Referring to Former Boss as Slimebag Does Not Constitute Disparagement, At Least in Ohio

 

In Ohio Education Association v. Lopez, 2010 Ohio App. LEXIS 4272 (Ohio Ct. App.  Oct. 19, 2010), available here, the Court of Appeals of Ohio for the 10th Appellate District held in a breach of contract case that the underlying contract, a separation agreement, had not been violated even though it contained a non-disparagement clause and even though the defendant, Lopez, referred to his former boss as a “slimebag.”  The court found that this was not a material breach.  Further, the court seemed to suggest that, because Lopez’s conversation (actually a voicemail message) was directed to someone whom he “thought” was a friend, this was apparently a no harm-no foul situation.  Looking at various dictionaries, a “slimebag” is defined as a scuzzbucket,  a scuzzbag, a disagreeable person, an unpleasant person; a creep, a sleazebag, a crud, a degenerate, a deviant, a dirtbag, and a dirtball.  While the level of civil discourse has apparently degenerated so far in Ohio that such a reference is treated as a “slang expression [that] is such a part of modern casual speech as to be almost meaningless,” one can only hope that this holding will be confined to Ohio.

Oftentimes, we draft our non-disparagement clauses to read somewhat as follows:

“The Parties agree to make no disparaging, untrue, or misleading written or oral statements about or relating to the other Party, their integrity, acumen, ethics, inter-personal skills, job performance, business knowledge or business practices.”

One wonders if language like the foregoing had been utilized in the Lopez case whether the court would have arrived at a different conclusion.  Frankly, given the rationales of the court, I am far from certain that the result would be different.  After all, the court found that there was a breach, but that the breach was not material because it caused no damages.  In addition, the court found that Mr. Lopez had left the voicemail message with outside counsel for the OEA, someone whom he stated he “thought” to be a friend.  Now, I have piqued your interest undoubtedly.  Why would Mr. Lopez be calling a lawyer for OEA.  Put on your seatbelt folks – the defendant who referred to his former boss, the executive director of the OEA, as a sleazebag was none other than the former general counsel of the OEA.  So, in Ohio, lawyers can talk to lawyers whom they “think” are their friends and refer their former bosses as slimebags with impunity.

Even though the court finds a breach, because it finds the breach is not material, I guess that the breach could not be the predicate to rescind the agreement and clawback the consideration/severance monies paid to the former employee.  I haven’t thought through completely how we might revise our non-disparagement clauses, but it seems to me that one might consider language that states, in essence, that a breach is a breach, or put more succinctly, one need not establish damages or that the breach need not be material to obtain relief, e.g., rescission and disgorgement of severance pay.

 And, let’s not forget: “What’s sauce for the goose is sauce for the gander.”  Here the former employee avoided a judgment against him, but this means that, with the passage of time, eventually we will see Ohio cases (at least from this court) with the shoe on the other foot.  I can envision the executive director saying to people whom he thinks are his friends that he thought the general counsel was a slimebag.  While I have not researched it, I’ll bet you that there are significant number of lawyers out there who think that they are defamed (not to mention disparaged) if they were referred to as a slimebag.  And, given the warm fuzzy feelings that juries have about lawyers, lots of luck in proving that you were actually damaged by being called a slimebag.

Further, given that Ohio or at least this one Ohio appellate court has carved out the “I thought he was a friend” exception, maybe one’s non-disparagement clause has to state that a disparagement stated to anyone, friend or otherwise, constitutes an actionable breach.

Let’s hope that this decision is not representative of some trend in how courts will treat non-disparagement clauses.  Otherwise, we might as well tell our clients that we ought not waste our time and their money in negotiating such clauses.

Tip of the hat to Jon Hyman at Ohio Employer’s Law Blog for bringing this case to my attention.

Please be sure to visit our website at http://RobertBFitzpatrick.com

Choice of Forum Clauses: Judge Chasanow’s October 18th Opinion in Ruifrok v. White Glove Restaurant Services, LLC

On October 18, 2010, Judge Deborah K. Chasanow issued an opinion on a motion to remand to state court a civil action removed to the Federal District of Maryland.  Ruifrok v. White Glove Restaurant Servs., LLC, 2010 U.S. Dist. LEXIS 110369 (D. Md. Oct. 18, 2010), available here.  The opinion, as well as an earlier Ninth Circuit opinion to which it makes reference (Kamm v. Itex Corp., 568 F.3d 752 (9th Cir. 2009)), underscore in drafting employment agreements and severance / settlement agreements, that the language of the choice of forum clause can be dispositive as to whether the controversy can be removed to federal court or not.  Additionally, Kamm teaches us that motions to remand predicated on a choice of forum clause are not covered by the “defect” exception in 28 U.S.C. § 1447(d), and thus the 30-day rule does not apply to such motions to remand. 

