What Is It Worth

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  • 1.Philip Durst Deats durst & owen, p.l.l.c. 707 west 34th St. Austin, texas 78705 What Is It Worth? 1
  • 2.What is Your Answer? What is a reasonable amount for the parties to agree on to settle this dispute without litigation? Answer: $________ 2
  • 3.Question #1: Hostile Work Environment Plaintiff is a 30 year-old female and was hired the Executive Assistant to the President of a small bank with 45 employees (President is a married male in his 50s). Plaintiff was hired in January of 2017 and says that the President began constantly touching and rubbing against her almost immediately after her employment began. 3
  • 4.Question #1: Hostile Work Environment 4 Plaintiff says that at least every week the President would touch or rub-up against her (including her breasts or behind) or summon her to the vault or some other place where he engaged in unwelcome sexual talk. Plaintiff reports that he constantly tried to talk to her about sexual topics, including asking if she was dating anyone, how she felt about sex with an older man, and what sexual positions she preferred. Plaintiff said that she was touched, rubbed or pinched every week, even after asking the president to stop.
  • 5.Question #1: Hostile Work Environment 5 Plaintiff says that she never received training on Sexual Harassment or was told who she could report it to (and that she had repeatedly told the President to stop). Plaintiff also says that the rumor at the Bank is that the employee who is in charge of Human Resources is the President’s cousin and answers to him. Plaintiff says she was afraid to report the harassment out of fear for her job.
  • 6.Question #1: Hostile Work Environment 6 In October of 2017, ten months into her employment, the bank President told her that he had “good news” and that she was such a valuable employee that he selected her to attend the 2017 Trade Show for Small & Regional Banks with him in Las Vegas in November (he said that he usually goes alone but wanted her to learn more about the industry “for her job”). Plaintiff says that she quit because she did not want to go to Las Vegas alone with the President.
  • 7.Question #1: Hostile Work Environment 7 Plaintiff says she was so traumatized by what she went through (she is taking anxiety medication for the first time after the termination and is seeing a psychologist) that she decided to move back to Missouri, live with her parents and go back to college. Plaintiff thus does not seek lost-wages, but seeks compensation for mental anguish and punitive damages (which are “capped” at $50,000 for an employer of this size).
  • 8.Question #1: Hostile Work Environment 8 The Bank is able to show that the head of Human Resources is not related to the President and that the Bank’s Anti Sexual Harassment policy was posted in the employee break room from the time that the employee started. The policy provides for anonymous or direct reporting to the head of Human Resources.
  • 9.What is Your Answer? Range $0-50K What is a reasonable amount for the parties to agree on to settle this dispute without litigation? Answer: $________ 9
  • 10.Answers to #1: Hostile Work Environment Average for Employee/Plaintiff lawyers: $35,232 Plaintiff-Side Range: $50K to $10K Average for Employer/Defendant lawyers: $33,330 Defendant-Side Range: $50K to $7,500 Defendant’s Value is 94% of Plaintiff’s Value. 10
  • 11.Question #2: HWE + Arbitration 11 Same facts as #1, but the Plaintiff signed a document when she began her employment that “all disputes be arbitrated before a single arbitrator under the auspices of American Arbitration Association” (with each side initially bearing half the cost of the arbitration, but that the “prevailing party” shall recovery their attorney’s fees and arbitration costs).
  • 12.Answers to #2: HWE + Arbitration 12 Average for Employee/Plaintiff lawyers: $29,393 Down from #1: $35,232 Plaintiff’s decreased the value by 17% Plaintiff-Side Range: $50K to $7,500K Average for Employer/Defendant lawyers: $26,032 Down from #1: $33,330 Defendant’s decreased the value by 19% Defendant-Side Range: $50K to $5K Defendant’s Value is 88% of Plaintiff’s Value.
  • 13.Question #3: Quid Pro Quo Sexual Harassment 13 Plaintiff is a female and a recent college graduate with a degree in Set Design. Plaintiff was hired as a Production Assistant ($30,000 annual salary) at a motion picture production company (film studio) in Austin. After plaintiff had been employed in that position for about a year, one evening after work, the Head of Production told her that he thought she was very talented and attractive. The Head of Production (the highest level creative person at the 150 employee company) told her that he thought that she should be the head of the team that designs sets but that he would really need to trust her “intimately” for her to receive such a promotion (that job pays $75,000 annually).
  • 14.Question #3: Quid Pro Quo Sexual Harassment 14 When the plaintiff asked him “What do you mean?” he says that he recently split-up from his girlfriend and that position was available as a way to “ease into” the new job. Plaintiff explains that she is in a committed relationship and even if she wasn’t she “is not interested in any kind of relationship at work.”
