Final Project 1 - Final Draft PDF

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Allen and Mary Jane Green, Owners of Greene’s Jewelry Wholesale...

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1 Memorandum of Law, Final Project 1

Final Project Part 1 Milestone: Memorandom Susana M. Mendonca MBA 610 Business Law September 27, 2020 Professor Kathleen Plunket

2 Memorandum of Law, Final Project 1

FINAL PROJECT PAPER CHANGES FORM:

Rubric Element or Issue (Use Final Project Rubric) Legal Analysis

Operative Law Legal Prescedent

Correction Needed

Correction Made

Added more examples of pregnancy discrimination allegation cases Added more cases More examples of companies that face that demonstrate PR issues & how they companies that face PR issues and solve resolved them them. More details needed Add more details & cases More details needed Add more details & cases

Pregnancy discrimination allegations

Or, Enhancement Added (if not a correction)

3 Memorandum of Law, Final Project 1 Contents

Memo Introduction…………………………………………………………………………………………..4 Client’s Case…………………………………………………………………………………………………..…5 Facts and Laws………………………………………………………………………..5 Unlawful Termination…………………………………………………5 Contract Issues……………………………………………………………5 Laws……………………………………………………………………………6 Legal Analysis…………………………………………………7 Precedent………………………………………………………………………………..9 Precedent Cases……………………………………………………………………..10 Needed Documentation and information……………………………….11 The Application of the Law to the Facts……………………………………………………………11 Case Laws and Public Policies that concerns The Lawsuit Against Miss Lawson..12 Impact Assessment: Public Perception...………………….……………………………………….12 Impact Assessment: Damages…….…………………..……………………………………………….13 Impact Assessment: Business Practices…………….….………………………………………….14 PR Cases & Their Resolution…………………………………………………………………………….15 References…………………………………………….…………………………………………………………17

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Memorandum

To: Allen and Mary Jane Green, Owners of Greene’s Jewelry Wholesale From: Susana M. Mendonca RE: Legal Memorandum Date: September 27, 2020

I.

Memo Introduction

Jennifer Lawson, the defendant, three-year previous Junior Executive Secretary in the department of Research and Development at Greene’s Jewelry. After an executive decision to eliminate all Junior Executive Secretary positions, Ms. Lawson was dismissed. Confidentiality agreement was required upon start and end of employment. Ms. Lawson is suspected of taking documentation with detailed process for creating “Ever-Gold”, which is found to be top secret. It is believed she used this information to obtain employment with Howell Jewelry World. Howell Jewelry World is Green’s Jewelry biggest competitor. Prior to Ms. Lawson’s dismissal she advised the head of human resources Lisa Peele that she was expecting a child. Ms. Lawson is being sued for breach of contract however, there is a countersuit against Greene’s Jewelry for wrongful termination.

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II.

Client’s Case

A. Facts and Laws Unlawful Termination Jennifer Lawson’s countersuit against Greene’s Jewelry is for wrongful termination which she believes is due to her current pregnancy. Claiming violation to the Pregnancy Discrimination Act of 1978 also known as PDA. The Pregnancy Discrimination Act forbids discrimination based on pregnancy, childbirth, and any other related medical conditions. (EEOC, 2019) Unlawful termination is defined as being fired for an illegal reason, which may violate federal anti-discrimination laws or breach of contract. For example, an employee may not be terminated based on their race, gender, ethnic background, religion or disability. Employee may also not be fired if they file a legal complaint against the company or if they are discovered as a whistleblower. Such actions by the company are considered to be retaliation and illegal. (Thomas Reuters, 2020) Contract Issues Since Ms. Lawson signed a confidentiality agreement, in this document she agreed to never share any information she learned while working at Greene’s Jewelry regarding any process used and especially how to create Ever-Gold. A Non-Disclosure Agreement also known as an NDA or confidentiality agreement, is a legal contract between two parties usually an employer and their employee. This legal contract will outline a multitude of sections, such as what is considered to be confidential knowledge, material, or restricted

