filing suit.

In a February 2013 decision, the Massachusetts Appeals Court declined to vacate an arbitration award, which the defendant claimed resulted from the arbitrator's error of law.

A dispute arose between Daniel McDonough and Kevin McDonough, each of whom owned one-half of the stock in McDonough Electric Construction Corporation ("MECC"). Both Daniel and Kevin had entered into a "Cross Buy-Sell Agreement" ("CBSA") relative to the stock. The CBSA contained an arbitration clause that required the parties to arbitrate any controversy or claim arising out of or relating to the CBSA.

Daniel filed suit seeking dissolution of MECC, and claimed that Kevin had breached his fiduciary duty to Daniel and the covenant of good faith and fair dealing. Kevin counterclaimed against Daniel with claims for specific performance of the CBSA, Daniel's breach of the covenant of good faith and fair dealing, and Daniel's breach of the CBSA. Because Kevin's counterclaims fell within the scope of the CBSA's arbitration clause, the court ordered that those counterclaims be submitted to arbitration. Daniel's direct claims against Kevin, however, stayed in the superior court.

The arbitrator found in favor of Kevin on his counterclaims against Daniel. The superior court affirmed the arbitrator's award, and dismissed Daniel's claims against Kevin. Daniel appealed, claiming that the arbitrator had exceeded her authority by construing the CBSA in a way that, according to Daniel, constituted a rewriting of the CBSA.

The Appeals Court noted that, under established Massachusetts law, even if the arbitrator committed an error of law, a court may not disturb an arbitrator's award. Moreover, even if the arbitrator's construction of the CBSA was erroneous, that would not mean that the arbitrator's action was beyond her authority. Instead, according to the Appeals Court, "[i]t would only mean that one of the risks to which Daniel subjected himself when he bargained for and agreed to the arbitration clause - the risk of a legal or factual error by the arbitrator, with no mechanism for substantive review by a court - came to fruition."

Accordingly, the Appeals Court upheld the superior court's affirmation of the arbitrator's award. However, the Appeals Court reinstated Daniel's claim against Kevin for breach of fiduciary duty, which alleged, among other things, that Kevin usurped the control and management of MECC, that Kevin made use of corporate assets for his own personal use, and that Kevin had attempted to force Daniel out of the corporation. Because the arbitrator's findings did not address Daniel's rights as a shareholder at the times relevant to this claim, the Appeals Court held that dismissal of that claim was inappropriate.

A Massachusetts U.S. District Court recently found that the letter of intent between the plaintiff and defendant was only an agreement to negotiate a deal, and not an enforceable contract for the defendant to purchase technology from the plaintiff, As such, the court granted the defendant's motion to dismiss.

Balolia, the defendant and president of Grizzly Industrial Inc., contacted Butler, the plaintiff, regarding purchasing his company, Whirlwind Technology. Though Balolia rejected Butler's initial sale offer, the two men began negotiating. Two years later, the parties signed a Letter of Intent which contained all the material terms, including the sales price, for inclusion in a subsequent purchase agreement. The Letter of Intent also specified that it was governed by the laws of the state of Washington.

After signing the Letter of Intent, Balolia's counsel determined that the relevant patents held a much greater risk of litigation than originally anticipated. So Balolia requested a further reduction in the purchase price, and proposed an entirely different deal. Butler rejected the new terms, then filed suit against Balolia, alleging several causes of action, including breach of contract, breach of implied covenant of good faith and fair dealing, specific performance, and a violation of Mass. Gen. Laws ch. 93A. Balolia moved to dismiss the case. The parties' Letter of Intent expired shortly after the commencement of the lawsuit, without consummation of the contemplated transaction.

Because this private dispute did not implicate any Massachusetts public policy, the district court honored the Letter of Intent's Washington choice-of-law provision. The court observed that, under Washington law, an agreement to agree, which is "an agreement to do something which requires a further meeting of the minds of the parties and without which it would not be complete," is unenforceable. Additionally, the court noted that "there is no 'free-floating' duty of good faith and fair dealing that is unattached to an existing contract."

