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FALL 2011
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 BUSINESS LAW & BUSINESS LITIGATION |
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 Federal Court Rejects Employer's Attempt to Extend Length of Non-competition Agreement
A federal appeals court recently denied a Massachusetts employer's request to extend the length of a non-competition agreement while its lawsuit against a former employee was pending.
The United States Court of Appeals for the First Circuit ruled that Massachusetts law does not permit lengthening a non-competition agreement beyond the period agreed to by the employer and former employee.
The employer, EMC Corporation, argued that a string of recent decisions from the state's trial court suggested that lengthening the time of the non-competition agreement is permitted in certain circumstances.
But the Boston-based 1st Circuit rejected EMC's argument, saying that the Massachusetts Supreme Judicial Court, the state's highest court, had previously prohibited extending a contractual deadline for an employer to obtain an injunction against a former employee. This longstanding rule of law is based on the typically unequal bargaining power between employers and employees, according to the 1st Circuit. Massachusetts policy, the court added, is to limit the scope of agreements restricting worker movement to other employers.
An employer is not without any recourse, however, since it can seek monetary damages for a breach of contract even after the expiration of the agreement, the court noted.
This decision highlights that a company needs to move promptly when it wants to quickly stop a former employee's breach of a non-competition agreement. The clock starts ticking as soon as the employee's employment ends. EMC filed a motion for preliminary injunction about one month prior to the end of a one-year non-competition agreement, and a court hearing was held three days prior to the expiration.
Equally important, the ruling also highlights that employers can protect themselves by inserting a provision in a non-competition agreement that would either suspend or extend the expiration of the agreement while a lawsuit is pending. A non-competition agreement could also include language triggering an extension when an employee conceals actions that violate the agreement.
Even absent a contractual provision extending the deadline, an employer can argue that Massachusetts law permits an extension based on employee misconduct, such as soliciting former customers or stealing proprietary information.
For more information on the use of noncompetition agreements in your business, or if you have questions related to the enforceability of a noncompetition agreement, contact a member of Parker | Scheer's Business Litigation Practice Group. |
COMPLEX PERSONAL INJURY |
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Study: Majority of Med-Mal Claimants Receive Nothing
Only one in five medical malpractice claims lead to a settlement or other reimbursement, according to a recent study published in the New England Journal of Medicine.
The low success rate reflects the difficulty in persuading juries to find doctors at fault for injuries to patients, and to obtain fair settlements from insurance carriers. Pursuing a medical malpractice claim is expensive and time consuming. In view of the expenses and other difficulties involved in winning a medical malpractice claim, it's highly unlikely that injured patients pursue claims lacking any merit.
The study's authors examined closed insurance claim files for nearly 41,000 physicians in 25 specialties insured by a national carrier from 1991 to 2003. The mean indemnity payment across all specialties was $274,887, and the median payment was $111,749, according to the study. The mean payments ranged from $117,832 for claims against dermatologists to $520,923 for claims against pediatricians.
Neurosurgeons faced the highest percentage of claims (19.1 percent), followed by thoracic-cardiovascular specialists (18.9 percent) and general surgeons (15.3 percent). At the other end of the spectrum, psychiatrists faced the lowest percentage of claims (2.6 percent). Pediatricians (3.1 percent) and family medicine practitioners (5.2 percent) were the next two lowest.
However, the specialties more likely to face claims did not always experience more prevalent insurance payouts, according to the study. For instance, the average payment for neurosurgeons ($344,811) was less than the average payments for pathologists ($385,509) and pediatricians ($520,924).
Physicians continue to worry about facing a lawsuit, according to the study, despite the low rate of medical malpractice claims leading to an insurance settlement or court judgment. The study's authors speculate that physicians are concerned about the time, stress, added work, and potential reputational damages associated with lawsuits.
The study was funded by the RAND Institute for Civil Justice and the National Institute on Aging.
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Tragic Burn Accidents Lead to Recall of Pourable Gel Fuel
In the wake of flash fires inflicting second and third degree burns on numerous victims, the Consumer Product Safety Commission is coordinating a voluntary recall of pourable gel fuel used for outdoor lighting products.
Nine manufacturers and distributors are recalling all pourable gel fuel they make or sell, including gel fuel containing citronella oil. Because of the hazards related to pouring gel fuel on already lit fuel pots and other outdoor lighting items, the CPSC is warning all consumers to immediately stop using pourable gel fuels.
The CPSC reports at least 65 recent incidents of flash fires that have caused two deaths and the hospitalization of at least 34 individuals for second and third degree burns to the face, chest, hands, arms and legs. Gel fuel can ignite and splatter when poured into a burning fuel pot, torches and candles. Numerous flash fire injuries, including the two fatalities, involved fuel gel products made by Napa Home & Garden, according to the CPSC.