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information only given access to selected few within the company. Individuals that sign the Nondisclosure agreement, are essentially agreeing to not disclose any information covered within the documentation and create a specific relationship. After her termination Ms. Lawson supposedly removed one or more confidential documents that contained processes or secret products. Upon access of this confidential material Ms. Lawson used it as a bargaining chip to acquire new employment with Howell Jewelry World, Green’s Jewelry biggest competitor. Upon doing this she was considered to be in breach of contract. Laws The Economic Espionage Act of 1996 makes the theft of trade secrets is considered a federal crime. It is prohibited for an individual to participate in the theft of a trade secret with the purpose of harming the trade secret owner. The penalties for the violation of this statue can include fines up to $5 million dollars and up to 15 years in prison. While the trade secret owner can still sue it will not stop the federal government to also file criminal charges. With that being the case Ms. Lawson’s contract indicates very sensitive marketing information, along with customer lists, software, non-patented ideas techniques and other processes. This causes her action to be a breach of contract, the product involved Ever-Gold falls under the above categories and is protected within the NDA that Ms. Lawson signed. It is believed Ms. Lawson used unsavory means to retrieve access to the Ever-Gold Process to get ahead in her new position. Under New Hampshire law, a trade secret thief can be prevented from disclosure by court order, known as an injunction. There is no deadline for an injunction, it is used for however, necessary

7 Memorandum of Law, Final Project 1 for the purpose of eliminating any advantage for the purpose of deterring any misappropriation. (Richard Stim) I.

Navar, Inc. v. Federal Bus. Council The United States Defense Threat Reduction Agency was looking for a contractor to provide an event-planning service. The Plaintiff and Navar entered into a non-disclosure agreement (NDA) and a Teaming Agreement, which meant that if Navar were to get a large contract then it would work with the Plaintiff. The United States Defense Threat Reduction Agency awarded Navar, Inc the contract however, Navar did not extend subcontract to the Plaintiff. Leaving the Plaintiff with no choice they sued Navar, claiming breach of contract and trade secret misappropriation. Later a jury did find Navar to have breached the NDA and Teaming Agreement. On top of the NDA breach Navar also misappropriated one plaintiff’s trade secretes which violated Virginia Uniform Trade Secrets Act. Trial Court entered a judgement in favor of Plaintiffs in the total amount of $1.25 million. Later on the Supreme Court reversed the decision stating Navar can not be found liable for breach of contract because nothing in the Act or the NDA required Navar to use the Plaintiffs as subcontractor. Legal Analysis Pregnancy discrimination have some serious consequences for women and their families.

Women fear getting demoted, dismissed or simply not promoted because they are or have the possibility to become pregnant. The biggest concern is losing critical income, having their hours cut, and losing their health insurance. Despite existing legal protections, pregnancy discrimination remains widespread and

8 Memorandum of Law, Final Project 1 according to the most recent data there are approximately 31,000 charges of pregnancy discrimination cases that have been filed. Women in every industry are reporting pregnancy discrimination, which include industries with higher employed workers and industries with the highest female employees, such as health care, social assistance, and educational services. Health Care and Social Assistance have approximately 24% of charges, where female employees are 78.5% of the staff. Educational Services have approximately 4.1% of charges, where female employees are 68.9% of the staff. Finance and Insurance have approximately 6.2% of charges, where female employees are 55.7% of the staff. Accommodation and food services have approximately 11.1% of charges, where female employees are 52.6% of the staff. Other Services have approximately 2.4% of charges, where female employees are 51.8% of the staff. Management of Companies and Enterprises have approximately 1.2% of charges, where female employees are 49.0% of the staff. Women report pregnancy discrimination across races and ethnicities, but black women are disproportionately affected. With nearly three in 10 charges of pregnancy discrimination were filed by black women, yet black women comprise only 14% of women in the workforce are between ages 16 to 54. Women over 35 are also at a higher risk for pregnancy-related complications like pre-term labor, preeclampsia and hypertensive disorders, which can make a loss of wages and health insurance due to pregnancy discrimination especially challenging, during the fiscal years of 2011 through 2015. The following 10 regions have the highest share of charges related to the number of women in the workforce: 1. District of Columbia

6. Missouri

2. New Mexico

7. Arkansas

9 Memorandum of Law, Final Project 1 3. Delaware

8. Florida

4. Nevada

9. Georgia

5. Alabama

10. Tennessee A. Precedent The cases below will provide a beter understand of some other cases that demonstrate pregnancy discrimination allegations

I.

