Articles Posted in business litigation

A Massachusetts business lawsuit alleging a pattern of anti-competitive behavior by Keurig Green Mountain since its K-Cup portion pack patent expired mirrors 14 others brought in five states.

The lawsuits allege numerous violations of both state and federal antitrust and anti-competitive laws designed to protect consumers and businesses from unfair competition. businessgraphics2.jpg

The battle has been percolating for years, but the lawsuits came shortly after the announcement of the soon-to-be-released Keurig 2.0. The primary issue is that this newer model will reject all other kinds of portion packs, except those produced by Green Mountain.

Previously two other coffee portion pack companies – TreeHouse Foods and Rogers Family Co. – won lawsuits filed against them by Keurig when they introduced products to the market. Now, Keurig’s latest model will reject products from those companies – and all others.
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New entrepreneurs often display a passion and enthusiasm that is commendable. They believe in their product or service, they’re eager to thrive and they dive head-first into marketing. neonsigns.jpg

While advertisement is an important aspect of launching any firm, our Boston small business lawyers urge all new company owners to consult with their legal team on a strategy. Advertising practices are regulated by both federal and state laws, and Massachusetts has some of the strongest consumer protection statutes on the books.

Sales practices that are deemed deceptive or unfair are addressed by the Federal Trade Commission, as well as the Massachusetts Attorney General. Per the Federal Trade Commission Act, advertising has to be truthful and fair and advertisers have to back up their claims.
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Think bullies are relegated to elementary school playgrounds?

Think again.
Our Boston business attorneys know that an increasing number of employer liability claims are stemming not from sexual harassment, but workplace bullying.

Victims of bullying aren’t necessarily a protected class, but it is considered a form of harassment. Some 40 percent of workers surveyed in Massachusetts said they had been bullied at some point during their career.

Such actions might include:

  • Verbal abuse;
  • Work interference, sabotage or any actions that prevent the victim’s work from getting done;
  • Offensive behavior or conduct, including non-verbal, that is intimidating, humiliating or threatening.

For example, a bully might falsely accuse a co-worker of mistakes or errors. They may yell, shout or scream. They may practice exclusion through the silent treatment. They might withhold necessary information or resources from the victim. They might lob excessive put-downs, insults or harsh criticism. They might make unreasonable work demands.

Some believe these types of actions have increased amid the heightened pressure heaped on employers and employees in this struggling economy. Victims may not have many options to leave their jobs, meaning they are forced to stay and suffer the mistreatment.

Firms without policies in place to stop bullying or those that fail to take steps to stop it once it is reported could find themselves shelling out a lot of money for settlements.

In Massachusetts last year, the Healthy Workplace bill was introduced to provide some form of relief to workers who had been hurt either physically, psychologically or financially as a result of being subjected to an abusive work environment. The bill would have provided incentives for employers to enact preventative measures.

It didn’t pass last year, but it was reintroduced this year as HB 1766. The measure currently has 31 House sponsors and eight Senate sponsors, all but one being Democrat.

The bill would hold that:

  • No employee should be subjected to an abusive work environment;
  • An employer may be held liable when violations of this right result from a lack of reasonable preventative action, failure to appropriately correct the problem or retaliation against the employee who complained;
  • An employee may be held individually liable if he or she is found to have perpetuated the abuse.

Already, the National Association of Government Employees Local 282 is one of the first unions in the country to include anti-bullying clauses in its collective bargaining agreements.

Massachusetts is among roughly a dozen states to consider such action. The idea is that plaintiffs may be able to pursue lost wages, medical expenses, benefits, and essentially compel employers within the state to prevent a work environment that is rife for abuse.

While the vast majority of complaints stem from verbal abuse, lies or malicious gossip, these actions may not even need occur in person to qualify as harassment or abuse. A federal appeals court in California last year found that a corrections agency was liable for harassment of one employee via a blog. While this decision is not binding on Massachusetts, it sets persuasive precedent for other courts, should a suit of a similar nature be brought elsewhere in the country.