In applying this law to the Letter of Intent, the court found that the Letter of Intent "clearly contemplate[d] a future purchase agreement after additional negotiations." The court then concluded that the parties merely entered an agreement to agree, and because they did not ultimately agree, there was no contract to enforce.

As evidenced by a 2011 Massachusetts Superior Court decision involving the Winklevoss twins, the law relative to an "agreement to agree" is substantially similar in Massachusetts. In the Winklevoss case, however, the court concluded that the alleged "agreement to agree" did in fact contain all of the material terms of the parties' agreement. Accordingly, the document was sufficient to form a valid contract.

If you or a family member require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

In a recent Massachusetts Appeals Court decision, the court held that an agreed memorandum is binding upon the parties where there is sufficient evidence to detail the terms of the agreement.

In 2001, Rick Kaskel was hired by Texas Roadhouse Holdings, LLC, a national restaurant chain, to oversee the development of new restaurants. According to the employment agreement entered into by Kaskel and the company, in exchange for investing $50,000 in Texas Roadhouse, Kaskel would be paid a base salary, bonuses, and stock options. Kaskel obtained the $50,000 from a business acquaintance, John Dennis. When Kaskel attempted to pay the monies back as a loan, Dennis sued arguing that Kaskel specifically agreed to pay Dennis a set percentage of any bonuses and stock options that Kaskel received from Texas Roadhouse.

After a bench trial, the trial court ruled in favor of Dennis and awarded him damages. The judge found that Kaskel expressly agreed (both orally and in writing) to the specific terms that Dennis had included in a memorandum he sent to Kaskel on the same day that Dennis advanced the first payment of $25,000. Citing McCarthy v. Tobin,429 Mass. 84, 88 n. 3 (1999), the judge ruled that "[w]here the parties have agreed to all material terms during preliminary negotiations, the fact that they also agreed to execute a subsequent formal instrument does not preclude the finding of a binding contract."

Kaskel appealed the decision to the Massachusetts Appeals Court, but was unable to show any error on the part of the trial judge. Accordingly, the Appeals Court affirmed the ruling.

If you or a family member require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

A recent decision from the United States First Circuit Court of Appeals held that franchisees who do not sign a franchise agreement containing an arbitration clause will nonetheless be required to arbitrate disputes arising from the franchise relationship if the requirement to arbitrate can be assumed from an arbitration agreement among the franchise and predecessor franchisees.

In Awuah v. Coverall North America, Inc., Coverall, a company that provided commercial janitorial cleaning services, expanded its business by offering franchises to individuals who met the company's qualifications. Franchisees were required to sign a Franchise Agreement which contained a clause requiring the arbitration of all disputes arising out of or relating to the Franchise Agreement or the franchise relationship between the parties. The Franchise Agreement also gave franchisees the right to sell their franchise. Upon sale, the new franchisees were required to sign a Consent to Transfer Agreement, which did not contain an arbitration clause.

A group of franchisees sued Coverall for breach of contract, misrepresentation, deceptive and unfair business practices, misclassification as independent contractors, and failure to pay wages. The United Stated District Court, District of Massachusetts held that any of the franchisees who had purchased a franchise under a Consent to Transfer Agreement (and who had therefore not signed a Franchise Agreement) were not bound to arbitrate under the Franchise Agreement's arbitration clause, and could proceed with the litigation. According to the district court, because such franchisees did not sign a Franchise Agreement, they did not have notice of the arbitration provision.

Coverall appealed this decision, and the First Circuit reversed it in Coverall's favor.

According to the First Circuit's decision, it is true that an individual may not be bound to an arbitration clause if he does not have notice of it. However, Massachusetts law allows a contract to be "enforced by or against nonparties to the contract through assumption if the language used in a contract to incorporate extrinsic material by reference clearly communicates that the reference is to incorporate the referenced material into the contract."