Parker | Scheer previously handled a case involving a ball of wax that exploded when a citronella candle was relit, causing second degree burns on the left calf of a woman attending a baby shower. When the firm learned that the candle type was subject to a manufacturer's recall, the case settled for $80,000. The woman incurred $1,789 in special damages, including medical expenses.
The recall impacts approximately two million units of pourable scented and non-scented gel fuels that sold for $5 to $20 since 2008 in one-quart and one-gallon containers. Consumers can contact the manufacturers to obtain refunds for unused gel fuel. Some of the companies are reportedly working on a bottle cap design that could prevent flash fire hazards. Warning labels will also likely be revised.
The companies participating in the recall are:
- Bird Brain, Inc. (Ypsilanti, Mich.)
- Bond Manufacturing (Antioch, Calif.)
- Sunjel Company (Milwaukee)
- Fuel Barons, Inc. (Lake Tahoe, Nev.)
- Lamplight Farms, Inc. (Menomonee Falls, Wis.)
- Luminosities, Inc. (Windflame). (St. Paul, Minn.)
- Pacific Décor Ltd. (Woodinwille, Wash.)
- Real Flame (Racine, Wis.)
- Smart Solar, Inc. (Oldsmar, Fla.)
If you or someone you know has been burned by pourable gel fuel, contact a member of Parker | Scheer's Complex Personal Injury Group to discuss your rights with one of our experienced product liability lawyers. There is never a charge to discuss a potential case and all shared information is held in strict confidence.
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WORKERS' COMPENSATION
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SJC Reinforces Rule that Employers, Not Employees, Must Pay for Workers' Compensation Insurance
By rejecting an employer's unconscionable attempt to force its employees to pay for workers' compensation insurance coverage, the Massachusetts Supreme Judicial Court in a recent decision reinforced the longstanding principle that employers are solely responsible for providing this coverage to all employees.
The fundamental idea of the Workers' Compensation Act is that it replaces personal injury lawsuits against employers with a uniform remedy and process for all injured workers. Mandating that employers obtain workers' compensation insurance in exchange for immunity from negligence lawsuits is simply a cost of doing business, the court explained.
Because workers' compensation insurance is not a fringe benefit, employers are prohibited from passing this cost on to employees. An employer violates the law if it attempts to make its employees pay for workers' compensation coverage.
Under Massachusetts law, an employee is defined as someone in the service of another under any contract of hire. Any Massachusetts employee who suffers a personal injury that arises out of and in the course of his or her employment is entitled to workers' compensation benefits. The guiding rule is that if the conditions, occurrences, incidents or nature of employment causes an injury, then the injured employee is entitled to workers' compensation benefits.
The term "personal injury" covers many situations and includes:
- infectious or contagious diseases if the nature of the employment is such that the hazard of contracting such diseases by an employee is inherent in the employment;
- mental or emotional disabilities if the predominant contributing cause of such disability is an event or series of events occurring within any employment; and
- work-related activities that aggravate a preexisting condition.
If an employer fails to provide workers' compensation coverage, an injured worker can file a claim at the Massachusetts Department of Industrial Accidents to obtain workers' compensation benefits from the Department's Trust Fund. This fund was set up to compensate employees whose employer fails to obtain workers' compensation insurance.
An injured worker can also sue the uninsured employer for pain and suffering damages, full wage loss (rather than the 60 percent of lost wages allowed under the Workers' Compensation Act), and reasonable and necessary medical expenses related to the work-related injury.
It has been the legal responsibility of all Massachusetts employers for 100 years to provide workers' compensation coverage for its employees. Those who do not obtain insurance have a competitive advantage over law-abiding employers that recognize their legal obligation to provide workers' compensation insurance for its workers.
This mutually beneficial law has served Massachusetts well, and will continue to do so as long as we remain vigilant in our efforts to prevent employers seeking to take advantage of workers who either do not know their rights, or who are vulnerable to those who ignore them.
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PARKER | SCHEER NEWS
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 Eric Parker on Radio Show Mind Your Own Business
Eric Parker, managing partner of Parker | Scheer LLP, recently sat down with the radio show hosts of Mind Your Own Business (MYOB) on WBNW 1120AM, Rick Brutti and Jeffrey Davis, to discuss the legal industry today and how a boutique law firm like Parker | Scheer LLP continues to be successful.
Click here to listen to the audio.
Parker | Scheer LLP Featured in Boston Business Journal
Eric Parker was recently interviewed by Boston Business Journal's Lisa van der Pool. The article was published in the BBJ's "Outside the Box" section, a tribute to Parker's original mindset. As the interview illustrates, Parker is a compassionate and ground breaking personal injury attorney, whose own happiness is founded on the happiness of others. Click here to read more.
Attorneys Eric Parker and Susan Bourque, successfully settled a case involving an aggressive animal attack upon a young woman for $550,000. The plaintiff, a 23 year old female, suffered significant facial trauma resulting in extensive reconstructive surgeries, scarring, and emotional distress following a dog bite. Click here to read more.
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