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Houston Employment Law Blog


Contract Disputes: Jeunesse sues LifeVantage CEO

Many people in Texas and elsewhere around the world consider getting involved with a multi-level marketing company to start their own business or to make some extra income. When people choose which company they would like to join, a significant part of the choice will be based upon the products that a specific company offers. Contract disputes among direct selling companies can occur when former employees branch off to start their own businesses and are accused of stealing proprietary information.

Jeunessee Global, a skin care multi-level marketing company, claims to have over 400,000 distributors around the world and, for 2014, reported revenue of more than $400 million. The company has accused its former sales chief of stealing the formula for one of its products. The man allegedly ripped-off Jeunessee's Instantly Ageless serum formula.

Contract Disputes: Life Time Fitness sues for breach of contract

Individuals in Texas who are in high ranking positions within their companies must exercise caution if they decide to leave their employment and have signed a non-compete agreement. Contract disputes still may occur even if the departed employees are adamant that they are adhering to their agreements in good faith. Life Time Fitness has recently filed a federal lawsuit in Texas against its former vice president, his wife and their new business -- ReNew You LLC -- for breaching a non-compete agreement.

In 2010, the former regional vice president sold Family Fitness Wellness and Sports to Life Time for over $5 million. He allegedly signed a non-compete agreement and then was placed in charge of a number of locations in several states. According to Life Time, he was with the company until he was terminated for breaking his contract. His wife also worked for Life Time off and on and eventually became a regional manager before she quit.

Use of FMLA time may have resulted in retaliation to an ex worker

Serious illnesses can be difficult for Texas employees to manage, and in some cases, the medical conditions may be so severe that an approved leave under the Family and Medical Leave Act may be necessary for those employees who qualify for this employment benefit. Taking advantage of this federal law, however, should not result in adverse employment conditions or any other type of retaliation. A former employee of Dart Container Corp. in another state alleges that he lost his job because he took an approved medical leave, and he has filed a claim against the company and its human resource manager in federal court.

The plaintiff started working for Dart in 1988 and worked up through the ranks until he became the production manager. The man suffered from gout and periodically needed to take time away from work to recover from his condition. He was reportedly eligible to receive 12 weeks of approved medical leave under the FMLA.

Changing employers could result in contract disputes

Things can be a bit complicated when Texas employees with access to confidential information choose to move on and secure employment elsewhere. On many occasions, these workers sign non-compete agreements. When claims arise that the terms have been violated, contract disputes can occur. Centennial Bank has filed a federal lawsuit against a former regional president and a competing bank, ServisFirst, alleging violations of the former employee's non-compete agreement.

The former top executive's role was reportedly being the only point of contact between Centennial and another bank during an acquisition. This deal was allegedly contingent upon the other bank's management structure being an important part of the branches that were being added during the acquisition by Centennial. Recently, the defendant quit working for Centennial and subsequently announced he was hired by ServisFirst. On the same day he left the company, three other employees quit Centennial in order to work at ServisFirst as well.

Ex-waitress alleges she lost her job for sexual harassment claims

All Texas employees expect to work in a safe environment that makes them feel comfortable, but that is not always the way that things turn out. An employee for a Sonny's Barbecue restaurant in another state claims that not long after she started working, she was subjected to sexual harassment. She has initiated the process to sue by filing a complaint with the Equal Employment Opportunity Commission.

According to her complaint, the plaintiff was finishing an evening shift when her superior unexpectedly grabbed her rear end. The former waitress claims that she turned around in surprise and gave him a look that should have made him question his actions. She claims she debated if she should report what occurred and decided that it would be a good idea so that it would not happen to others in the future.

Contract disputes: Ex sales manager sued re non-compete contract

Many Texas employees may not be fully aware of what all of the clauses mean in a non-compete agreement before they sign it. Workers who skim the information and assume that everything is in order, or assume that it will not affect them because they have no intention of quitting, may be mistaken. Misunderstanding these agreements can result in contract disputes that could be very costly.

Merz North America Inc. recently filed a complaint in a federal district court against one of its former workers. The company claims he violated a non-compete agreement by disclosing trade secrets. The man was a regional sales manager who reportedly had access to private company information and other pertinent trade secrets. Prior to leaving his position, he apparently signed a non-compete agreement. Under the terms of the agreement, Merz claims the man agreed that he would not compete with his former employer if he left the company's employ.

Transferring company information could lead to contract disputes

It is not surprising that many Texas companies will require employees who have access to trade secrets to sign non-compete agreements. However, these agreements should not be entered into lightly without completely understanding the terms and what could cause contract disputes.  Many employees sign these contracts blindly and may not understand that what they are doing after they leave their employment could be in violation of their contracts.

A former IT specialist working for Brand Services LLC is accused of stealing confidential information. When the employee was hired, he apparently signed a non-compete agreement stating that he would not reveal any of the confidential information to which he had access if he ever chose to leave the company. Recently, the worker did choose to quit, but he is now accused of disregarding his agreement.

Violating non-compete agreements can lead to contract disputes

Although many companies try to maintain a high retention rate, it is impossible to hold onto every employee, including those in upper management. Individuals in these roles are typically given access to highly confidential information. In order for Texas businesses to be protected, people with such access sign non-compete agreements to protect company secrets in the event of their departure. Violating these agreements can lead to contract disputes against the individuals and/or their new employers.

A former design executive for Nike was with the company nearly three years before he moved on to join Ralph Lauren Corp. The employee had signed a non-compete agreement because he allegedly had access to the Nike's long-term strategies as well as new product designs that were still in planning. He also had access to other highly confidential information that could be dangerous in the hands of a competitor.

Leaked proprietary information can lead to contract disputes

To prevent pertinent company information from being shared with competitors, some employees are forced to sign a non-compete agreement. This agreement is designed to protect any trade secrets that employees may have had access to during their employ, and contract disputes can follow if it is violated. Texas businesses that are aware of a non-compete agreement and still choose to use information that is leaked from a former employee could face litigation.

Brand Services, a scaffolding manufacture, has filed a complaint in a federal court in another state against Irex Corporation. After one of Brand Services' IT specialists left the company, he chose to get another job at Irex. Since Irex was considered a direct competitor, this was allegedly in violation of the non-compete agreement that the specialist had signed.

Woman claims workplace discrimination after becoming pregnant

A former employee of Sava Senior Care -- with locations in Texas -- claims that she was mistreated after she became pregnant. She claims she was the victim of workplace discrimination because she was not provided the opportunity to be on light duty. The Equal Employment Opportunity Commission filed a complaint on her behalf to try to hold the senior facility accountable.

The plaintiff alleges that she visited with her doctor after she became pregnant, and she was told that she was unable to lift 35 pounds. She filled out the facility's reasonable accommodation request form so that she could work on light duty. According to the complaint, the facility allowed workers who were unable to lift to work on light duty. The former nursing assistant maintains that those in her position could still assist residents, even with these restrictions. She claims she could help residents with oxygen tubing and nebulizers as well as helping to clean and feed them.

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