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Tag: House of Lies

House of Lies = House of Litigation

January 16, 2014

So I had to keep watching Showtime’s House of Lies to see what happened with Marty Kaan’s threats to open his own consulting firm in LA, in competition with his long time employer Galweather Stern. And maybe I also had to keep watching because I think Kristen Bell’s character has the best work wardrobe I have ever seen. Either way, big things happening in Season 2. We are mixing silks with wool, and Marty’s actions are going to get him sued. Well, they would in the real world.

In Season 2 Episode 6 and 7 – we see Marty take additional steps towards opening his own shop. If I represented Galweather Stern (and let us be clear, they are in California where non-competes are disfavored) I could still easily file suit against Mr. Kaan, today and allege the following:

1. Breach of Fiduciary duty. This was accomplished when he asked his banking client to stop doing business with GS and hire KAAN and ASSOCIATES. Big no no when you are still an employee of GS. Big problem to solicit clients away from your current employer.

2. Conspiracy. This was accomplished when he spoke to his other GS colleagues about opening his own shop.

3. Breach on Non – Solicitation. This was accomplished when he invited Ms. Jeanie to join his new firm. We can assume most big consultants have contracts that say they wont solicit employees to leave and compete.

4. Breach of Non – Compete. The existence of a non-compete was referenced in Season 1 but now that I know these folks are in LA – I don’t think it would be binding, California law thankfully disfavors these suckers. You could still file a breach of contract claim if however, another state’s law applies. For example, if GS also has a NY office and therefore all of the contracts are written under NY law – Marty is back in the hotseat.

5. Trade Secret Violation. If Marty used information he knew was confidential from GS to compete with them, he could be charged with violating state or federal trade secret act. Not Good.

I could go on but I won’t. Bottom line is that such behavior makes for a good story line. Jetting around on the company’s dime while you tell everyone (but your company) you are leaving and going to start your own firm makes for good drama. It also makes for fabulous litigation. And you think a new business wants to fork out $50,000 in its first year for attorneys fees? I doubt it.

So please, don’t do as they do on TV. Remember, it is fiction. And the actions of one arrogant fictional character should not inspire anyone to act likewise. Or, if you feel so inclined and you need someone to help you reply to the injunction filed against your new firm to prevent you from working, call me. I would be honored to help.

 

 

Finding truth in a House of Lies subplot

January 13, 2014

Admittedly, I am late to the dance. As usual.

I just watched my first episode of Showtime’s House of Lies this past weekend. I think I started with Season 1 or 2 – where Marty and the gang of super dressed consultants learn their firm has just been sold to a new company. This means new leadership, ownership and the inevitable conflict between Marty’s team and the new bosses. (predictable)

While I will withhold comment on my personal opinion on the show’s overt crassness (is that even a word?) I did find myself following one small plotline with great interest.

No, not the clear sexual tension between Marty and cute blonde co-worker, but the whole NON-COMPETE subplot.

You know the part where Marty is unhappy, has client loyalty and decides he will open his own firm.

And then his old boss (yeah, the West Wing guy) reminds him he has a 2 year non-compete.

And there is the reference that if he bolts – they will sue the $2000 dollar pants and $3000 shoes off of him and make his life miserable.

And then the part where Marty clearly thinks old boss is going to help him in the non-compete battle, even going so far as to release him from the agreement because he made the guy millions of dollars.

And we are left with Marty, expensive crystal high ball in hand enjoying brown liquor on his million dollar apartment balcony, looking puzzled and shocked.

Spoiler alert: I read ahead. He starts his own firm. I only hope the crafty and creative writers of this show write in the reality of a non-compete battle.

It is nasty. Expensive. You lose clients over it. You lose sleep over it. Your friends don’t stay your friends and in the end, usually, everyone loses – at least something.

I hope they don’t take the shortcut of some kind of quick resolution fueled by blackmail or threats. Because frankly, that is just fiction.

So, I will keep watching and waiting for a real portrayal of business litigation over an executive’s non-compete.

I know, I know, such real life drama cannot be found on stage or screen, just in the court room. But friends, I do hope you take a lesson from Marty: don’t be surprised when your ex-boss won’t stand up for you. Don’t be shocked to hear someone say your non-compete will be enforced against you and that your hard work and financial success for the company don’t change that. And lastly, don’t be surprised when you must decide between (a) an expensive legal battle or (b) leaving your industry and expertise or home for a few years in order to avoid the expensive legal battle.

Need help with a Virginia non-compete?

We would be happy to help.