  • 15.Question #3: Quid Pro Quo Sexual Harassment 15 The following month, plaintiff was terminated because she was told that the Head of Production did not like the “color palette” of the Living Room set that had just been designed. Plaintiff says that this was a pretextual reason because as a “lowly Production Assistant” she is not allowed to select colors and that the man who did select the colors was not terminated.
  • 16.#3: Quid Pro Quo Sexual Harassment: Damages 16 Plaintiff was out of work for about 6 months and then was only able to find another job that paid $30,000 a year. Plaintiff seeks compensation for her lost wages, emotional distress, and punitive damages (she is taking anxiety medication for the first time after the termination and is seeing a psychologist). As you know, mental anguish and punitive damages are capped for an employer of this size at $100,000.
  • 17.What is Your Answer? What is a reasonable amount for the parties to agree on to settle this dispute without litigation? Answer: $________ 17
  • 18.Answers to #3: Quid Pro Quo Average for Employee/Plaintiff lawyers: $64,464 Plaintiff-Side Range: $115K to $15K Average for Employer/Defendant lawyers: $51,000 Defendant-Side Range: $75K to $10K Defendant’s Value is 79% of Plaintiff’s Value. 18
  • 19.Question #4: QPQ + Arbitration 19 Same facts as #3, but the Plaintiff signed a document when she began her employment that “all disputes be arbitrated before a single arbitrator under the auspices of American Arbitration Association” (with each side initially bearing half the cost of the arbitration, but that the “prevailing party” shall recovery their attorney’s fees and arbitration costs).
  • 20.Answers to #4: QPQ + Arbitration 20 Average for Employee/Plaintiff lawyers: $53,503 Down from #1: $64,464 Plaintiff-Side Range: $115K to $12,500K Plaintiff’s decreased the value by 18% Average for Employer/Defendant lawyers: $41,421 Average for Employer/Defendant lawyers: $51,000 Defendant-Side Range: $75K to $12,5005K Defendant’s decreased the value by 19% Defendant’s Value is 78% of Plaintiff’s Value.
  • 21.Question #9: Disability Discrimination (Diabetes) 21 Plaintiff is a lawyer at a large Dallas law firm for six years with a good work record. On January 3, 2017, plaintiff sent an email to the Managing Partner and to the head of Human Resources stating that she has just been diagnosed with diabetes and needs a Reasonable Accommodation to her schedule so she could get treatment and stabilize her condition. Plaintiff was given some extra flexibility in working from home and time off so she could manage her medication and doctor’s appointments.
  • 22.Question #9: Disability Discrimination (Diabetes) 22 Plaintiff says that other lawyers held it against her that she was receiving specialized treatment (word got out) and that the Managing Partner began to treat her more curtly than other associates. Plaintiff was terminated on July 1 by the Managing Partner for “not showing a positive attitude.” The Managing Partner was overheard by one of the lawyers (who is friendly to plaintiff) stating “Diabetes is a nasty disease. We have had other lawyers with that condition and it seems they always need more and more time-off and make more mistakes which can compromise our services to clients.”
  • 23.#9: Disability Discrimination: Damages 23 Plaintiff earned $150,000 per year at the firm (which has over 200 employees) and could not find work for a year and then could only find work for a small firm at $120,000 per year. Plaintiff seeks compensation for her lost wages, emotional distress, and punitive damages (she is taking anxiety medication for the first time after the termination and is seeing a psychologist). As you know, mental anguish and punitive damages are capped for an employer of this size at $200,000.
  • 24.Answers to #9: Disability Discrimination (Diabetes) Average for Employee/Plaintiff lawyers: $180,892 Plaintiff-Side Range: $330K to $110K Average for Employer/Defendant lawyers: $162,265 Defendant-Side Range: $300K to $62.5K Defendant’s Value is 89% of Plaintiff’s Value. 24
  • 25.#10: Disability Discrimination (Depression) 25 Same facts as in #9, except the disability that plaintiff reports and seeks an accommodation for is anxiety and depression. The facts are the same and the statement that the Managing Partner makes is “Depression is a nasty disease. We have had other lawyers with that condition and it seems they always need more and more time-off and make more mistakes which can compromise our services to clients.”
  • 26.Answers to #10: Disability: Depression 26 Average for Employee/Plaintiff lawyers: $143,571 Down from #9 (Diabetes): $180,892 Plaintiff-Side Range: $250K to $50K Plaintiff’s decreased the value by 21% Average for Employer/Defendant lawyers: $122,312 Down from #9 (Diabetes): $162,265 Defendant-Side Range: $250K to $75K Defendant’s decreased the value by 25% Defendant’s Value is 85% of Plaintiff’s Value.
