Confidential
Settlement – $855,000Judge
Mediator
Court
San Francisco Superior
Attorneys
Plaintiff
David S. Secrest
(Law Offices of David S. Secrest P.C.)
Defendant
Experts
Plaintiff
Brian H. Kleiner
(technical)
Joanna Moss
(technical)
William Hershey Jr.
(technical)
Defendant
Troy Larson
(technical)
Carla H. Kelley M.R.C., C.R.C.
(technical)
Arthur Clark
(technical)
Facts
The plaintiff commenced employment for defendant company as vice president in charge of education on Jan. 1, 1996, and reported directly to its CEO and president. The terms of the plaintiff's employment were governed by a jointly-drafted hire letter. Per defendants, the plaintiff was advised during pre-employment negotiations that the position required extensive interaction and coordination with other members of the mangement team. Per plaintiff, she sought from the defendants, and received, specific reassurances regarding the financial solvency of the group and guarantees of autonomy in operating in her assigned areas of accountability. The plaintiff accepted the position, and worked for 18 months, receiving one positive written review from defendant CEO after five months of employment and, per defendant, various memos thereafter raising performance issues. The plaintiff alleged the market and financial condition of defendant company was not as represented by the defendants, and that she faced persistent and increasing difficulty in the form of job interference by defendant CEO. The defendant alleged that a downward revenue spiral in plaintiff's department led to increased supervision and concern. The plaintiff alleged she was terminated over the telephone on April 18, 1997, by defendant CEO without warning, while on a pre-scheduled business trip on behalf of her employer for alleged "improper contacts with board members and staff in the field." Per defendants, the plaintiff was contacted on April 18, 1997, to discuss her alleged animosity toward other members of the executive team, concurrent job hunting, and her commitment to defendant company. The plaintiff alleged defendant CEO wrote a letter to her on April 22, 1997, which set forth a number of alleged reasons for the plaintiff's placement on "involuntary probation," such as abrupt departures from work with no planned return date. According to the defendant, the plaintiff was asked on April 22 to consider various employment options, including severance and/or probation. Thereafter, on May 1, 1997, both parties retained counsel. Various demands were exchanged and, according to defendant, there was a mutual decision on or about May 1, 1997, to place the plaintiff on paid administrative leave pending futher negotiations. The plaintiff alleged that during the week of April 21, 1997, defendant CEO and another executive made a variety of false statements about her in response to queries by the plaintiff's staff and/or Board members. The defendants alleged that no comments were made regarding the plaintiff's employment status and/or position with the company. The plaintiff also alleged that at this time, her electronic calendar (which detailed her appointment schedule), was deleted from the network hard drive at the defendant company. The defendant alleged that no such deletion occurred and that an inspection of the hard drive by a competent computer engineer would have shown this. The plaintiff brought this action against the defendants based on 11 causes of action including breach of express contract, breach of the covenant of good faith and fair dealing, fraud and deceit, wrongful discharge in violation of public policy and defamation.
Settlement Discussions
Staff counsel for defendants' insurer was initially retained in July 1997 following a filing of the complaint. In the course of that representation, a non-binding mediation lasting several days was undertaken, under the auspices of Wise Mediations. In the course of that mediation, plaintiff was permitted to take 11 "mini-depositions" of current and former employees and officers of defendant purportedly to persuade defense counsel of the validity of the claims for defamation and spoliation of evidence. Following these depositions, the plaintiff demanded $750,000. Mediation efforts were terminated. The law firm of Murphy, Pearson, Bradley (by Mark S. Perelman, Esq.) associated in as counsel for defendants. A motion to continued the trial was denied, and a trial date of July 13, 1998, was set. Per plaintiff, in the spring of 1998, plaintiff then conducted the deposition of six current officers and employees of defendant group including one board member. The plaintiff alleged that, immediately prior to trial, it was discovered that the back-up tapes were missing for the limited time frame during which the plaintiff's electronic calendar had been deleted. The defendants alleged that the calendar remained accessible in hard copy, and that the alleged intentional deletion could not have been effected on the plaintiff's terminal absent her permission. Per plaintiff, she obtained a court order requiring the attendance of four non-resident board members of defendant company, as well as the production by defendants' counsel of the network hard drive and the back-up tapes for examination by technical consultants retained by plaintiff. Per defendants, all such discovery efforts were unopposed; and the court refused the plaintiff's motion for production of confidential employee information absent proper notice pursuant to C.C.P. º1985.7. Prior to trial in July 1998, the plaintiff served a C.C.P. º998 offer for $930,000. The case settled at the mandatory settlement conference.
Damages
The plaintiff claimed $1,000 in medical bills for therapy and $210,000 in lost earnings. Per defendants, plaintiff sought in excess of $3 million for lost earnings, lost earning capacity, emotional distress and loss of reputation.
Other Information
The settlement was reached approximately one year after the case was filed. The plaintiff refused to agree to a confidentiality provision as part of the settlement. Per defendant, the plaintiff insisted on a letter of recommendation which could not be provided per the policies guidelines set forth in Randi W. v. Muroc. As part of the settlement, the defendants were required, to be bound by, and limited to, a written explanation of the plaintiff's departure from her employment, which was drafted by counsel. The defendants reported that the written explanation requested by the plaintiff expressly provides that no recommendation is implied or should be inferred.
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