Beck Reed Riden’s Guide for Improving Noncompete Agreements

The current issue of New England In-House Counsel features Stephen Riden’s guide for improving non-compete agreements, called “Taking your non-compete agreement from good to great.”  A PDF version of the article can be downloaded here.

The guide is tailored to assist in-house counsel in crafting robust non-compete agreements.  It provides the basic requirements for an enforceable non-compete agreement in Massachusetts and suggests several provisions that can be added to existing non-compete agreements.

For instance, the article suggests the addition of a provision that can potentially extend the duration of the agreement:

Tolling provision. Say an employee leaves your company but neglects to disclose that they are leaving to work for a competitor in violation of their non-compete agreement. This is not an uncommon scenario. What happens if that breach only comes to light two months later? Assuming that the non-compete agreement has a one-year duration, that would mean the effective duration would be reduced to the 10 remaining months.

However, a clause that extends the duration of the non-compete period for the amount of time that passes before the employer learns that its former employee is engaged in prohibited activity provides additional protection.

The same clause could also toll the non-compete period for the time it reasonably takes the employer to obtain injunctive relief to halt further impermissible competition. In both of these circumstances, the tolling stops the clock for activities beyond the employer’s control and helps to ensure that the employer obtains the full benefit of its non-compete agreement.

It is important to note that, in some states, such a tolling provision can create ambiguities, which militate against its use, while in others, it may suffice to limit its reach, as a court may construe an excessive tolling period as unreasonable.

Click here for the current edition of New England In-House Counsel.

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Chambers USA Ranks Russell Beck

Russell Beck was honored in the June 2011 Chambers USA Guide for his litigation and labor & employment experience.

Chambers included Russell in its Notable Practitionerssection, adding that “Russell Beck of Beck Reed Riden LLP is regarded as ‘something of a leader in the noncompetition arena’ by peers and Clients praise his arbitration skills and say he “has the ability to distill the abstract into a powerful, clear and persuasive argument.

Russell was first ranked by Chambers USA in its 2010 guide.

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

BRR Celebrates its One Year Anniversary

One year ago today, we started Beck Reed Riden LLP.

We are thankful for the support of our clients, colleagues, friends, and families over the past year.  We look forward to many more years of being Boston’s innovative litigation boutique.

Sincerely,

Russell Beck, Stephen Reed, and Stephen Riden

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Boston College Law School: Law Day

Beck Reed Riden LLP is proud to sponsor BC Law’s 2011 Law Day dinner.  The event was held on April 26, 2011, at the Seaport Hotel, Boston.

Beck Reed Riden LLP congratulates the following Law Day 2011 Honorees for their service as lawyers and dedication to Boston College Law School.

St. Thomas More Award
Mary K. Ryan ’77
Nutter McClennen & Fish LLP

William J. Kenealy, SJ, Alumnus of the Year Award
John F. Bronzo ’74
Pfizer, Inc.

Hon. David S. Nelson Public Interest Law Award
ileta A. Sumner ’90
Family Violence Prevention Services
and
Francis M. O’Boy ’64
Law Offices of Francis M. O’Boy

Recent Graduate Award
Michelle B. Limaj ’07
Foley Hoag LLP

Chapter Awards

Rhode Island
Patricia K. Rocha ’82
Adler Pollock & Sheehan P.C.

Northern California
Molly Agarwal ’06
Miller Law Group
and
Judy Liao ’05
Maranga Morgenstern APLC

Riden quoted in New England In-House on E-discovery

Stephen Riden was quoted in the recent issue of New England In-House in an article about an important electronic discovery decision from the Southern District of New York.  The article was written by Correy E. Stephenson.

In the article, which also appears in the recent issue of Lawyers USA, Stephen spoke about a decision recently issued by U.S. District Court Judge Shira Scheindlin concerning metadata and the form of production for electronic records.

Scheindlin, a legend in e-discovery circles for her opinions in Zubulake v. UBS Warburg LLC and The Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, recently issued an order in National Day Laborer Organizing Network v. U.S. Immigration and Customs Enforcement Agency, a dispute in a Freedom of Information Act case that offers broader e-discovery lessons.

Stephen D. Riden, a commercial litigator at Beck, Reed, Riden in Boston, said the decision “sets the bar for basic expectations of practicing attorneys.”

“Judge Scheindlin encourages lawyers to go back to the basics and have a 26(f) conference early on and discuss how they want production to look and what format works best for both parties,” he said.

Stephen frequently writes and speaks about commercial litigation issues, including electronic discovery.