Some of the Transfer Agreements between the original franchisees and the new franchisees provided that the new franchisees "succeed to all of Franchisee's rights and obligations under Franchisee's Janitorial Franchise Agreement," or that the new franchisees "become liable with the Franchisee for all of the obligations imposed by the Janitorial Franchise Agreement." According to the First Circuit, this referential language was sufficient to give the new franchisees notice of the arbitration clause contained within the Franchise Agreement. Accordingly, the new franchisees would be bound to the arbitration clause, and would be required to arbitrate - rather than litigate - their claims against Coverall.

If you require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

AngioDynamics developed, manufactured, and sold medical devices. Biolitec, a subsidiary of Biolitec AG, produced photosensitisers and developed and manufactured diode lasers, optical fibers, and medical accessories. In 2002, Angio and Biolitec entered into a Supply and Distribution whereby Biolitec agreed to defend and indemnify Angio against any third-party patent infringement claims arising out of the marketing and distribution of Defendants' products. However when Biolitec and AG failed to reimburse Angio for settlement and defense costs that Angio incurred defending itself against several third party claims, Angio sued. In September 2012, the U.S. District Court for the Northern District of New York entered a judgment against Biolitec and AG, and awarded Angio $16.5 million in partial damages.

After the New York action, Angio discovered that AG planned a merger with its Austrian subsidiary such that the subsidiary would end up with all assets and liabilities previously held by AG. Angio then filed a motion for a TRO and Preliminary Injunction to bar this merger. It was granted pending a final hearing. Despite the injunction, however, AG went ahead with a shareholders' meeting where the merger was approved and over $18 million in assets was transferred. AG then filed a Motion for Reconsideration of the TRO and preliminary injunction, or in the alternative an evidentiary hearing. The U.S. District Court for the District of Massachusetts denied the motion.

According to the Massachusetts court, "A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter v. Natural Resources Defense Council, 555 U.S. 7, 20 (2008). As laid out below, a series of undisputed facts provided sufficient support for Angio's motion for preliminary injunction.

1. Angio had a substantial judgment against Biolitec and AG.

2. Biolitec and AG moved substantial monies from their company to the Austrian subsidiary while the New York litigation was pending.

3. If AG was allowed to shift its assets to Austria, the litigation becomes pointless since a U.S. commercial judgment cannot be enforced in Austria.

4. Sufficient evidence was been presented from a corporate insider to validate that AG moved the funds to avoid paying the judgment.

The case was ordered to proceed, subject to the injunction.

If you require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

The U.S. District Court for the District of Massachusetts recently denied a preliminary injunction to a pathology laboratory which had hoped to hold former employees to restrictions in their employment agreements.

Dr. Thomas Horn and Dr. Lisa Cohen owned and operated a dermatopathology laboratory called Metroplex Pathology Associates. In 2007, the two doctors sold the dermatopathology company for $80 million. As part of the sale, the two doctors agreed to several restrictive employment covenants, including a covenant not to compete directly with the buyers, a covenant to not disparage the buyers, and covenants to not solicit or hire former employees of the business. The doctors continued to work for the new buyers.

When the two doctors became disenchanted with how the new buyers were running the business, they left and began working for a pathology laboratory--MGPO Dermatopathology Associates--operated by a local hospital. MGPO offered the same specialized pathology laboratory services that the doctors' old dermatopathology company had, and was designed to compete directly with their old company. Once at MGPO, the doctors also hired three of their former employees to work with their new pathology company.

The buyers sued the two doctors for breach of their employment agreements. The buyers also sued MGPO for tortious interference, alleging that MGPO was using confidential information that Horn and Cohen covenanted to keep confidential. The buyers moved the U.S. District Court to enter a preliminary injunction enjoining the parties from using confidential information and competing with their company in violation of the doctors' employment agreements.

In denying the motion for a preliminary injunction, the court held that the buyers had failed to proffer sufficient evidence that the two doctors had violated any of the restrictive provisions in their employment contract. The buyers could not provide evidence of any occasions where the doctors had disclosed or used any confidential information from their previous business. Additionally, the buyers provided no evidence that the Horn and Cohen had disparaged their former company. Regarding MGPO, the court noted that the buyers again failed to show that the local hospital had intentionally interfered in any way with the buyer's contractual relationships with the physicians.