Drafting Forum Selection Clauses

In Ruifrok, the language of the forum selection clause read as follows:

This Agreement and the parties’ performance hereunder shall be governed by and interpreted under the laws of the State of Maryland.  Employee agrees to submit to the jurisdiction of the courts of the State of Maryland, and that venue for any action arising out of this Agreement or the parties’ performance hereunder, shall be in the Circuit Court for the County of Montgomery, Maryland.

In Ruifrok, the court was called upon to decide whether that language necessitated a remand of the case to state court.  Judge Chasanow looked at cases containing forum selection clauses that applied to all claims arising from or relating to “the employment relationship” and cases where courts had found that a statutory wage claim was not a matter “relating to the agreement” and therefore not encompassed by the forum selection clause.  She contrasted those cases with the matter before her, finding that the language in the instant case applied not only to actions arising “out of this agreement,” but also to those arising from “the parties’ performance hereunder.”  She found that the latter clause encompassed statutory wage claims under the FLSA and the Maryland Wage Payment and Collection Law, as resolution of issues under those statutes would require careful scrutiny of the employment agreement to determine the nature and scope of the plaintiff’s job duties, and the method by which he was compensated.  In short, she held that plaintiff’s claims related to defendants’ performance, or non-performance, under the agreement, and thus were encompassed by the forum selection clause.

Judge Chasanow found that a forum selection clause constitutes a waiver of the right of removal to federal court; that forum selection clauses are presumptively enforceable; and that the clause at issue was mandatory, not permissive.  Her finding that the clause was mandatory was based upon the clause’s use of the phrase “shall be” rather than permissive language.

The opinion also discusses tort claims, finding that they could not be adjudicated without analyzing whether the parties were in compliance with the underlying agreement, and thus were governed by the forum selection clause.  Judge Chasanow also noted that the agreement had been drafted by defendants, and thus she stated that they could have specifically reserved a right to remove the action to federal court.

The opinion contains a brief discussion of the exceptions to the presumption of enforceability of a forum selection clause, which are: 

“(1) their formation was induced by fraud or overreaching; (2) the complaining party "will for all practical purposes be deprived of his day in court" because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law may deprive the plaintiff of a remedy; or (4) their enforcement would contravene a strong public policy of the forum state.”  Allen v. Lloyd's of London, 94 F.3d 923, 928 (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991); Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13, 15, 18 (1972)).

Defendants argued that enforcement of the clause would be unreasonable because two individual defendants were not signatories to the employment agreement.  Judge Chasanow had no difficulty with this argument, finding that removal is only permissible if all of the defendants consent to removal, and the company had waived its right to removal by virtue of the forum selection clause, and therefore could not consent to removal.  Additionally, she pointed out that it is well-established that non-signatories to an agreement are nevertheless “covered by choice of forum clauses so long as their alleged conduct is ‘closely related to the contract in question.’”  The individuals were being sued under the FLSA and Maryland Wage Payment and Collection Law as “employers” within the meaning of those statutes, and therefore the claims against them were “closely related” to the contract at issue.

So, in terms of takeaways, if anything, the opinion underscores the importance of carefully drafting the forum selection clause either to prevent removal or assure that the option is preserved. 

Procedure

While the motion to remand in Ruifrok was filed within 30 days of removal, Judge Chasanow’s citation of the Kamm case led me there, and it is worthwhile to share with our readers the holding in Kamm, which is consistent with the holdings of all other circuits that have addressed the issue.  Some fairly arcane history is a necessary predicate to understanding the issue. 

Prior to 1996, the removal statute (28 U.S.C. §1447(c)) provided:  A motion to remand on the basis of any defect in removal procedure must be made within 30 days after the filing of the notice of removal under § 1446(a).  If at any time before final judgment it appears the district court lacks subject matter jurisdiction, the case can be remanded.

Prior to 1996, the courts had held that the 30 day requirement of §1447(c) did not apply to motions to remand based on forum selection clauses.