It can be confusing for employers to know what exactly their obligations are or what measures they can take to shield themselves from this kind of action. And employees who have suffered from this kind of maltreatment need a place they can go to learn more about their rights.
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Our Boston franchise attorneys understand a number of competing car dealerships have banded together to file suit against a rival they contend is skirting state auto dealership franchise laws – specifically, Massachusetts General Law 93B.repetitionseries10.jpg

This legislation, which governs the business practices of auto manufacturers, dealers and franchises in Massachusetts, says, in part, that a manufacturer is prohibited from owning a dealership. Usually that’s not an issue, as manufacturers make the vehicles, which are then shipped off to a dealership to be sold. These dealership franchises, which are independently-owned, must abide by a list of state regulations, including holding special licenses and guaranteeing that they can conduct repair work on the vehicles they sell.

The target of this action, by the Massachusetts State Automobile Dealers Association and the National Automobile Owners’ Association, is Tesla Motors. Tesla Motors, according to the complaint in a Boston Superior Court, allegedly broke the law when it opened its own dealership, albeit a small one, in the Natick Mall.

The rival companies say that Tesla has an unfair advantage because it’s not investing the millions of dollars that other car manufacturers must in order to ensure that their franchises are complying with their agreements and with the law. It’s also not having to spend the money that multi-brand dealerships do when they have to dedicate a different showroom to each brand.

But Tesla says it isn’t doing anything wrong. Company administrators say that because it is such a small firm, its production capacity is not nearly enough to adequately stock any of its two dozens stores. So customers have to get on a wait list in order to purchase a vehicle. Thus, Telsa is unlike a regular dealership, where a customer can walk in, sign some paperwork and drive off in a new car.

Still, the rival companies say they aren’t backing off of their illegal trade practices lawsuit. Although a judge refused to issue an injunction that would have barred Tesla from operating its stores while the suit is pending, the company has stopped offering test drives and reservations at certain locations.

The CEO of Tesla, Elon Musk, said the real issue here is that these large manufacturers are terrified electric vehicles are going to undermine their business.

The other dealers, however, counter that it has more to do with the difficulties for customers who need to get services. For example, Tesla’s Boston service center is scheduled to open in the spring, but it would be in a different location than the dealership, contrary to requirements for franchised dealers.

In reality, franchise laws weren’t written with the goal of protecting the consumer. They were written to protect dealerships from distributors and manufacturers who might be otherwise cut off contracts without warning or be tempted to strong-arm dealerships into purchasing models.

There are a great deal of advantages – and disadvantages – when it comes to franchising, regardless of whether you are in the auto industry. Speaking to a Boston franchise attorney before entering into any franchise agreement is essential to ensuring your rights are protected. We encourage franchise owners or those considering opening a franchise to seek legal advice as early as possible in the process. .
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A weaker economy has undoubtedly led to more work, and sometimes for the same – or even less – pay. weldingglass.jpg

Boston employment lawyers understand overtime complaints have become increasingly more common – and not just in the U.S.

The survey, conducted by Harris Interactive on behalf of Kronos Inc., found that about two-thirds of non-salaried employees in France, the U.K., Australia, Canada, Mexico, China, India and Brazil indicated their employers violate overtime rules – at least part of the time.

In the U.S., a little less than half said the same thing.

So while we may be better off than some other places, overtime violations are no rarity. They are rarely sanctioned, except through civil litigation, despite the fact that both federal and Massachusetts state laws forbid an employer from not properly compensating most hourly employees with overtime.

Workers in China, Britain and India had the highest number of complaints.

Of course, overtime in and of itself is not a problem – and is often welcome by many employees because they need the extra pay. In fact, in the U.S., nearly 50 percent said they were content with the amount of overtime they worked, and another 40 percent said they actually wished they had more.

The problem is when overtime laws are broken.

The U.S. Fair Labor Standards Act (or FLSA) requires that companies pay time-and-a-half for any time employees put in over the full-time 40 hours work week. There are a few exemptions (for example, police, firefighters and hospital workers typically don’t work a 40-hour week, so the rules are a bit different).

The regular base rate of pay has to meet minimum wage requirements (which is $8 per hour in Massachusetts as of Jan. 1, 2012, except for tipped employees, for whom it is $2.63 an hour).

So here, if an employee makes $8 regularly, the worker would have to be paid $12 an hour for any time that he or she works over that 40-hour threshold.

When workers do get overtime, they may be reluctant to speak up about not receiving the full time-and-a-half pay because they don’t want to jeopardize their opportunity for extra hours. In some cases, hourly workers may be subtly asked to work over without any pay at all.

