DC Federal Court Rejects Employee Challenge to Arbitration Agreement

Friday, April 26, 2013 by Team PCT Law Group

An employee who claimed an agreement he entered to arbitrate all employment related claims was unconscionable has his challenged rejected as the Court found the arbitration agreement to be neither procedurally or substantively unconscionable.

In the case of Fox v. Computer World Services Corp., et al. (2013), when Plaintiff Phillip Fox (“Fox”) began his employment with Computer World Services Corp. and C2 Essential, Inc. (joint employers of Fox and collectively referred to as “Defendants”) he electronically signed a number of forms, one of which was an arbitration agreement.  The arbitration agreement provided that the parties agreed to arbitrate, inter alia, any claims alleging violation of federal and state statutes.  Approximately eighteen months after he began working for Defendants, Fox’ employment was terminated.  Fox alleged that his job termination was in violation of the Age Discrimination in Employment Act, and also alleged retaliation and violations of the District of Columbia Human Rights Act.  Fox refused to arbitrate his claims and instead sued Defendants in state court.  Defendants removed the case to federal court and also filed a motion to dismiss and to compel arbitration.    

For his part, Fox challenged the arbitration agreement and claimed it was procedurally unconscionable because it was buried within a larger series of employment documents; it was presented to him on a take it or leave it basis; and, he did not understand that by acknowledging the arbitration agreement he was agreeing to the terms within the agreement.  Fox also challenged the agreement because he signed it electronically.  The Court rejected each of these arguments and found that the Agreement to Arbitrate was presented in a separate document and the title of the document was in all caps and in bold font.  In addition, the Court found that immediately before the signature line of the agreement was an acknowledgement, again in all caps, which stated that the signatory read and understood the terms of the agreement and was been provided the opportunity to discuss the agreement with legal counsel.  Finding that Fox had a choice as to whether to enter the agreement, acknowledged that he read and understood the agreement and was given a chance to consult legal counsel, the Court found the arbitration agreement was not procedurally unconscionable. 

Fox also raised a number of substantive challenges to the arbitration agreement, including challenging the agreement on the grounds that it contained a fee-sharing provision wherein all parties were required to share the fees and costs of the arbitrator in an amount and manner determined by the arbitrator.  While the Court easily disposed of most of Fox’ substantive challenges to the arbitration agreement, the fee- sharing issue raised by Fox and whether forcing him to go through arbitration would be prohibitively expensive was not so easily resolved.  Ultimately, the Court found that the risk that Fox might incur prohibitive costs was too speculative to invalidate the agreement.  The Court relied on the fact that Defendants had waived the fee-sharing provision in the agreement, and that the agreement (although somewhat ambiguous) appeared to allow the arbitrator discretion as to how to allocate fees and costs. Therefore, Fox’ argument as to what portion of those fees he would have to bear were too speculative to deem the arbitration agreement substantively unconscionable.  The Court held that the arbitration agreement was enforceable and compelled Fox to arbitrate his claims.

Written By Malik K. Cutlar 

Maryland Highest Court Determines Proper Calculation of Lost Profits in Contract Case

Thursday, April 25, 2013 by Team PCT Law Group

Since the amount of damages sought on a lost profits claim can be substantial, any variations in the standard will likely have a drastic impact on the recovery.  The Maryland Court of Appeals (the highest court in the state) in CR-RSC Tower I, LLC v. RSC Tower I, LLC recently addressed the issue of whether the trial court properly excluded post-breach market conditions to mitigate consequential lost profits in a jury trial which resulted in an award of $36 Million in damages. 

The landlord defendants in CR-RSC Tower I, LLC deliberately breached a real estate agreement causing plaintiff developer’s financing to fall through.  The developer sued for breach of contract and sought recovery of lost profits basing its market projections at the time of the breach.  The landlords did not dispute the breach, but countered that the current market conditions were relevant and necessary to meet the requirement that lost profits be proven with “reasonable certainty.” The landlords sought to offer the testimony of an expert to show that the developer would not have suffered any damages given the subsequent downturn in the real estate market. 

The Court explained that the contract in this case did not address or allocate the possibility of future market downturns.  The only evidence established that, at the time the parties entered into the agreement, the parties contemplated a relatively stable market and did not foresee the cataclysmic crash of real estate.  Thus, evidence of post-breach booms or even busts was not relevant to the determination of the expected value of performance as of the time of breach.  As a result, the Court upheld the trial court’s exclusion of the defendants’ evidence of “post-breach market conditions.” 