If you or a family member require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

Though David defeated Goliath, in truth it is believed that the "little guy" always loses. While a recent win by Goldman Sachs in a Boston courtroom seems a win for Goliath, it may also be a preemptive roadmap for future Davids.

The case is rather complex with many different players. In basic terms, James and Janet Baker created speech recognition technology which they sold through their company, Dragon Systems. In 2000, the Bakers sold Dragon Systems to Lemout & Hauspie, a Dutch company, for almost $600 million in Lemout stock. Goldman Sachs, the investment bank for the sale, received a fee of $5 million. After the sale, the Bakers discovered that Lemout had cooked their books by creating bogus customers, booking transactions with shell companies, and recording loans as sales. In essence, the Lemout stock was worthless.

The Bakers sued Goldman Sachs for breach of various legal obligations, alleging Goldman Sachs used an unsupervised, inexperienced team on the sale, failed to exercise due diligence to discover Lemout was a sham, and if they did have knowledge of Lemout's fraud, Goldman Sachs failed to disclose it to the Bakers.

A jury sided with Goldman Sachs, rejecting the Bakers' claim that the investment bank failed to properly vet Lemout.

During the 19 day trial, Goldman Sachs presented witnesses who testified that the Bakers and Dragon Systems personnel were focused on "speed and certainty" to get the sale closed. When Goldman Sachs informed the plaintiffs that Lemout's declining sales and cash-flow problems warranted a comprehensive accounting of Lemout, the Bakers declined. According to the jury, the evidence more than proved that the Bakers breached their fiduciary duty to their Dragon Systems co-founders as well as made negligent representations about the deal to Dragon Systems' Board of Directors.

Though the verdict relieved Goldman Sachs of a potential $600 million liability, it is expected that the Bakers will appeal.

Dragon Systems founders have sued other companies involved in the Lemout sale and received more than $70 million in settlements. Baker v. Goldman Sachs & Co.

If you or a family member require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

In a recent case, the Massachusetts Commission Against Discrimination (MCAD) awarded $20,000 to a female server who filed a complaint against her employer for sexual harassment and unlawful discharge.

Julie Coburn and Christopher Tilley were servers at Bella Notte, an upscale Massachusetts restaurant. Dmitri Vlasenko was a busboy.

During the more than six years Coburn worked at Bella Notte, Coburn alleged that Vlasenko called her "hot," made various sexual requests and sexual comments to her, and touched her body in an unwanted manner.

When Coburn complained to the restaurant owner, the owned seemed to dismiss the allegations as horseplay. When Coburn threatened to contact a lawyer if Vlasenko's behavior continued, the owner assured her that he would speak to Vlasenko and would terminate him if he made any more offensive comments.

About one month later, Vlasenko made additional sexual comments in Coburn's presence, causing her to become upset, begin to shake, cry, and be unable to perform her job the remainder of the evening. When she again complained to the restaurant owner, he responded that the sexual comment was not directed toward her, that he could not control what Vlasenko said while intoxicated, and that he could not fire Vlasenko before the busy Christmas season because he was a hard worker and would be difficult to replace. However, the owner assured Coburn that she would not have to work with Vlasenko again.

When Vlasenko was again present when Coburn arrived at work, Coburn again became physically and emotionally uncomfortable and complained. The owner fired Vlasenko. However, two years later, the owner rehired Vlasenko. When the owner refused to let Vlasenko go, Coburn quit and filed a complaint with the MCAD.

The MCAD hearing officer concluded that "the conduct of Vlasenko, including unwelcome touching and sexually offensive comments to Complainant that caused her to alter her route to avoid him at work, caused her to cry and to have difficulty performing her duties, such as carrying trays, created a hostile work environment for Complainant that interfered with her work performance. Since Vlasenko was not a supervisor, respondent, Bella Notte, is liable for his offensive conduct only if it knew or should have known of the harassment and failed to remedy the situation. ... In this case the credible evidence was that Respondent, through its owner ..., was aware of Vlasenko's conduct."

