CFO sues Sterne Agee for contract breaches

The former CFO of the investment group Sterne Agee Group, Inc., is suing his employer for breach of contract. The company is based in Alabama, one of Florida’s neighboring states. The man alleges that the company and its chief executive committed violations of employment law, including fraud, breach of contract, defamation and conversion. Press releases from the firm show that the man is looking to recover financial compensation for severance pay and other claims.

The firm’s chief executive is accused of using the company’s money to fund personal expenses, including jewelry and accessories, along with gifts for employees and his friends. The man also allegedly acquired a Florida condominium and several boats using company funds. The employee bringing the complaint reportedly confronted the CEO about his expenses, and he was subsequently fired.

The complaint also states that the CFO suffered defamation because the company’s chief executive made up stories about the man in an effort to explain his dismissal. The cover-up was necessary, according to the suit, because the firm had hired four CFOs during a six-year period. The man was ultimately fired in August 2012.

Court documents show that the company’s CEO promised the man a year’s severance pay if the position at Sterne Agee did not work out. It is not clear whether the man ever signed a formal employment contract with Sterne Agee, but the CEO made a verbal promise with regards to the severance pay. Now, the man is seeking to recover the full amount of that severance, along with $358,000 in bonds, stocks and other personal funds he sank into the company during his tenure. The company has refused to release the man’s personal investments.

For that reason, the man is seeking compensation for the relatively rare charge of conversion, a legal term used to describe the company’s refusal to cede control of their employee’s personal property. This man, like many employees, had no choice except to sue the company in an attempt to clear his professional reputation. If you have been wrongfully terminated without your severance pay, you should seek legal assistance in filing a civil suit to defend your employee rights.

Source: AL.com, “Fired Sterne Agee CFO sues former employer, CEO Holbrook for defamation, fraud, breach of contract, conversion (updated),” Kyle Whitmire, March 5, 2013

Google exec wins non-compete case against Amazon

Non-compete agreements are common in the business world. These legally binding documents prevent scientists, researchers and experts from sharing proprietary secrets with other industry leaders if they are hired elsewhere. These non-compete agreements do not always protect employee interests, however; many high-level workers are prevented from exercising the full scope of their knowledge. The agreements may be binding for a period of months, though they can be applicable for years at a time. A recent case out of Seattle has shown that restrictive noncompetition clauses can be circumvented to protect employee rights.

The case involves a worker who was hired by Google from competitor Amazon in 2010. Amazon was attempting to limit the scope of the sales executive’s work, claiming that he would violate the non-compete agreement if he worked for Google. A federal judge ruled in favor of the executive and Google, largely because the man’s new employer had crafted an adequate contract to protect all parties.

The man had initially been restricted from soliciting Amazon customers for six months, based on the offer letter created by Google. A federal judge upheld that decision, striking Amazon’s request for an 18-month restriction on the man’s work activity. In other words, he will be able to solicit new clientele from the Amazon consumer base as soon as the six-month probationary term expires in March.

Experts say the case reveals several important attributes of non-compete agreements, particularly in jurisdictions where those documents are commonly enforced. Employees are urged to carefully consider all documents they sign because agreements can have an impact on future career opportunities. Although the executive in this case was green-lighted to solicit consumers from his old firm after just six months, many judges may not be so lenient. It is unlikely that a judge will totally void a non-compete agreement; rather, he or she will probably shorten the agreement’s terms to be more palatable to the employer and newly hired worker.

Source: GeekWire, “Legal lessons from Amazon’s ‘noncompete’ battle with Google,” William Carleton, Dec. 31, 2012.

Employers: Prepare for holiday layoffs

Beware your holiday stocking this year. Experts say a pink slip could be lurking inside. The end of the year is among the most volatile annual periods for businesses, according to industry leaders, which can lead to high numbers of layoffs. Many employers realize they have fallen short of their earnings goals as the holidays approach, causing firms to blatantly ignore employee interests even as a festive season dawns.

Experts anticipate that national job-loss numbers could reach past 150,000 this year, nearly a 50 percent increase over the fall quarter of 2012. An early example of this carnage is Citigroup, which slashed 11,000 jobs worldwide, sending about 4 percent of its total workforce packing.

