Puerto Rico Supreme Court: Former Exec Cannot Sue Individual Board Members for Breach of Employment Contract

The National Law Forum

A former employee cannot sue individual members of a corporation’s board of directors for breach of an employment contract and negligence in execution of fiduciary duties, where: 1) the individual board members are not parties to the employment contract; and 2) the employee and his relatives are not shareholders with standing to sue board members for alleged breach of fiduciary duty, the Puerto Rico Supreme Court has held. Randolfo Rivera San Feliz et al v. Junta de Directores de Firstbank Corporate et al., 2015 TSPR 61, 196 DPR ___ (2015).

Plaintiff Randolfo Rivera was a former executive of a banking entity in Puerto Rico. The terms of his employment were established in a contract with the bank. The contract provided that any decision regarding the contract, including termination of employment, had to be approved by at least two-thirds of all the members of the bank’s board of directors…

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Snoop Dogg Suing Pabst Brewing Co. For A Cut Of Its Profits From Selling Colt 45

Consumerist

(amcdaniel83) (amcdaniel83) Companies love it when celebrities sign on to endorse their products, but you better believe those famous faces want to protect their paycheck when push comes to shove. That’s why Snoop Dogg is taking Pabst Brewing Company to court over the sale of the beer company’s Colt 45 line, claiming he’s owed a portion of the proceeds from that sale.

Snoop Dogg signed a three-year agreement in 2011 to shill for Colt 45’s fruit-flavored beer called Blast by Colt 45, reports the Associated Press, a deal that the breach-of-contract lawsuit says entitled him to a portion of the sale price if Pabst sold Colt 45 before January 2016.

Cut to November 2014, and Pabst announced it was being bought by an investment firm, with reports pegging the total sale price at $700 million or so.

His lawsuit is now seeking 10% of the net sales price…

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The Ongoing Debate About Adequate Consideration in Non-Competition and Other Restrictive Covenants

Labor and Employment Law - SmithAmundsen

Contributed by Carlos Arévalo

In late June, the appellate court for the first district reiterated that employment lasting less than two years is inadequate consideration to support enforcement of a post-employment restrictive covenant. In McInnis v. OAG Motorcycle Ventures, a motorcycle salesman filed a lawsuit seeking to have his non-competition agreement declared invalid because he resigned 18 months after signing the agreement. The employer counterclaimed seeking an injunction to enforce the restrictive covenant. The salesman won.Featured image

The court came to this conclusion after examining the 2013 first district case, Fifield v. Premier Dealer Services, Inc. That case has been criticized because of its emphasis on the duration of employment after the execution of the agreement, as opposed to reviewing the totality of the circumstances under the Illinois Supreme Court standard. The case involved an employee who was laid off when his employer was purchased by another company. The…

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In Maryland, is it possible to challenge or change the terms of a Will or Codicil after someone’s death?

An interested person may file caveat proceedings to challenge a particular Will or Codicil on various grounds, including lack of testamentary capacity at the time the document was executed, undue influence or fraud. There are strict time limits which apply to filing such proceedings and formal procedures must be followed. It is generally advisable to obtain legal counsel for such matters.

Protecting Digital Assets: 6 Steps to Take on Death or Incapacity

CEBblog™

ThinkstockPhotos-174474186It used to be enough for a fiduciary and her attorney to simply search through a decedent’s or incapacitated person’s papers in his or her workplace and at home, watch the mailbox for a 90 day cycle, and review tax returns and account statements. Things are more complicated now and a fiduciary must take several more immediate steps with regard to digital assets.

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Recent Delaware Law and Closely Held Business Disputes

#shareholder #oppression #litigation

Jeshua Lauka's Business and Real Estate Law Blog

I just read in the ABAJournal article that Delaware passed a law favorable to shareholders in litigation.

“A law banning corporate bylaws that impose a hefty price on investors who file unsuccessful shareholder derivative suits has been signed by Delaware’s governor.”

The Delaware legislature apparently recognizes  the challenges that minority shareholders can face in closely held businesses.

In my practice, one fundamental challenge that I have seen is this:

In a closely held company it is very easy for one group of owner[s] to freeze out another owner.

I guess the first question is, “freeze out from what*?”

                         Control – Decision-making

                         Disclosures of Company Business

                         Profits in the Company

                         Employment in the Company.

What should a business owner/operator do to protect himself/herself?

Well, you have two readily apparent choices – address the issue before the business is formed, or address it once the problem arises.

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Noncompete Agreements Should Explicitly Limit Geographic Scope and Activities

ColTex Business and Employment Law Blog

In most jurisdictions, including Texas, to be enforceable a noncompete agreement must be reasonable in the scope of its geographic limitation and in the scope of activity restrained. Much litigation has arisen concerning whether specific geographic and/or activity limitations were reasonable under certain circumstances. But what if the noncompete agreement is silent?

A recent 8th Circuit decision, applying Arkansas law, upheld judgment on the pleadings against an employer whose noncompete agreement failed to set forth its geographic scope or the scope of activities proscribed. The noncompete agreement provided:

COVENANT NOT TO COMPETE: The Employee agrees that during the term of this Agreement, and for two (2) years following termination of this Agreement by the Company, with or without cause; or, for a period of two (2) years following a termination of this Agreement by the Employee, the Employee will not directly or indirectly enter into, be employed by or…

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Access to Client Lists May Warrant Litigation Over Noncompete and Nonsolicitation Agreements

ColTex Business and Employment Law Blog

With increasing job mobility, lower profit margins and heightened competition, and the ease of access to confidential information, more companies across various industries require their employees to execute non-compete and/or non-solicitation agreements. Employees may still retain the ability to move jobs but they may be restricted in their performance of those new positions, particularly when moving to a competitor in the industry.

On April 13, 2015, Citibank initiated litigation in New York to prevent a former vice president of its private banking division, Citi Private Bank, from using its client information to solicit business in his new position with one of its direct competitors. Citibank argues in its lawsuit that the former vice president, Mourra, is improperly utilizing confidential information, namely client lists and contact information, to reach former clients and solicit them to move their business to his new company. In this case, the conduct allegedly runs afoul of…

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