Sanford Heisler Sharp LLP v. Morrison & Foerster. This case involves a $100 million class-against employment discrimination lawsuit against Morrison & Foerster, one of the largest law firms in the U.S. The complaint was filed in April of 2018 on behalf of three previous Morrison & Foerster female associates. In 2019 three additional plaintiffs were added to the lawsuit. The lawsuit alleges the firm practices gender discrimination against the female lawyers, especially those with children. In the plaintiff’s experiences the female atorneys at Morrison & Foerster are continuously denied promotion or higher pay after pregnancy, childbirth or maternity leave. Once the plaintiffs each returned from maternity leave they were denied previously promised promotions and pay increases. However, their hourly rate would increase as though they had been promoted. Under the California state and federal discrimination, retaliation statutes, and equal pay the class action seeks all equitable and legal relied available.

II.

Tania Zarak v. Netflix. In April of 2019 Tania Zarak sued the company for pregnancy discrimination. She states that after she told her supervisor that she was pregnant, he began to remover her from projects and meetings. When she reported the behavior to human resources she was fired.

III.

Plaintiff v. LA Louisanne Inc. LA Louisanne, Inc., was a Los Angeles Restaurant and night club that violated Title VII of the Civil Rights Act of 1964 and Pregnancy Discrimination Act of 1978. In July

10 Memorandum of Law, Final Project 1 of 2018 LA Louisanne Inc paid a server (the plaintiff) $82,500 during the setlement. In addition to the setlement the restaurant must review & revise its discrimination and harassment policies. A server’s hours were reduced after it was discovered that she was pregnant and later removed entirely from the schedule once she gave birth. B. Precedent The cases below will demonstrate and support Green’s Jewelry’s reasoning for termination and countersuit of Ms. Lawson. I.

Apple v. Gerard Williams. This case involves Apple suing its former chief architect of iPhone and iPad microprocessors, for breach of contract. The suit states it is on the grounds that he started his own chip-design company while still working at Apple. Apple argues that Williams, who started working at the company in 2010, kept it a secret that he was already working on setting up his new business while still employed with Apple. Also argued that Williams began to recruit Apple employees for his new venture, which were not permited under his work agreement with the company. In return Williams is countersuing stating Apple’s allegations are moot because the non-compete clauses in his contract are actually a violation of California state law.

II.

Bruening Rock Products, Inc. v. Hawkeye International Trucks. This case involves the plaintiff (Bruening Rock) seeking breach of contract damages from the defendant (Hawkeye). The claim is simple the plaintiff required four trucks to haul rock from their underground mines. However, the trucks needed to be able to have a gross vehicle weight rating of $74,000 pounds, which including the weight of each truck. During the case it was discovered that the

11 Memorandum of Law, Final Project 1 trucks failed to perform at the required level. It is stated the wheel rims were cracked and malfunctioned, causing the jury to find the defendant in breach of contract.

C. Needed Documentation and information The legal team/department will need the below documentation and supporting information in order to build and support their case as they move forward. I.

Greene’s Jewelry will need a statement affidavit from the HR representative indicating if Ms. Lawson truly disclosed her pregnancy.

II.

All documentation supporting the decision & intent to terminate all the Junior Executive Secretaries within the company. i. By acquiring this documentation, it will support that there was no employee who was specifically targeted.

III.

Greene’s Jewelry will also require a subpoena to have Howell Jewelry World provide a copy of Ms. Lawson’s new employment contract. The hope is that it will show the process of EverGold was the determining factor for hiring Ms. Lawson.

IV.

Acquiring a list of female employees that have been employed while being pregnant and those who have children and still working at Greene’s Jewelry will demonstration that Ms. Lawson was not terminated due to her pregnancy.

I.

The Application of the Law to the Facts

12 Memorandum of Law, Final Project 1 The arguments Greene’s will utilize against Ms. Lawson are listed below; they vary with case precedents, regulations, and public policies. It is believed that with the usage of such, a favorable outcome supporting Greene’s would occur in court.