  • 27.#5: Breach of Contract: Diminution of Duties? 27 Plaintiff is Assistant General Counsel at a 150 person medical device company. Plaintiff’s base pay is $200K per year. Plaintiff is the second highest ranking lawyer out of a total of five lawyers in the company’s Legal Department. Because the company is relatively small, plaintiff performs a number of functions: he is often asked to brief the Board of Directors on various issues, he oversees all patent applications, and serves on various corporate committees, such as those dealing with executive compensation, diversity and corporate taxes. In 2017, the company is bought out by a much larger international medical device company (headquartered in Switzerland). Plaintiff is told by the new entity that they want him to stay and that his pay and benefits will stay the same, that he will still have the title “Assistant General Counsel,” and that he will report to the Chief Patent Attorney for the U.S. in New York. Plaintiff is told that he will be in charge of patent applications and will have several patent clerks to assist him.
  • 28.#5: Breach of Contract: Diminution of Duties? 28 Plaintiff objects and says that this is a material diminution of his job duties that triggers an obligation to pay him one year of severance pay. The contract provision at issue says: Executive [Plaintiff] shall be employed as Assistant General Counsel with the duties and Executive’s benefits associated with that position. Should title, pay or duties be materially diminished without Executive’s consent, such diminution shall be considered a “Resignation for Good Reason” and Executive shall be entitled to receive one (1) year of severance pay.
  • 29.#5: Breach of Contract: Damages=$0-200K 29 The New Company states that Plaintiff’s pay did not diminish; that his job duties were not materially diminished and that, in fact, working for a large multinational is more prestigious and will offer more opportunities in the future. Plaintiff sues the company for $200,000, representing one year’s severance pay (after he timely “resigned for good reason”), and claims that his areas of responsibility have narrowed and that this will affect his ability to someday become the head “General Counsel” of another entity because he will no longer be working on so many high level issues that General Counsel candidates need to show familiarity with.
  • 30.Answers to #5: Breach of Contract (Diminution) Average for Employee/Plaintiff lawyers: $73,214 Plaintiff-Side Range: $150K to $15K Average for Employer/Defendant lawyers: $70,468 Defendant-Side Range: $150K to $10K Defendant’s Value is 96% of Plaintiff’s Value. 30
  • 31.#6: Breach of Contract (Diminution) + Arbitration 31 6. Same facts as #5, but the contract requires all disputes be arbitrated before a single arbitrator under the auspices of American Arbitration Association (with each side initially bearing half the cost of the arbitration, but with the “prevailing party” able to recover their attorney’s fees and arbitration costs).
  • 32.Answers #6: Breach of Contract (Diminution) + Arbitration 32 Average for Employee/Plaintiff lawyers: $67,142 Down from #5: $73,214 Plaintiffs decreased the value by 9% Plaintiff-Side Range: $150K to $25K Average for Employer/Defendant lawyers: $64,781 Down from #5: $70,468 Defendants decreased the value by 9% Defendant-Side Range: $150K to $7,500 Defendant’s Value is 96% of Plaintiff’s Value (same as #5).
  • 33.Question No. 7: Breach of Contract: Commissions 33 Plaintiff was employed as the Vice-President of Sales (supervising ten sales people) at a computer chip manufacturer. When plaintiff began his employment (in that role) two years ago, he signed the offer letter that was drafted by the Company and stated: You will be paid a base salary of $100,000 per year, plus 2% of standard margin on all net sales that the company books on a monthly basis (by you or by any sales people under your supervision).   Your employment is “at-will.” You are free to terminate your employment at any time for any reason or no reason. Similarly, the Company is free to terminate your employment at any time for any or no reason. This offer letter sets forth the terms of your employment with the Company. The terms of your employment can only be amended in writing signed by you and the president of the Company. Any waiver of a right under this offer letter must be in writing. This offer letter and your employment will be governed by Texas law.
  • 34.Question No. 7: Breach of Contract: Commissions 34 On June 1, 2017, the President orally tells Plaintiff that he will be demoted from the Vice President of Sales to a rank-and-file sales person. As part of this demotion, Plaintiff will receive less money for commissions: Instead of receiving 2% commission on all employee’s sales, he will receive only 2% on his individual sales. Plaintiff asks what territory he will be assigned and the President responds orally a few days later assigning him the Southwest Region of the Country. Plaintiff asks the President what that Region produced last year (in terms of sales) and what he can expect as Commission and the president says he will get back with him on that but never does.