Written By Angela H. France

Fourth Circuit Substantially Reduces Jurys Emotional Damages Award

Wednesday, April 24, 2013 by Team PCT Law Group

Please see, Angela France's article featured within Virginia Business Law Update.


Written By Angela H. France 

US Citizenship and Immigration Services Releases New & Revised Federal I-9 Form

Wednesday, April 24, 2013 by Team PCT Law Group

Please see, Angela France's article featured within Virginia Business Law Update.

http://www.virginiabusinesslawupdate.com/2013/04/articles/small-business-1/us-citizenship-and-immigration-services-releases-new-revised-federal-i9-form/

Written By Angela H. France 

Government Contractor Teaming Agreement Ruled Unenforceable

Monday, April 22, 2013 by Team PCT Law Group

Please see, Malik Cutlar's article featured within Virginia Business Law Update.

Written By Malik K. Cutlar

Use of Misappropriated Trade Secret Not Required For a Trade Secrets Act Violation

Tuesday, April 16, 2013 by Team PCT Law Group

If an employee misappropriates their current or former employer’s proprietary information, and discloses such information to its new employer and/or any other unauthorized person(s), that is enough to establish a violation under the Virginia Uniform Trade Secrets Act (“VUTSA”) so says the Virginia Supreme Court. There is no requirement under the Act that the employee or new employer actually use the misappropriated information to compete with the former employer.

In the case of Geographic Services, Inc. v. Collelo, et al. (2012), the Virginia Supreme Court held that once an employer establishes the existence of a trade secret, all that they are then required to show is that the trade secret was misappropriated as that term is defined under the Trade Secrets Act. The entity from which the trade secret was misappropriated does not have to show that defendants used the trade secret in order to establish a claim under the VUTSA and recover damages. Disclosure of the trade secret is sufficient where it can be shown that the new employer and/or person to whom the trade secret was disclosed knew, or had reason to know, that the trade secret was acquired by improper means. In such cases, where the plaintiff cannot readily prove measurable damages, then the VUTSA provides that the court can impose a reasonable royalty upon the wrongdoers for the unauthorized disclosure of the trade secret.

This decision by Virginia’s highest court provides a cautionary note for Virginia employers: if you know, or should have known, that an employee has obtained proprietary information from its prior employer without its knowledge, you could be on the hook for damages if the employee discloses the information to your company – even if your company never uses the information. The disclosure, in and of itself, will be enough to expose companies to monetary damages. Conversely, companies in which an employee has taken proprietary information can seek legal redress and possibly obtain damages even if the employee and its new company did not use the information.

Written By Malik K. Cutlar

Trademark Licensing Agreement Foreclosed Naked Licensing Defense

Tuesday, April 16, 2013 by Team PCT Law Group

Please see, Angela France's article featured within Virginia Business Law Update.

http://www.virginiabusinesslawupdate.com/2013/04/articles/intellectual-property/trademark-licensing-agreement-foreclosed-naked-licensing-defense/

Written By Angela H. France 


PCT Law Group Blog

Some Observations on the Market Reverberations of the Smart Phone Patent Wars

Wednesday, May 30, 2012 by Team PCT Law Group

Please see my guest post — “Some Observations on the Market Reverberations of the Smart Phone Patent Wars” – on IPWatchdog.com. 


 










Written by Raymond Millien

Subrogation: The Possibility of Being Sued a Decade After an Accident

Friday, May 25, 2012 by Team PCT Law Group

If you have not been sued by an insurance company, you likely are unaware of insurance companies’ right of subrogation. The right of subrogation, granted to insurance companies by the Florida Legislature, creates the possibility of exceedingly long term liability for those of us with uninsured or underinsured vehicles that our businesses rely on.

When a driver’s policy has uninsured motorist coverage, that driver’s insurance company will pay out claims not covered by the at-fault driver’s policy limits. However, this provides insurance companies with the right of subrogation against the at-fault driver. Following a few basic rules, insurance companies have the right to “stand in the shoes” of their policy holders, and sue the at-fault party on their behalf.

The Legislature affords insurance companies with some “upgraded shoes”, though. Whereas an individual must bring suit, or waive his right to sue, within four years of an accident involving personal injury, an insurance company’s time limit does not initiate until the final resolution of the uninsured motorist claim. (Metropolitan Casualty Insurance Company v. Tepper, 2 So.3d 209 (Fla. 2009) Consequently, it could take years to resolve a personal injury claim.