Additionally, the MCAD hearing officer found that Coburn was constructively discharged, "because the evidence proves that her working conditions were so intolerable that a reasonable person would have felt compelled to resign." M.C.A.D., et al. v. Cuca

If you or a family member require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

Jill Colter suffered from brain cancer, which she disclosed to the plaintiff Clay Nissan before she was hired. Three weeks after she returned from a medical disability leave she was fired. According to Clay Nissan, the firing was for reasons wholly unrelated to her sickness. According to Jill's brothers, the defendants, Jill was fired because of her cancer. So the brothers did what most brothers do when they feel a sister is being bullied - protect their sister.

The Colter brothers started a ""Boycott Clay Nissan" Facebook page which had a related online petition that referenced a Facebook page. They also later started a Twitter account. All the online sites urged potential customers not to do business with Clay Nissan, and stated that Clay Nissan had a policy or practice of discriminating against cancer patients and were unethical. Any favorable comments posted to the sites about Clay Nissan were deleted by the Colter brothers.

The plaintiffs, who included Clay Nissan, its parent, and related corporations, sued the Colter brothers for defamation and intentional interference with advantageous relations.

The defendants filed a motion to dismiss on the ground that their activities and statements were protected by the anti-SLAPP statute because they were advocating on their sister's behalf to raise public awareness about the termination of Jill's employment by the plaintiffs and give their sister leverage for an employment discrimination suit against the plaintiffs.

The anti-SLAPP statute applies to civil claims that are based on a party's "exercise of its right of petition under the constitution of the United States or of the commonwealth ... petitioning includes all statements made to influence, inform, or at the very least, reach governmental bodies-either directly or indirectly." G.L. c. 231, § 59H. Speech and other communicative activities that are not made to influence, inform, or reach public officials are not protected by the anti-SLAPP statute. The Cadle Co. v. Schlichtmann, 448 Mass. 242, 250-252 (2007). This speech that is intended to achieve a purely commercial result, such as increasing demand for one's services.

The court held that the Colters' activities online and using social media to punish or pressure plaintiffs by organizing a boycott of a car dealership and by making, eliciting, and sharing comments critical of the plaintiffs' alleged employment policies, practices, and actions toward the Colters' sister were not an exercise of the Colters' right to petition government and thus are not protected by the anti-SLAPP statute. The defendants' motion to dismiss was denied.

If you or a family member require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

The Massachusetts Supreme Judicial Court ("SJC") has held that a term contained in a franchise agreement providing for a shorter statute of limitations period for the parties to bring claims against one another under the agreement was enforceable and valid where the parties negotiated in good faith, and where the new limitations period was reasonable and did not violate public policy or any other statutory provision.

In Creative Playthings Franchising, Corp. v. Reiser, the defendant had purchased a Creative Playthings franchise. The parties executed a franchise agreement which included a clause in which they agreed that neither party would bring any claim against the other after the expiration of either one year from the date of the discovery of the facts that give rise to the claim (or, if earlier, one year from the date that the facts should have been discovered with reasonable diligence), or eighteen months after the date of the first act or omission that gave rise to such a claim. The clause also stated that any action or claim brought after these periods had expired would be barred.

Five years later, Creative Playthings terminated the franchise agreement, claiming that the defendant had violated certain terms of the agreement. Creative Playthings then sued the defendant in U.S. District Court for, among other claims, breach of contract and trademark infringement. The defendant filed a counterclaim alleging breach of the implied covenant of good faith and fair dealing, fraudulent inducement, violations of G. L. c. 93A. Creative Playthings asserted that these counterclaims were time barred under the limitations provision in the franchise agreement. The U.S. District Court certified to the Supreme Judicial Court the question of whether contractually shortened statute of limitations periods are generally enforceable under Massachusetts law.

In its analysis, the SJC observed that Massachusetts General Laws c. 260, § 2 establishes that a cause of action based on contract must be brought within six years. However, Massachusetts courts have long allowed a shorter limitations period in particular circumstances if it is shortened by contractual agreement. Albrecht v. Clifford, 436 Mass. 706, 717-718 (2002); Cunningham Leather Co. v. American-Hawaiian S.S. Co., 285 Mass. 232, 234-235 (1934); Bowditch Mut. Fire Ins. Co., 6 Gray 596 (1856).