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Massachusetts SJC Strikes Down Employer’s Wage Deduction Policy

A recent decision by the Massachusetts Supreme Judicial Court holds that an employer may not deduct money from an employee’s paycheck to compensate it for damage the employee has done to its property without running afoul of the Massachusetts Wage Act, G.L. c. 149, § 148.

In Camara v. Attorney General (SJC-10693) (January 25, 2011) (slip opinion here), the Court was faced with the following facts: ABC Disposal Services, Inc. (ABC) provides waste collection and recycling services in the New Bedford, Massachusetts area. Its employees have occasionally caused damage to company trucks and to the personal property of others while driving their routes. In an effort to promote safety and to reduce the number of accidents caused by its employees, ABC established a policy by which employees who were determined to be at fault for causing damage were given the option of either accepting disciplinary action or agreeing to set off the cost of the damage against their wages. Under the policy, determination of an employee’s fault was made exclusively by the company and was not subject to appeal. For those employees who agreed to a setoff, the average amount was between $15 and $30 per paycheck.

Apparently, one or more employees weren’t too happy about the setoff policy because in early 2006 the Attorney General’s office showed up and conducted an audit of payroll deductions for the previous two years. The audit revealed that under its setoff policy, ABC had deducted more than $21,000 from the wages of 27 different employees during the two-year period. Finding that the setoff policy violated the Wage Act, the Attorney General issued a civil citation against ABC, requiring it to make restitution to the employees and pay a civil penalty of almost $9,500. ABC appealed the Attorney General’s finding to the Superior Court, where the judge ruled in ABC’s favor and invalidated the citation.

The SJC reversed the Superior Court. In ruling against ABC, the Court reiterated that the Wage Act – the purpose of which is to protect employees and their right to wages – requires prompt and full payment of wages due an employee. To advance its underlying purpose, the Act prohibits “special contracts” between an employer and an employee by which the employee agrees to accept less than the full amount of wages due. The Court agreed with the Attorney General’s position that under the Act, “regardless of an employee’s agreement, there can be no deduction of wages unless the employer can demonstrate, in relation to that employee, the existence of a valid attachment, assignment, or setoff ….” The Court found that ABC’s setoff policy constituted the type of “special contract” generally prohibited under the Act.

The Court then turned to the question of whether the wage deductions ABC took constituted a valid setoff . The Attorney General argued that valid setoffs “implicitly involve some form of due process through the court system, or occur at an employee’s direction and in the employee’s interests.” In finding that ABC’s deductions were not a valid setoff, the Court held that ABC failed to establish that any of the employees in question were legally liable for damages, or that ABC was legally required to make payments to third parties on behalf of the employees. The Court found that even though the employees agreed to the wage deductions, they did not owe ABC a “clear and established debt,” which is a prerequisite for a valid setoff. The Court was particularly troubled by the fact that ABC was the “sole arbiter” of whether an employee was liable for damage caused to a company truck or to a third party’s property. The Court held that such unilateral decisionmaking, without any appellate process, did not establish that the employees owed ABC a clear and established debt. Consequently, the Court struck down the setoff policy.

The Camara decision is another example of the wage and hour minefield that employers must navigate on a daily basis. Before implementing a policy or procedure that affects employee pay, employers are encouraged to consult with experienced employment counsel.

This article originally appeared in Stephen B. Reed’s site, The Management-Side Lawyer.

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Superior Court Expands Wage Act to Include Severance Pay

In a departure from established precedent, a Massachusetts Superior Court has ruled for the first time that severance pay qualifies as “wages” under the Massachusetts Wage Act, G.L. c. 149, § 148.  In Juergens v. MicroGroup, Inc. (Docket No. 10-CV-2379-D), the plaintiff Albert Juergens successfully negotiated a six-month severance provision as part of his job offer at MicroGroup, Inc.  He began his employment in October 2008, and was laid off in February 2010.  When MicroGroup failed to make the severance payment, Juergens sued, alleging – among other things – violation of the Wage Act.

In its motion to dismiss, MicroGroup relied upon Prozinski v. Northeast Real Estate Services, LLC, 59 Mass. App. Ct. 599 (2003), which for nearly eight years has stood for the proposition that severance pay does not constitute wages under the Wage Act.  In his decision denying MicroGroup’s motion, Superior Court Judge Dennis J. Curran declined to follow Prozinski.  Instead, in an analysis notable in its brevity, he relied on Wiedman v. Bradford Group, Inc., 444 Mass. 698 (2005), which, according to him, “authorized a more expansive interpretation of the Wage Act;” one that “should not be limited to exclude severance pay.” The problem with this analysis is that Wiedman dealt with the issue of unpaid commissions, which are specifically included as wages under the Wage Act.  Severance pay, on the other hand, is not referred to in the Act at all.