In short, having your or your business’ vehicles underinsured could lead to extremely long term liabilities, which can be a nightmare, considering such circumstances can be avoided by ensuring your businesses’ assets are adequately covered.

Written by Vladimir DuBovis

Customary International Law: Herding Cats in Zero Gravity

Thursday, May 24, 2012 by Team PCT Law Group

In 1963, France sent Félicette the cat to space. Later, she made it onto postage stamps.On the soccer field, it is not always entirely clear what behaviors a good sportsman should take, no matter how earnestly one pursues such laudable behavior. In some instances, rules guide players to sportsman-like behaviors. For example, it is considered unsportsman-like for the offense to cherry pick or to grossly outnumber the defense; therefore soccer’s offside rule was created. But this rule codifies only a narrow aspect of the custom of good sportsmanship in the beautiful game, leaving other aspects of sportsmanship defined by player custom.

In much the same way the offside rule was eventually created to explicitly direct soccer players toward fair behavior on the soccer field, international treaties like the Geneva Conventions are often created to delineate proper behavior from improper/war-like/criminal behavior throughout the world. Despite customs of humane treatment of others during war and traditions of good sportsmanship on the soccer field, neither the soccer community nor the international community have been able to put in writing and agree to a complete set of behaviors which proscribe the proper humane or sportsman-like action to take in every situation. In many areas, unwritten international custom defines the legality of an action. Lack of consensus or consistency of behavior can make it difficult to properly define customary international law.

When it comes to emerging industries like extraterrestrial resource mining, customary international law can seem like attempting to herd cats in zero gravity. Pinning down what is “fair” and “customary” in areas where no man has gone before can seem daunting but it also presents the unique opportunity to shape international custom by establishing them.

Where does international law come from?

There are many sources of law. Historic custom; international treaty; local ordinance; a nation’s constitution, the philosophical, political, and economic arguments made to pass a constitution or a law; even modern interpretations of centuries old legal language. The tapestry of modern law has been woven by an ever changing committee of weavers some of whom contributed yards of work while others merely pointed out the one thread in a corner missed a stitch. Despite this cacophony of legal voices and sources, the law can be divided into two categories: mandatory law and persuasive law. In simple terms, mandatory laws are laws binding. These laws must be followed in a specific situation. Persuasive laws, on the other hand, do not have to be followed but can influence binding law.

International law comes from two sources: international agreements and custom. International agreements bind not only the behavior of nations but also of people through the application of international treaties to a nation’s citizenry. In the United States, the Constitution declares treaties “the supreme Law of the Land,” applying provisions of the Outer Space Treaty to government actions and private citizens alike. Customary international law is often persuasive, but can be binding, depending on the situation and how well established the custom is.

What is customary international law?

In general, customary international law consists of laws which bind all the nations of the world, even where a nation has not actually signed a treaty or enacted a local law to that effect.

The United Nations and its member states, as well as the International Court of Justice, consider some international custom to be a binding source of international law. Many extremely important areas of law have historically been defined by the traditional actions taken and statements made by countries through history. For example, both the laws of war (e.g. the meaning of a declaration of war) and the law of the sea (e.g. salvage rights, acts of piracy) were long defined by customary international law. In the 20th century, many aspects of both the laws of war and the law of the sea were codified by international agreements like the Geneva andHague Conventions for war and UNCLOS for the sea. Some aspects of the laws of the sea and of war are still governed by custom. The launch of Sputnik in 1957 established the international custom “of free passage in space even when that passage transits over the territory” of another nation.

International custom is not necessarily defined by actions taken by countries. Provisions of international treaties may become part of customary international law and bind countries which have never become a party to that treaty. An international dispute between Germany, Denmark, and the Netherlands explored criteria which can indicate that a treaty’s provisions have become customary international law, binding on other nations regardless of their agreement to the treaty itself. These criteria include the length of time the treaty has been in force, whether non-party states objected to the provisions alleged to have become customary, and the number of countries that have signed the treaty. In other words, both a long established treaty and a treaty signed by a significant number of countries may contain provisions which can be considered customary international law which binds all the nations of the world.