Rumors of layoffs often fly through offices at this time of year, which can cause panic, anxiety and confusion. Business leaders say employees can take some proactive steps to ensure their financial security after a layoff. First, call on all of your networking resources to lay the groundwork for obtaining another job. Next, begin crafting the best severance package possible so you can fight for your rights when the ax finally falls.

If you know ahead of time that layoffs are coming, you can be better prepared. Enter your layoff conference with several important questions regarding your financial future. You need to know whether a severance will be issued. The length of that severance is also important. The details of the severance matter, as well. When will payments begin, will the payment be a lump sum, and which taxes will apply? Consider petitioning for health benefits that continue through the term of your severance. Also, ask what will happen to your retirement account upon your departure.

If the severance package does not meet your expectations, you do not have to sign the documents immediately. Rather, take some time to review the paperwork with a qualified attorney who can help you fight for the benefits and wages you deserve. You should always fight for more benefits, more wages and additional services such as career counseling. After all, they can only tell you “no.”

Source: LFPress.com, “Layoff rumors? Gird yourself before the axe falls,” Chelsea Emery, Dec. 10, 2012

Employer accused of forcing employee to house prostitutes

Some duties that employees are forced to tend to from day to day are simply part of the job. When executives force their employees to do things outside the realm of the workplace, employment violations begin to crop up.

An employment law suit filed by a Florida employee of a debt collection company claims that his boss ordered him to provide housing to prostitutes in his home, and tormented him in other ways. He argues that these actions should be sufficient grounds for voiding his employment contract.

During his 10 year stint with the firm, he asserts, he experienced various objectionable office pranks, found that his co-workers engaged in widespread drug use and that his boss used his home for assignations with prostitutes he wished to have sex with.

His boss did this because he needed a place to engage in sex with the prostitutes, as the man was married, according to the plaintiff. The employee also discovered that one of these prostitutes was left overnight in his residence.

To make matters worse, his boss also purportedly harassed his ill mother, and referred to her with a vulgar sexual nickname and other terms referring to her anatomy. The boss also sent false text messages to the man’s girlfriend, pretending to be him, trying to lure her to a dinner.

Not all the harassment was sexual, however. The boss also kept as much as half of all the commissions which the employee earned on successful collections, denying the employee a major part of his compensation, he claims.

Rightfully so, the employee wants to be awarded damages, including the withheld commissions, as well as to be released from his remaining contract with the company. The lawsuit was filed in a Florida state court. No worker should be forced to endure such a hostile work environment.

Source: Huff Post Small Business, “Mark Oliff, Florida Man, says Boss used his home for sex with prostitutes,” Sept. 28, 2012.

Tension erupts over pension changes in Florida

Politicians in Florida looking to cover a $3.6 billion budget shortfall targeted the pensions of public employees to do so. While a trial court said that the move, which would save $1 million in pension benefits, was unconstitutional, the lawmakers behind the proposal are relying on the state’s Supreme Court to label it a fair cost-cutting move amid a financial crisis. This battle has proven to be a high-profile employment law issue as the changes essentially equate to an illegal salary reduction for workers, according to the opposition.

Lawmakers, predominately Republicans, altered the way that the state funds pensions for its employees. Public employees are now required to put 3 percent of their income into their pension to help pay for it. The new law also eliminated the cost-of-living adjustment, which would ensure that employees can stay on pace with inflation during their retirement years.

A lawyer representing a group of public employees who are challenging the new law said that it is unfair to make such a drastic change so suddenly. The lawyer, who is representing 11 people who were affected by the new pension law, said that the change was a direct violation of the agreements already struck between the state and its workers. The lawyer’s clients are asking that their contributions to their pensions be given back to them with an extra amount in interest.

A circuit court judge originally sided with the workers in the case, saying that they have the right to collectively bargain over conditions of employment, and in this case, were not able to. However, the state’s high court has agreed to hear the case to determine whether that decision would be reversed or upheld.

If the circuit court’s decision is upheld, Florida will have to continue funding workers’ pensions as it did, plummeting further into a financial hole. On the other side of the coin, if the Supreme Court decides that lawmakers were within their rights in changing pension laws, state workers face an uncertain financial future.

Source: Money News, “Florida $1 billion pension reform faces high court scrutiny,” Sept. 7, 2012