In 1996, the statute was amended to delete the phrase “any defect in removal procedure” and substitute simply “any defect.”  The argument was then made that the “any defect” language encompassed a motion to remand based on a forum selection clause.  Prior to Kamm, the Tenth, Seventh, First, and Eleventh circuits had rejected that argument, finding that motions to remand based on a forum selection clause are not governed by the 30 day rule.  The Kamm court agreed, finding that the “any defect” language had been substituted for the prior language to cover motions to remand based on non-procedural statutory requirements for removal such as the forum defendant rule (don’t let those words confuse you—they have no relevance to a forum selection clause).  Thus, the motion to remand based on a forum selection clause, like the motion that was successful in Ruifrok, need not necessarily be filed within 30 days, but rather, must be filed within a reasonable timeframe.  The Kamm court was clearly uncomfortable with this result, stating, “there are good policy reasons to impose a statutory time limit on a motion to remand based on a forum selection clause, whether that limit be thirty days or some other period.”  Having expressed its displeasure, the Kamm court noted that that is a task for Congress, and not the court, and thus it affirmed the district court’s order remanding that case to state court. 

So, the takeaway from Kamm would seem to be that best practice, as was the case in Ruifrok, is to file your motion to remand within 30 days even though not required to do so, and in any event, to file within a reasonable time after notice of removal.

Tip of the hat to Will Aitchison of the FLSA Blog.

Please be sure to visit our website at http://RobertBFitzpatrick.com.

Social Media Update III

 To cap off our update on social media’s intersection with the workplace, we point you to a post from Sam Glover at the Lawyerist on subpoenaing Facebook and MySpace.  There, Mr. Glover details the process for record preservation requests and subpoenas. 

Here is what Mr. Glover uncovered with respect to Facebook:

Thank you for contacting Facebook.

If you are requesting that information on our site be preserved, please send a preservation order by mail or fax to the following address:

Facebook
1601 S California Avenue
Palo Alto, CA 94304
Attn: Security Department
Fax Number (650) 644-3229

Please provide as much of the following information as possible to expedite your request:
- Your full contact information (name, physical address, phone and email):
- Response date due (please allow 2-4 weeks for processing):
- Full name of user(s):
- Full URL to Facebook profile:
- School/networks:
- Birth date:
- Known email addresses:
- IM account ID:
- Phone numbers:
- Address:
- Period of activity (specific dates will most likely expedite your request):

Please be sure that your contact information is valid, so that we can contact you with updates on your request status.

Although providing this information will enable us to identify the account in question so that we can preserve available information, we will also need a valid subpoena or other court order in order to provide this information to you. This subpoena or court order should be mailed or faxed to the above address.

Governmental Agency

Please note that if the requesting party is a governmental agency, a search warrant is required for private inbox and/or outbox communication 180 days old or less. See 18 U.S.C. § 2703(a).

Civil Matters

With regard to civil matters, state court subpoenas must issue from a court within California or must be issued pursuant to the proper California court commission. Federal civil subpoenas seeking the production of documents must issue from the court in the district where the production is to be made. Please send the subpoena to subpoena@facebook.com or fax to 650-644-3229.

In addition, Facebook requires a $150 processing fee per User ID. Checks can be made payable to Facebook, Inc. and can be sent to the attention of Facebook Security at 1601 S. California Ave., Palo Alto, CA, 94304, bearing the name and number of the case for which the fees are paid.

Please note that our users’ data is protected by the Electronic Communications Privacy Act (“ECPA”). See 18 USC section 2701 et. seq. ECPA is a federal statute that prohibits Facebook from producing any “content” without notarized user consent or a Search Warrant.

If you have additional questions, you can contact us at [subpoena@ facebook.com].

* * * * * * *

And here is what Mr. Glover uncovered regarding MySpace:

MySpace received your request for information regarding proper service of legal process. MySpace requires personal service of legal requests to our registered agent in Los Angeles.

Please note that MySpace requires specific information in order to comply with your legal request. Providing only the user’s first and last names or dates of birth is not sufficient to identify the user’s profile. MySpace requires that you provide the user’s unique friend ID number or url. The friend ID number is located in the url line. For example, within the url http://www.myspace.com/index.cfm?fuseaction=user.viewProfile&friendID=6221&Mytoken=20050518161358, the friend ID is 6221.

The type of information MySpace can produce in response to a legal request is restricted by federal law. With a subpoena, MySpace may lawfully produce basic subscriber information and IP logs for a user’s account. MySpace is prohibited from lawfully producing the contents of a user’s private mail messages or stored content files held or maintained on behalf of a user to a any non-government entity, by the Stored Communications Act (“SCA”) 18 U.S.C. §§ 2702-2703. The materials protected from disclosure by Section 2702(a)(2) include MySpace user content including, but not limited to, friend lists, photos, blogs and private messages.