II.

Case Laws and Public Policies that concerns The Lawsuit Against Miss Lawson

Ms. Lawson violated a non-disclosure agreement in the first place. Ms. Lawson also violated the New Hampshire trade secret law. This law was adopted from the union trade secrets act that listed misappropriation & theft of company trade secrets. In the case of this lawsuit the most valuable asset of the company, the Ever-Gold process. This secret was ended up being shared with the competitor so Ms. Lawson could get a new position with them. Ms. Lawson’s actions are criminal and illegal and should be acted upon. In United States vs. Williams, this case involved trade secrets from Coca-Cola being shared with Pepsi by a former Coca-Cola employee. Joya Williams a former secretary for Coca-Cola was sentenced to eight years in federal prison because she worked with Pepsi to sell secrets for a $1.5 million. This case is the perfect correlation because Ms. Lawson also used her position with Greene’s Jewelry to obtain secrets and used it to obtain compensation in return. Raytheon vs. Rebarick is another relevant case, a defense contractor Raytheon was suing a former employee William Rebarick. The case was on the premises that William Rebarick stole trade secrets that he later used at his new job with the competitor Lockheed Martin and caused approximately $75,000 in damages. Although Mr. Rebarick had already resigned before delivering Raytheon’s company

13 Memorandum of Law, Final Project 1 secrets to obtain government contracts from his previous employer. In correlation with the Ms. Lawson case she gained employment from the competitor by giving trade secrets. Impact Assessment: Public Perception Public perception is a profound characteristic of any company. A business-like Greene’s Jewelry can only survive on sales; since that is the case their reputation is of the highest importance. The company’s reputation is the public perception which, goes one in one with the overall profits and stability of the company. If the actions of the company are ever unlawful the sales and livelihood of all employees would suffer tremendously. Due to Ms. Lawson’s actions, even though there has been no legal determination in this case, the public perception can cause negative results on the company. Sometimes just the rumors or the taglines from media can paint a someone or a company in a bad light. This can not be demonstrated more by Ms. Lawson’s circumstances; she was let go while being pregnant leaving her with no employment or a way to take care of her unborn child. At least in the hearts and minds of the public and maybe even a civil jury, the perception of Greene’s Jewelry’s actions be immoral. This will cause Greene’s Jewelry to be viewed negatively by currently or potential customers, if this case is taken to civil trial the judgement can and will sway public opinion which would cause negative impact on either Ms. Lawsone or Greene’s Jewelry’s life. Overall, in my opinion there is a strong chance there will be a 50/50 chance there will be sympathizers for Ms. Lawson’s circumstances. This would cause Greene’s Jewelry’s reputation, customer base, and profit margin will be in serious jeopardy. Since Ms. Lawson’s is countersuing the best course of action is for Greene’s Jewelry not to take this to trial but to setle outside of court which would minimize public perception. Impact Assessment: Damages

14 Memorandum of Law, Final Project 1 As mentioned before winning public opinion can be just as important and winning a case at trial. Any litigation against a company can be a Public Relations nightmare, which can result in damages to the operation of a company if the perception of the case goes to the individual who is countersuing. For example if the media was to get a hold of this case there could be serious backlash from women’s advocate groups which, could begin protests against Greene’ Jewelry which could take a real backlash on the company’s reputation and sales. In most cases to avoid a PR nightmare it is best to setle outside of court by higher an outside firm or mediator. Monetary setback in sales will also impact revenue within the company could also be operational damages due to Ms. Lawson’s giving trade secrets to the competitor. Impact Assessment: Business Practices Business Practices is any tactic or activity a business conducts to reach its objectives. Ultimately, a business’s objective is to make money. Business practices are the ways it atempts to do so in the most cost-effective way. A company may have rules for business practices to ensure that its employees are efficient in their work and abide by applicable laws. Companies need to make changes to their contract to avoid similar situations such as Greene’s Jewelry is in with Ms. Lawson. A company must make changes to its contracts, especially those that deal with termination of employee contracts and those that deal with medical leave and pregnant employees. Greene’s Jewelry’s HR priority should be to focus on their termination process. The other main concern and a...