Across the U.S., there has reportedly been a record increase in the number of employee claims of wage and hour violations. These include miscalculation of overtime pay and off-the-clock work. According to the U.S. Department of Labor, there have been roughly 7,000 complaints filed so far this year under FLSA. That’s an increase of about 2,000 from 10 years ago.

Last year, the federal agency’s wage and hour division reportedly collected some $225 million in back wages from employers on behalf of some 275,000 workers.

More employees may be standing up to overtime violations in Boston due to the discussion generated by high-profile cases, such as several class action suits filed by Walmart workers. Earlier this year, the retail giant agreed to pay some $5 million in back wages to some 4,500 employees who were not properly classified, and therefore denied the overtime to which they were entitled. Four years ago, another case involving the company, alleging improper meal and rest breaks, resulted in a $352 million verdict.
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The Bangor Daily News reports that a U.S. District Court magistrate in Massachusetts has recommended a former Live Lobster official and minority partner be awarded $235,000 from one of the company’s owners.

It’s the latest in a rash of legal setbacks for the New England lobster distributor, which is based in Chelsea. Boston business attorneys know the stakes are high when dealing with an ownership dispute. Having a general counsel attorney can often protect a business, as well as the interests of owners, by providing a number of legal services, including: 1266923_untitled.jpg

-Business formation -Employment contracts -Partnership documents -Incorporation -Contracts -Contract Disputes -Non-compete contracts
As we reported back in April on our Massachusetts Employment Lawyer Blog, Live Lobster is facing several lawsuits from banks and a former business partner. In dispute is $4 million, including a claim by TD Bank that the company defaulted on a 2008 loan. The financial problems have idled plants in Stonington, Phippsburg, Rockland and Spruce Head and there remain unanswered questions about whether those facilities will resume operations.

The company ships Atlantic lobster to restaurants on the West Coast.

The former general manager says he was a minority owner from 2003 to 2009, when he was “frozen out” of the company. He agreed to a $460,000 settlement and received $225,000. He claims TD Bank is blocking the remaining $235,000 payment. But he has pursued a claim against the existing owners.

The company has also come under fire for bouncing checks to lobstermen.

Unfortunately, times of financial challenge are often when ownership disagreements arise. Whether a disagreement on the direction of a company, or contentious issues involving owners and financial interest, having a strong foundation is critical to a company’s ability to survive such upheaval.

The parties agreed to have the magistrate make a recommendation to presiding judge Patti B. Saris. The recommendation is for a default judgement against one of the company’s owners, who is living in Italy and has not responded to the lawsuit. The case against the other owner is still being pursued.

A default judgment can occur when a party to a lawsuit does not cooperate with the court process, does not respond to official correspondence from the court, misses court dates, or otherwise draws the court’s ire. In some cases, ignoring a legal proceeding can result in a default judgment, so it’s important to consult with an attorney at the earliest sign of litigation.

TD Bank claims the company has defaulted on a $3.4 million note and had been making deposits in another bank to keep funds from being seized, in violation of the security agreement. A Massachusetts business foreclosure action may result. In such cases, a Chapter 11 bankruptcy, or re-organization bankruptcy, can sometimes give a business the breathing room it needs to re-group, address debt, and continue as an ongoing concern.
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The Boston business litigation that the Upper Crust pizza chain has become embroiled in appears to have more layers than a supreme. pizzapie.jpg

Boston business lawyers have been closely following the case, which involves not only deep contention and division among owners, but also a federal investigation for possible violation of labor practices.

This dispute is a clear example of why the process of small business formation in Boston requires an experienced attorney. When everyone’s roles and responsibilities are clearly spelled out in corporate contracts, there is less of an issue later if those rules are violated.

This suit and counterclaim, both filed in the Suffolk Superior Court, pits the founder of the upscale pizza chain on one side and two co-owners on the other.

According to The Boston Globe, the two co-owners filed suit against the founder back in April. Those accusations included racking up some $750,000 worth of personal charges to the company’s account. One of those purchases included small airplane. They also say that he improperly used corporate checks to make a down payment on his personal home and falsely claimed that vacations to Nantucket and the Cayman Islands were business ventures. Additionally, they claim the founder’s wife was placed on the payroll, despite the fact that she was in no way employed at the company.