If these records are truly integral to the instant case, the clearly available mechanism for obtaining them is for the owner of the MySpace accounts in question to consent. For civil matters, this consent must be accompanied by a subpoena. To provide proper consent, MySpace requires that a user supply a signed statement containing the friend ID for the account, the password associated with the account, the user’s zip code, and the birth date provided to MySpace. You may also obtain an Order from the court compelling the owner of the account to consent to the disclosure of the emails in question.

MySpace requires personal service of subpoenas in civil matters. MySpace will accept personal service at 2121 Avenue of the Stars, Suite 700, Los Angeles, CA 90067 between the hours of 9:30-12:30 and 2:30-5:30. Personal service will also be accepted at CSC locations throughout the state of California. For a list of California locations, please call 888-690-2882. All subpoenas should be addressed to the Custodian of Records for MySpace.com. Additionally, MySpace will only accept subpoenas from out-of-state civil litigants if they have been properly domesticated through a California court.

Please be sure to visit our website at http://RobertBFitzpatrick.com

Social Media Update II

The Departing Employee’s Twitter Account:  Ownership and Record Preservation Issues

CNN’s termination of its reporter Rick Sanchez has sparked an interesting discussion over who “owns” Mr. Sanchez’s “ricksanchezcnn” Twitter account.  Venkat Balasubramani at SpamNotes.com has provided the following analysis:  assuming there is no agreement governing the disposition of the account upon termination, most likely Mr. Sanchez would be able to retain the “followers” he has accumulated to date.  However, given that the CNN “brand” is attached to Mr. Sanchez’s Twitter handle, there is little chance “richsanchezcnn” will survive the termination—and yes, changing a Twitter handle without losing accumulated followers is doable.  As for the Tweets themselves, Mr. Balasumbramani notes that they “are probably partially owned by CNN, although this could be complicated by the fact that Sanchez may have mixed in ‘personal’ Tweets and ‘professional’ tweets, and probably did at least some of the Tweeting on his own time.”  Bottom line:  employers would be best served to ensure that any social media policies provide: 

(1) terminated employees immediately cease using employer-sponsored and/or -related social media accounts.  In addition, in the case of CNN and Mr. Sanchez, both parties would appear to have preservation obligations if any of Mr. Sanchez’s Tweets are relevant to any legal claims;

(2) employers must have access to employees’ social media account passwords at all times;

(3) employers must approve any public statements disseminated via an employer-sponsored Twitter account; and

(4) departing employees must “turn over” social media to employer. 

In crafting employment contracts to encompass the preceding, employers ought directly to address the ownership issue, that is, address who is the “account holder.”  Twitter’s “Terms of Service” state that “you,” the “account holder,” retains right to content:

“Your Rights:  You retain your rights to any Content you submit, post or display on or through the Services. By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).

Tip This license is you authorizing us to make your Tweets available to the rest of the world and to let others do the same. But what’s yours is yours – you own your content.

You agree that this license includes the right for Twitter to make such Content available to other companies, organizations or individuals who partner with Twitter for the syndication, broadcast, distribution or publication of such Content on other media and services, subject to our terms and conditions for such Content use.”

Employers will also want to be cognizant of covering in social media policies Facebook’s “Fan Pages” and other social media platforms with “following” functions similar to Twitter.

A tip of the hat to Venkat Balasubramani at SpamNotes.com for bringing this to our attention.

Please be sure to visit our website at http://RobertBFitzpatrick.com

Social Media Update I

Every day now, there are fascinating developments taking place where social media and the workplace intersect.  Here are a few that have caught my attention in the last few days.  More to come tomorrow.

New York State Bar Ethics Opinion 843 (9/10/10)