  • 35.Question No. 7: Breach of Contract: Commissions 35 On November 1, 2017, Plaintiff is sent a letter that says “This letter is to memorialize the terms we discussed on June 1, and describes, in writing, the new role, compensation and territory.” Plaintiff says he cannot make ends meet under that plan and resigns. Plaintiff claims that he is owed compensation for the last six months pursuant to the terms of his Offer Letter and that he did not think the new plan had gone into effect yet and was not in writing until November 1. The parties agree that the difference between a commission of 2% of all sales and 2% of the Plaintiff’s sales from June 1 through November 1, 2017, is $85,000.
  • 36.Answers to #7: Breach of Contract: Commissions 36 Average for Employee/Plaintiff lawyers: $53,625 Plaintiff-Side Range: $99K to $10K Average for Employer/Defendant lawyers: $48,593 Defendant-Side Range: $85K to $10K Defendant’s Value is 90% of Plaintiff’s Value.
  • 37.Question No. 8: Breach of Contract (Commissions) + Arbitration 37 8. Same facts as #7, but the Offer Letter also states that all disputes be arbitrated before a single arbitrator under the auspices of American Arbitration Association (with each side initially bearing half the cost of the arbitration, but with the “prevailing party” able to recover their attorney’s fees and arbitration costs).
  • 38.Answers to #No. 8: Breach of Contract (Commissions) + Arbitration 38 Average for Employee/Plaintiff lawyers: $49,196 Down from #7: $53,625 Plaintiff lowered value by 9% Plaintiff-Side Range: $85K to $10K Average for Employer/Defendant lawyers: $44,726 Down from #5: $48,593 Defendant lowered value by 8% Defendant-Side Range: $85K to $10K Defendant’s Value is 90% of Plaintiff’s Value (Same as #7)
  • 39.Question No. 11: Covenant Not to Compete 39 Employee has spent most of his professional life working at various companies that design or sell coolers, thermoses or other insulated products. In January of 2012, Employee began working for a company in Austin that sold ultra-high end coolers. Plaintiff was the director of New Product Development and was to receive a base salary of $100,000 and a commission of 1% percent of the company’s net profits. In 2016, Employee asked for his commission rate to be increased and was told “no.” After that time, Employee began thinking that he was not appreciated because “so much of the company’s growth” is attributable to him.
  • 40.Question No. 11: Covenant Not to Compete 40 So, in January 2017, Employee tendered his resignation and then started his own insulated products business. In April, 2017, Employee was able to come-to-market with a similar looking cooler, mug and tumbler. The Company contacted its lawyers because Employee signed a Non-Compete Agreement that stated that for 9 months from the termination of Employee’s employment (for any reason) “Employee would not sell, market or design any cooler, insulated mug or insulated tumbler” in the United States (where Employer sold its goods and where the geographic market for which the Employee designed products). Once the Employer learned of this new competitor, it hired a forensic computer analyst who determined that one month before Employee left the Company, he downloaded all product designs onto a thumb-drive that was not provided to him by the Company. The Company claims that this, independently, is a violation of Employee’s contractual and common-law duties to not use Company proprietary information and trade secrets.
  • 41.Question No. 11: Covenant Not to Compete 41 The Company filed suit seeking an injunction and damages. At both a TRO hearing and a Temporary Injunction hearing, a judge upheld the terms of the non-compete in favor of the Company. The issue now is damages: In the year after Employee left the Company, he was able to sell 100,000 coolers, tumblers and mugs. Employee can show that his profit on these items was $100,000 due to his start-up costs. The Company claims that its profits for these 100,000 units would have been $200,000 because of its more mature and established network of manufacture and distribution. In other words, the Company says that if it sold those 100,000 items, its lost net profits would have been double that of the Employee ($200,000).
  • 42.Question No. 11: Covenant Not to Compete 42 Employee can show that he never plugged-in his thumb-drive and claims that he did not need the Company’s design because there are so many competitors out there that he simply copied several of the competitor’s designs. Employee also claims that if he did not sell those 100,000 products, there is no way to prove that those consumers would have bought items from the Company, as opposed to some other copy-cat competitor. The parties enter into negotiations for the damage portion of the case.
  • 43.Answers to #11: Covenant Not to Compete 43 Average for Employer/Defendant lawyers: $72,750 Defendant-Side Range: $25K to $100K Average for Employee/Plaintiff lawyers: $66,428 Plaintiff-Side Range: $25K to $100K Employee/Defendant Value is 91% of Employer/ Plaintiff Value (Company is now “Plaintiff”).