The SJC noted that the franchise agreement between the parties was negotiated in good faith, and its belief that the limitations periods set out in the agreement were reasonable. The Court also noted that, because the certified question did not include an inquiry as to whether the limitations periods as written violated the discovery rule, the SJC would not consider the issue. However, the SJC suggested that, if the limitations periods did violate the discovery rule, the shortened limitations periods contained in the franchise agreement would violate public policy.

If you or a family member require legal advice on a business matter, please contact Parker | Scheer LLP for a free consultation with one of our experienced Business Law and Business Litigation Lawyers.

The defendant, Said Abuzahra, hired the plaintiff, Hancock Survey Associates, Inc., to develop plans for the installation of an access road on the defendant's property. After the plans were developed, the defendant felt the steepness of the access road was unsatisfactory and requested the plaintiff to make changes to the plans. Hancock made the requested changes. However, when the survey company requested payment from the defendant, the defendant refused to pay the additional cost incurred by Hancock in changing the plans.

The plaintiff sued the defendant for breach of contract.

At trial, the plaintiff presented evidence to support that the defendant was not satisfied with the steepness of the access road for the property and requested changes to the concept plan through the testimony of one of its engineers. Vaclav Talacko, a registered professional engineer and a principal of Hancock, testified that during the course of the project issues arose regarding the grade of the land and whether it could accommodate the original plan requested by Abuzahra. When these issues were discussed with the defendant, the defendant then asked the plaintiff to prepare development options that were better suited for the property. Hancock also presented the plans showing the original concepts and the concept changes.

The defendant conceded that he had requested the changes. However, he argued that he was not liable for the additional costs incurred to change the plans because he and Hancock did not put the modification in writing. Under the terms of the parties' contract, "any modifications to this Agreement shall be in writing and signed by authorized representatives of the parties."

The trial judge ruled in favor of the plaintiff, Hancock Survey. It is "a settled principle of law is that the mode of performance required by a written contract may be varied by a subsequent oral agreement based upon a valid consideration. Siegel v. Knott. Furthermore, a provision that an agreement may not be amended orally but only by a written instrument does not necessarily bar oral modification of the contract if the mutual agreement on modification of the requirement of a writing may ... be inferred from the conduct of the parties and from the attendant circumstances of the instant case."

Abuzahra appealed. The Appellate Court of the Northern District affirmed the trial court's decision. Hancock Survey Associates, Inc. v. Abuzahra.

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In Harlan Laboratories, Inc. v. Campbell, the defendant worked as a regional sales manager for a company that provided laboratory animal test products and services to various medical and scientific entities. When the defendant left the company to work for a competitor, the company sued the defendant, claiming that he had violated the noncompetition agreement he had signed with the company, and sought a preliminary injunction to prevent him from violating the noncompetition agreement. To secure the injunction, the burden of proof was on the company to show that the defendant had access to valuable and/or confidential information that would be of value to a competitor.
The company presented evidence that the defendant had access to the company's valuable and confidential information, which included customer accounts, inventory reports, pricing data, revenue data, strategic planning, and marketing strategies. Further, the company presented computer records that showed that prior to leaving the company, the defendant downloaded onto a flash drive thousands of pages which contained company documents. Finally, it was shown that after taking this information the defendant later used the company's client information, various reports, and PowerPoint presentations for select customers, to work on a project for his new employer. Because the defendant allegedly lost the flash drive, the flash drive could not be presented at the injunction hearing.
The district court held that "the noncompetition agreement is reasonable in light of the narrow and competitive nature of the industry, the substantial overlap between services and products provided by the named direct competitors, and the legitimate interest in protecting sales information useful to the two competing companies. ... [since the defendant had a] clear understanding of what conduct is prohibited' by this agreement." The court then concluded that the company had made a successful showing of its likelihood of success on the merits of the non-compete claim, as well as the potential for irreparable harm.
Accordingly, the court issued a preliminary injunction preventing the defendant from working for a company that directly competes with the plaintiff in specific areas.