While lawyers representing employees are undoubtedly salivating over the Juergensdecision and the prospect of recovering treble damages and attorneys fees (both mandated under the Wage Act), they may want to wait and see whether the decision is upheld on appeal.  But assuming that plaintiff’s attorneys are not going to wait, employers must ensure that severance payments are paid on a timely basis.  Unless and until an appellate court overturns the Juergens decision, failure to make agreed-upon severance payments exposes employers to liability under the Wage Act, including treble damages and attorneys fees.

This article originally appeared in Stephen B. Reed’s site, The Management-Side Lawyer.

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Riden Quoted in Massachusetts Lawyers Weekly on E-discovery

This week’s issue of Massachusetts Lawyers Weekly features a story on the rise of sanctions issued for e-discovery violations.  In Christina Pazzanese’s article, Stephen Riden comments on a recent study published in the Duke Law Journal that documents the increase of sanctions awards involving e-discovery matters.

Of the 401 cases studied, only 30 counsel sanctions were handed out and only 25 of those were issued specific awards; the other five were deferred. Sanctions against counsel were considered in seven additional cases, but were ultimately not handed out.

“I think sanctioning lawyers is often only the last resort of a court,” said Stephen D. Riden of Beck, Reed, Riden in Boston. “Courts will typically give lawyers the benefit of the doubt, especially with a large volume of data that’s hard to wrap your arms around.”

Unless the conduct is egregious and opposing counsel offers a “slam-dunk argument,” judges will look for other ways to punish violations, he said.

Judge Collings agreed.

“I don’t think courts have been all that anxious to impose sanctions. I think they realize it’s a difficult area” and only act on “really egregious stuff,” he said.

Stephen frequently writes and speaks about issues involving electronic discovery in litigation.

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

What Are Reasonable Attorneys’ Fees?

Today’s story in the Boston Globe provides a glimpse into the kinds of disputes that that can arise when a law firm’s client believes its legal fees are too high. The story covers an arbitrator’s finding that one of Boston’s premier law firms overcharged a client by more than $540,000. The arbitrator reportedly faulted the firm for submitting “vague” invoices and for assigning multiple employees to work on pleadings (e.g., six employees who billed more than 200 hours in total to prepare a complaint and injunction papers).

In these kinds of disputes, clients and lawyers are often forced to deal with the question of what constitutes “reasonable” attorneys’ fees. If the dispute is presented to a court in Massachusetts, a judge will use the “lodestar method” to calculate reasonable attorneys’ fees. According to a Massachusetts Appeals Court decision, this method involves “the multiplication of a fair market hourly rate by the amount of reasonably spent time.”

The lodestar method’s references to “fair market hourly rate” and “reasonably spent time” provide scarce objective guidance, so courts look at a variety of practical factors to help steer their analysis. According to the decision referenced above, these factors include:

(1) the length of the trial, (2) the difficulty of the legal and factual issues, (3) the degree of competence demonstrated by the attorney, (4) the nature of the case and issues, (5) the time and labor required, (6) the amount of money at stake, (7) the result achieved, (8) the experience, reputation, and ability of the attorney, (9) the usual price charged for similar services by other attorneys in the area, (10) the amount of awards in similar cases, and (11) the alternate demand for the attorney’s services.

With so much subjectivity and so many factors in the lodestar analysis, much is left to the discretion of the trial court judge. This level of discretion gives judges wide latitude to decide cases involving the reasonableness of attorneys’ fees, so it is difficult to predict the outcome of any particular dispute over legal fees.

Neither lawyers nor their clients want a dispute over fees to turn into a lawsuit. To avoid runaway fees, clients can and should have frequent communications with their attorneys about expectations for fees and disbursements. For example, if there are going to be multiple attorneys working on a single project, the reason for the staffing arrangement should be shared with the client. Similarly, if a firm plans to bill a client for internal conferences (i.e., conversations among attorneys at a single firm), the managing attorney should explain to the client his or her view about the value of having such conferences.

Avoiding fee disputes is not an exact science, but — as with much in life — good communication is the key. Beck Reed Riden LLP’s mission is to help our clients as business partners; a significant component of this approach involves practical discussions about our clients’ goals and expectations. Through these discussions, we explore mutual expectations surrounding fees. We also offer a variety of innovative billing arrangements. We share our clients’ interest in minimizing the chances of any dispute over the cost of legal services.

For more information, contact Stephen Riden: sriden@beckreed.com or (617) 500-8672.

About Us

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience at large law firms, working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and labor and employment. We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

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