The New York State Bar Association’s Committee on Professional Ethics quite recently issued an opinion addressing the question of whether a lawyer may view and access the Facebook or MySpace pages of a party other than the lawyer’s client in pending litigation in order to secure information about that party for use in the lawsuit, including impeachment material, where the lawyer does not “friend” the party and instead relies on public pages posted by the party that are accessible to all members in the network.  With the question so structured, the Committee had little difficulty in concluding that the lawyer could access the Facebook or MySpace network used by another party in litigation to search for potential impeachment material so long as the lawyer does not “friend” the other party or direct a third person to do so.  See also Philadelphia Bar Association’s Professional Guidance Committee’s Opinion 2009-02 (Mar. 2009), where it held that it was improper for a lawyer to ask someone to “friend” an unrepresented adverse party in a pending lawsuit to obtain potential impeachment material.  There, the witnesses’ Facebook and MySpace pages were not generally accessible to the public, but rather were accessible only with the witnesses’ permission, that is, only the witness allowed someone to “friend” her.  The third person whom the lawyer proposed to have “friend” the witness would have concealed the association with the lawyer and the real purpose behind “friending” the witness.  However, the New York State Bar’s opinion noted a “key distinction” between its opinion and the Philadelphia opinion:  “[T]he Philadelphia opinion concern an unrepresented witness, whereas our opinion concerns a party—and this party may or may not be represented by counsel in the litigation.  If a lawyer attempts to ‘friend’ a represented party in a pending litigation, then the lawyer’s conuct is governed by Rule 4.2 (the “no-contact” rule), which prohibits a lawyer from communicating with the represented party about the subject of the representation absent prior consent from the represented party’s lawyer.  If the lawyer attempts to ‘friend’ an unrepresented party, then the lawyer’s conduct is governed by Rule 4.3, which prohibits a lawyer from stating or implying that he or she is disinterested, requires the lawyer to correct any misunderstanding as to the lawyer’s role, and prohibits the lawyer from giving legal advice other than the advice to secure counsel if the other party’s interests are likely to conflict with those of the lawyer’s client.  Our opinion does not address these scenarios.”

New York City Bar Association Formal Opinion 2010-2

The New York City Bar Association was presented the following question:  May a lawyer, either directly or through an agent, contact an unrepresented person through a social networking website and request permission to access her web page to obtain information for use in litigation?  To answer the question, the Bar narrowed the question to whether a lawyer, acting either alone or via an agent, may use “trickery” or “deceptive” behavior to “friend” potential witnesses.  The Bar’s concern being, the relative ease with which one can “deceive an individual in the virtual world” as compared to the “real world.”  The Bar then pointed to New York Rules of Professional Conduct 4.1 (“In the course of representing a client, a lawyer shall not knowingly make a false statement of fact or law to a third person.”) and 8.4(c) (“A lawyer or law firm shall not . . . engage in conduct involving dishonest, fraud, deceit or misrepresentation.”) in opining that an attorney or her agent may not “friend” an individual under false pretenses to obtain evidence from a social networking website.  In the interest of informal discovery, however (see, e.g., Muriel, Siebert & Co v. Intuit Inc., 8 N.Y.3d 506 (2007) (stating that “the importance of informal discovery underlies our holding here”); Neiseg v. Team I, 76 N.Y.2d 636, 372 (1990) (same)), the opinion states that an attorney or her agent “may use her real name and profile to send a ‘friend request’ to obtain information from an unrepresented person’s social networking website without also disclosing the reasons for making the request.” 

New York Superior Court Directs Plaintiff to Grant Defendant Access to Her Facebook and MySpace Accounts

In Romano v. Steelcase Inc., 2010 N.Y. Misc. LEXIS 4538 (N.Y. Sup. Ct. Sept. 21, 2010), Judge Jeffrey Spinner of the Supreme Court of New York sitting in Riverhead, ordered plaintiff to grant defendant access to her Facebook and MySpace accounts, including deleted and historical pages, on the grounds that the photos on those pages were inconsistent with her claims of loss of enjoyment of life.  The court found the information sought by defendant to be both material and necessary to the defense, stating that it appears from plaintiff’s public profile page on Facebook that she was “smiling happily in a photograph outside the confines of her home despite her claim that she has sustained permanent injuries and is largely confined to her house and bed.”  Given this “public” photograph, the court continued:  “In light of the fact that the public portions of plaintiff’s social networking sites contain material that is contrary to her claims and deposition testimony, there is a reasonable likelihood that the private portions of her sites may contain further evidence such as information with regard to her activities and enjoyment of life, all of which are material and relevant to the defense of this action.”  See also Karen Barth Menzies and Wesley K. Polischuk, Is Your Client an Online Social Butterfly?, Trial (Oct. 2010), in which the authors discuss the false sense of security many social media account holders attribute to the “private” setting.  For example, the article cites to Moreno v. Hanford Sentinel, Inc., 91 Cal. Rptr. 3d 858 (Cal. App. 2009), in which the court stated “the fact that [the plaintiff] expected a limited audience does not change the [] analysis.  By posting the article on MySpace.com, [the plaintiff] opened the article to the public at large.  Her potential audience was vast.”
Please be sure to visit our website at http://RobertBFitzpatrick.com