They contend that the founder’s spending was reckless and endangered the company’s chances at viability at a time when it could least afford it – as it was being investigated for violation of federal labor laws.

The co-owners are requesting that the court leverage its power to force the founder to give up his stake in the business, which is roughly 45 percent, as well as all the related businesses. The co-owners currently hold 40 percent and 15 percent stake, respectively.

Also named in the suit are the founder’s wife, who the co-owners claim wrongfully accepted nearly $30,000 in paychecks from the company that she did not earn, and the former chief financial officer at the company, who is accused of illegally transferring funds to the founder.

While the founder has been placed on leave from the company, he has filed a counterclaim saying the two co-owners illegally seized control of the company and have harmed it, possibly irreparably, with their own lavish trips to casinos and island resorts.

Both sides say the other is lying.

Amid all of this is the ongoing investigation by the U.S. Department of Labor, following civil litigation that has been filed by several former employees who allege wage violations and mistreatment.

What’s more, the company owes roughly $150,000 in meals taxes that weren’t paid for 10 of its locations.

The company is reportedly looking for a settlement agreement with regard to the civil cases, though nothing has been formally announced.

The co-owners say that while the founder ripped off approximately $1 million, they each had to pour their own money – as well as some borrowed from relatives – to save the company from being forced to shutter its doors. It’s already had to close the location near Boston University just recently.
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Boston business litigation lawyers know that when you ink a deal, you expect the other party is going to hold up their end of the bargain. scales.jpg

When they don’t, you need an experienced Boston business litigation lawyer to help protect your rights.

That’s what’s happening now between Hollywood A-listers Kevin Costner and Stephen Baldwin, who entered into a mutual investment in a device that’s been used to clean the British Petroleum oil spill in the Gulf of Mexico. Baldwin alleges that Costner and his business partner swindled Baldwin and his friend out of their cut of an $18 million deal to purchase the devices following the massive spill in April 2010.

While there are unique challenges to this case (most prospective jurors aren’t quizzed on whether they are huge fans of “Dancing With Wolves” or “The Usual Suspects”), the basic legal principles of business partnership are going to be the same.

It all centers around a device that separates oil from water.

Prior to the spill, Baldwin and his friend owned shares in a company that supplied the devices to clean up oil spills. So did Costner and his business partner.

Baldwin claims that Costner and his business partner actively worked to deprive them of their share of an $18 million deal with BP to buy more than 30 of the devices following the spill.

Baldwin said that he and his friend were not aware of the deal when they agreed to sell their shares – Baldwin for $1.4 million and his friend for $500,000. In fact, the two say they were purposely left out of a meeting that was held among Costner, his business partner and a BP executive, who shook hands on an $18 million deposit for a more than $50 million order of the devices.

Baldwin and his friend say that Costner and his business partner had planned all along to use the money from BP’s deposit to purchase their shares, which would subsequently have been much more valuable than what they were sold for.

However, Costner said he wasn’t there when Baldwin’s friend agreed to sell his interests in the company. What’s more, Costner said he didn’t even know either of them were planning to sell.

Costner has said his only interest was in making sure BP could get a hold of the devices. And in fact, he said, there was no concrete deal to sell anything to BP at the time Baldwin and his friend decided to sell his shares.

Baldwin and his friend are seeking more than $20 million in their civil lawsuit, while Costner and others are countersuing for damages.

What this case illustrates – in addition to the point that you must be careful with whom you enter any sort of business or investment arrangement – is that the terms of these type of arrangements should be legally vetted by a skilled business attorney. Failure to do so could easily result in time-consuming and costly litigation.

What is much more common, of course, is the establishment of local partnerships or limited liability corporations. As well as the sale or merger of businesses operating under various legal structures. Consulting an experienced Massachusetts business attorney today can often save the time and expense of lengthy litigation tomorrow.
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A Boston employment dispute at a local power plant has resulted in stalled production, a worker lock-out and mounting tensions on both sides. powerstation.jpg

Massachusetts employment attorneys know that when dealing with labor unions, companies need to have aggressive legal muscle on their side. Still, the tone and manner of approach can be everything in these cases. The goal is to avoid a soured relationship, while still maintaining the company’s best interests.

That’s not happening here.