The precise boundaries of customary international space law are difficult to pin down. Scholars like Francis Lyall and Paul Larsen believe that at least some provisions of the 1967 Outer Space Treaty, which has been signed or ratified by more than half of the world’s nations, has become customary international law. Others, like Michael Listner, argue that provisions of the less popular but long standing 1979 Moon Treaty may have become customary. Specifically, arguments have been made that provisions prohibiting private ownership of asteroid and moon resources may be customary international law, potentially complicating profitable extraterrestrial mining operations. On the other hand, law is rarely predictive and is often shaped by the very pioneers that open up new physical, mental, or technological frontiers. Just as the USSR’s launch of the first artificial satellite into orbit established the customary norm that overflights of a sovereign nation are legal if they’re made by orbiting satellites  in space, future space pioneers will likely have the opportunity to influence or establish international custom through the actions they take.

Written by Andrew Rush

Robonaut 2, the legless patent dynamo

Tuesday, May 15, 2012 by Team PCT Law Group

Even though it doesn’t have any legs (yet), Robonaut 2 is making great strides on the International Space Station. After months of resting comfortably in the newly installed Permanent Multipurpose Module, Robonaut 2, or R2 as it is more affectionately known, has taken a giant leap for robot kind. On May 2nd, R2 began serving the ISS crew in its mission to perform tasks which are too dangerous or mundane for ISS astronauts to perform. The semi-autonomous robot’s first task is to monitor air velocity from station vents. This is perhaps a lowly beginning for space robots, but a necessary step for the currently legless anthropomorphic creation.

R2 is the product of a successful development partnership between automotive giant GM and space exploration behemoth NASA. In addition to flying the first humanoid robot to space, more than 40 patents and patent applications have blossomed from the R2 development program. Like many other private company/government agency relationships, the partnership between GM and NASA was heavily influenced by federal laws that govern the agency involved. GM and NASA entered into a Space Act Agreement (SAA). The structure of the SAA was chosen in part to ensure that GM could protect and retain an interest in the intellectual property they developed while working with NASA on next-generation robots.

For those of you unfamiliar with the R2, the robot was developed at Johnson Space Center in the Dexterous Robotic Laboratory. A principal goal of the project is developing humanoid robots which can autonomously or semi-autonomously operate alongside astronauts. A humanoid form factor was chosen so that the robots can use the same tools as their flesh and blood counterparts. This means that NASA only has to ship one set of tools to the ISS, instead of a human set and a set designed for robotic use. Currently, R2 is operating on the ISS. R2 will initially perform simple tasks like monitoring life support system airflow, freeing human astronauts to carry out more challenging tasks. R2 is equipped with stereoscopic cameras and the ability to be remotely controlled by astronauts on the ISS or from a ground station. This teleoperation has a haptic feedback component, enabling the human operator to “feel” the forces encountered by the robot during operation. Because R2 has a body, including hands, designed to mimic the abilities of a human, teleoperators may one day be able to perform EVAs using R2’s successors, or to perform remote surgeries on sick astronauts. Currently, R2 is not space rated. R2’s electronics would be fried by the radiation and extreme temperature shifts outside the ISS.

Robonaut 2 was jointly developed by NASA and General Motors. The General and NASA began their relationship in 2007 when the two groups signed a space act agreement (SAA). Over the next four years, a pair of R2 robots were developed and constructed under a Space Act Agreement. R2b actually ended up on the ISS, while R2a has been outfitted with a four-wheeled base, enhancing its mobility. NASA is a “title taking”organization which means that under many circumstances, intellectual property rights to technologies developed by large companies under NASA contracts like SAAs must be transferred to NASA. The Bayh-Dole Act insulates small companies working with NASA from this title taking and, depending on the circumstance,

SAAs can be structured to avoid it too. The SAA between NASA and GM was structured in this manner. The NASA/GM SAA is a reimbursable SAA. That is, NASA and GM are working together on the project, but NASA isn’t paying anything out of pocket for development. GM actually pays NASA for the use of facilities. This unfunded SAA gives GM the right to hold the patents on all the technologies they develop for Robonaut 2. To date, some 40 patents or patent applications have been filed on technologies developed for the Robonaut program, including teleoperation technologies and human grasp assist devicesGM hopes to implement many of the technologies developed under this program in its factories so that human and robot workers can produce cars more efficiently.

In the future, R2 may be equipped with legs adapted for locomotion in zero gravityR2 may also receive upgrades enabling it to perform EVAs while attached to the end of the ISS’s robotic arm.

Happy creating!

Written by Andrew Rush