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Albo & Oblon, L.L.P - Arlington/Main Office.
2200 Clarendon Blvd.
Ste. 1201
Arlington, VA 22201
(703) 312-0410
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Albo & Oblon, L.L.P -- Fairfax County Office
6367 Rolling Mill Place
Ste. 102
Springfield, VA 22201
(703) 455-0046
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Albo & Oblon, L.L.P. -- Norfolk/Hampton Roads Office
World Trade Center
101 West Main Street
Ste. 435
Norfolk, VA 23510
(757) 200-7900
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Albo & Oblon, L.L.P. -- Roanoke/Salem Office
113 East Main Street
Salem, VA 24153
(540) 389-4498
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Albo & Oblon, L.L.P. -- Washington, D.C./Maryland Office
641 Indiana Avenue N.W.
Second Floor
Washington, DC 20004
(202) 386-7470
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Q. Our company had a contract with another company to deliver a product. We delivered the product, but they refuse to pay because they say the product did not meet the specifications of the contract. We strongly disagree and want to sue for the money owed to us, but the other company is located in California. How can we enforce our rights?
A. First, you should look to the contract to determine whether there is a provision that governs where either party can bring a claim in case of a dispute arising out of the contract. In the absence of such a provision, you should assess whether the California company had sufficient contacts with your state which would allow you to sue them locally to collect your money, and avoid the extra costs and hurdles of out of state litigation.
Q. My business partner and I each hold a 50% ownership interest in our company. We have been having a number of disagreements over the future direction of the company, and he is threatening to sue me if I do not give in to his demands. Is this something the courts will get involved with?
A. As any business owner can attest, disagreements between business partners are quite common in the business world. Unfortunately, many business partners do not take adequate steps at the formation of the relationship to plan for resolving these inevitable disputes. As a result, partners are often forced to turn to the courts to resolve their problems. One way to avoid the likelihood of litigation is for business partners to have an ownership agreement that all the owners sign setting forth how the company will be run and how disputes will be handled and resolved. For corporations, this is usually called a Shareholders Agreement, while for limited liability companies it is an Operating Agreement. But no matter the name, the purpose is the same and they are critical for every company to have in place. Without these in place, litigation can sometimes be the only other means of redress.
Q. My company orally contracted with a construction company to build out a gym in a leased space. The contractor failed to complete all the work, and some of it didn't even pass inspection. We had to delay opening for several months to fix everything. I've learned that he didn't have a contractor's license and that other people have had similar problems with his company. Can I sue them? If so, would we be able to recover all the money we've paid him, our rental expenses, the lost profits, and attorneys' fees?
A. The courts are filled with these construction type lawsuits. In most instances, these disputes are governed by the contract terms agreed to by the parties. In certain cases, you may be able to bring a claim of fraud, but the courts are generally inclined to view these in terms of contract. The big mistake in this case was not to have a written contract in place so there could be no dispute between the parties as to precisely what was agreed upon. As far as potential damages, it may be possible to recover rental expenses and lost profits if you can show they were directly caused by the other side's conduct and were reasonably foreseeable at the time the parties contracted for the job. As far as recovery of attorney's fees, this will depend on whether such recovery was agreed to specifically in the contract.
Q. I own an IT company and all employees have to sign an employment agreement containing a non-compete. One of our top selling employees recently resigned to start up a competing business. He's calling all of our clients and bad-mouthing the quality of our work. My company's profits are down this quarter and I think this is why. Can I sue him and recover the lost profits?
A. You can absolutely sue him, and this is precisely the scenario that should compel every business owner to put in place non-competition and/or other restrictive covenants to protect your hard-earned business. Your claims would be a combination of breach of contract for the non-compete, as well as various torts such as interference with existing business contract relationships, defamation, and potentially common-law or statutory conspiracy to injure business. Lost profits are routinely awarded by courts if these violations are proven, though they will often require the use of an expert witness if the case goes to trial.
Q. An employee at my company is threatening to sue for sexual harassment. She claims that a male colleague made increasingly vulgar sexual comments to her over the course of a year, but she never told anyone. The company's policy is to report this type of conduct to management so that we can investigate. This is now causing a lot of negative discourse among employees that we feel could have been avoided if she had followed procedure. Does she have a valid claim against the company? Can we fire her for failing to follow procedures?
A. This case highlights how critical it is that companies have effective procedures in place for handling and investigating employee claims of discrimination/harassment. The company here would have a good defense to the employee's claim since she failed to follow the established reporting requirement for her complaint. However, the company should definitely not fire the complaining employee or take any other adverse action against her, since to do so would likely give rise to a viable claim for retaliation.
Q. I recently resigned from my job at an information technology company. I had only worked there six months. I've been in the IT field for over 30 years, and realized that I could do this work on my own. So, I started my own company. Apparently, my former employer found out that I was calling its clients for work because I got a threatening letter in the mail. The letter said that I was violating a non-compete agreement and if I didn't cease and desist, they would sue me. What should I do?
A. The first thing is to check the terms of the non-compete agreement, and consult with experienced business and employment counsel to see what the agreement allows you to do to and not to do. If the company did sue you, the likely first step would be for them to seek an injunction against you, which would be a court order prohibiting you from further violating the terms of your non-compete. The problem here is that the employee has already invested so much in his new company and there is a chance the court could shut it down as violating the non-compete. Employees who are thinking about leaving and starting their own companies would be well-advised to consult with experienced counsel well before they actually invest a lot of resources in the endeavor to weigh the risks of any applicable restrictive agreements.
Contact us today for an initial consultation at (703) 312-0410. We are located at 2200 Clarendon Boulevard, Suite 1201, Arlington, Virginia 22201. We also have branch offices in Fairfax County and Richmond.
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Copyright 2008 Albo & Oblon, LLP All Rights Reserved
Disclaimer: Albo & Oblon, LLP provides the information in this web site for informational purposes only. The information does not constitute legal advice. The use of this site does not create an attorney-client relationship. Further communication with our attorneys through the web site and e-mail may not be considered as confidential or privileged. Please contact our attorneys if you wish to discuss in more detail the contents of this web site. David A. Oblon, Albo & Oblon, L.L.P., 2200 Clarendon
Boulevard, Suite 1201, Arlington, Virginia 22201 is responsible for
this web site. Web site designed and maintained by PowerAdvocates
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