It involves the Pilgrim nuclear power plant in Plymouth and the Utility Workers Union of America Local 369.

Both sides are accusing the other of compromising public safety, and politicians are even beginning to weigh in on the issue, following management’s decision to lock out union workers when contract talks dissolved for the second time in as many weeks.

Workers have taken to picketing, and legislators are calling out company officials, saying that barring those employees from entering has heightened security concerns at the nuclear site.

However, company officials have countered that the ball is actually in the union’s court, as it can’t have its workers on the job without a contract, due to mandatory federal license requirements. The company further said it has been bending over backward to negotiate with the union, offering wage increases and high-value health benefit plans. The parent company, Entergy, rakes in about $1 million each day from this power plant, and recently received a 20-year license renewal for its operation. It runs 10 others across the country.

Union members say the workers aren’t on strike, but they have been picketing in at least three different locations near the plant.

The union even took it a step further by filing a complaint with the National Labor Relations Board, alleging five specific charges alleging, among other things, that security at the company has been secretly audio and video-taping picketing workers and that management has made threatening and coercive statements to union workers in recent weeks.

Additionally, the company is accused of altering the shift rotations of union workers without providing adequate notice, failing to provide all the relevant and necessary information to various union requests and altering health insurance and retirement plans for union workers.

Even if your company isn’t dealing with a union, contract dispute issues can quickly become a public relations nightmare. There may be a temptation by company officials, particularly those in small businesses, to handle these alone. But an experienced attorney is going to be able to accurately express your legal standing and reasoning to any outside inquirers.

Employment and business law at both the state and federal levels can be complex, and you may not even be aware of all your legal obligations to your employees – or your legal rights as a company. This is where having an attorney with experience is going to ultimately pay off, whether you’re working to establish employment and business contracts or settle disputes with your workers or other companies.
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Boston business litigation attorneys know that when businesses must go toe-to-toe with the government, strong and aggressive legal representation is essential. vacancy.jpg

One entrepreneur is discovering this, now that he is embroiled in a business litigation lawsuit involving his family’s motel business.

The case, out of Tewksbury, Massachusetts, involves the owner of Motel Caswell, erected in 1955 by the current owner’s father.

The federal government is suing the actual hotel building (the case is United States of America vs. 434 Main Street, Tewksbury, Massachusetts), in an attempt to seize the property, sell it for profit, which it intends to give to the local police department.

It’s important to note that this is the only significant source of income for the Caswells, and all of their retirement money is wrapped up in the business as well.

How is this even possible?

A recent column by George Will, published in both The Washington Post and The Courier-Journal, explains:

It centers on the crimes of former guests.

In the last 17 years, roughly 30 guests of Motel Caswell have been arrested on charges of dealing drugs. First, Will questions whether that figure is correct, as law enforcement in this case would have a substantial financial incentive to fudge those figures. But secondly, even if that were the case, those 30 incidents would reportedly have involved fewer than five on-hundredths of one percent of the roughly 125,000 rooms that the owner has rented over nearly 7,000 days.

The government is alleging that the rooms in which these drug dealers stayed had been used to “facilitate” those crimes. What’s key is that the lawsuit does not allege that the owners knew about the crimes or even that they were supposed to have known.

With civil forfeiture law, the burden of proof actually lies with the civilians, in this case the business owners. They will have to prove that they did everything they possibly could to prevent these crimes.

What they did do was photocopy customers identification cards, install security cameras and record their license plate information. The business owners even voluntarily turned all this over to police. The law enforcement agency, meanwhile, had never pressed them to do anything more. It’s also important to note that the owners have never been charged or convicted of any crime.

The business owner rightly purports that if he had a larger hotel business, this would probably not be happening.

The U.S. Department of Justice has made clear its intent with the property would be to seize the hotel, turn around and sell it for about $1.5 million, with the majority of those funds being funneled to the police department in Tewksbury, which has an annual budget of roughly $5 million.

What the government is attempting to do is called “equitable sharing,” which basically just means that both government entities will be profiting from this measure.

Civil forfeiture cases in which the property itself is said to have acted wrongly have historically been lodged against pirates. In those cases, the individuals themselves may have been off at sea, but the government could seize their property with this law.

It seems in this case, however, it’s the government doing the pirating.
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